Less is More -- Applying the Flow Concepts to Sales (Chapter 21 of Theory of Constraints Handbook)

This is an individual chapter of Theory of Constraints Handbook. This chapter presents a case study of the implementation of Eli Goldratt’s flow concepts to the management of the sales funnel in an organization. The concepts briefly stated are: regard flow as a prime measurement, choke the release of incoming sales opportunities; abolish local efficiencies; and identify and eliminate disruptions to the flow of sales opportunities. While Goldratt discussed these flow concepts with respect to increasing reliability and speed significantly in a production environment, this case describes the application of these flow concepts to the management of the sales process. After the implementation, the sales hit rate increased from 11 to 40%; sales cycle duration shortened from an average of 32 to 17 days; and average throughput per order grew from 52 to 68 percent.