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Packaging division Organization (Gary Reed (Clay Hamilton Divisional VP…
Packaging division Organization
Gary Reed
President
COO
Engineer by training
Joined 1956
Graduated from Bradley in 1956
Way Up
Part of Sales Org
Moved to General Managemet
Proved his abilities
By turning around smaller units
Understand Signodes culture
Services are offered to customers without knowing costs or effect on market
1982 Recession
Gary realized recovery will not be the same as before
Steel Strapping was a matured product
Increasing commoditization
Can Signode differentiate its strappings
Took over in 1982
Appointed Henry Hernandez as marketing head
Major responsibilites
Develop Sophisticated methods of measuring and segmenting market
On Reed's behest
Established product managers
To oversee marketing process for Steel and plastic products
It was believed the product managers
Would eliminate traditional "Black Magic" sales force used for marketing analysis
Was determined to improve marketing efforts
Had work with henry before and had confidence in his abilities
Clay Hamilton Divisional VP Sales
Joined in 1959
Worked his way up
180 Sales reporting
3 regional Managers
24 district managers
1982
235 reporting to him
During recession, Gary and Hamilton cut the sales to 180
Sales Approach
Developed Markets traditionally by specializing sales reps in an industry
Signodes Experts
Study Industry strapping needs
Design specialized equipment
Followup with services and sales of strapping consumables
System Sales approach
Resulted
Multiple contacts in customer organization
Contacts with VP Manufacturing
Contacts with VP Operations
Contacts with Plant Managers
Purchasing agents
1970s
Experiments with Distributors approach
Lower end of market
Results were not satisfactory
Sales Compensation
Base Salary
Volume Bonus
Mkting and Sales
Set Sales quota beginin of the year
Sales person earned
2% bonus on sales over quota
Average earning 1983
$35000
70% Salary
30% Bonus
Specialists to assist System Selling and Account service
Power equipment specialists
Helped sales with equipment sales
Industry Specialists
Assisted sales in industry segments
Developed Sales training programs
Explain equipment applications
Increase selling skills
Promote better technical knowledge of Signode's equipment
Helped with equipment preparation
Industry Surveys
ROI Justifications
Director of National Accounts Reported to Clay
5 NAMs reported
Managed 250 largest accounts
Managed In cooperation with field sales
Had contacts with Senior Executives of customers
Made presentations on how Signode reduced costs for customers
Negotiated national and multi-location purchase contracts
Local relationships were managed by district sales reps
Manufacturing and Material Management
Organized Functionally
Stephen O'Donnel VP Manufacturing
Managed Producion of
Custom and Standard Strappings
Strapping equipment
With Signode since 1958
Workd his way into gnrl mgmt thr manufacturing function
Believed Steel strapping would continue to be profitable cash generating business into 1980s
He quoted "A cash cow can be fed and curried and nurtured for as long as world will let you"
To Continue Business profitability
He sought to make Signode a low cost producer
Signode was already a low cost processor of cold-rolled steel into steel
strappings
Higher raw material costs prevented it from being a low cost provider of steel strappings
Problem with Steel Strapping Machines
Custom Equipment
Absorbed large amount of management time
Scarce engineering and design esurces
Signode never made profit
O'Donne argued for ceasing production
Argued for standard line or prower strapping equipment
Material Management
Jane Mack , Head of material Management
Joined Signode in 1980
Tool an aggressive stand on material manufacturers since she took over
To reduce material cost
Did not change policy buying steel from home companies
Steel companies were big customers and big suppliers
1983
Big 8 Steel Companies
Steel companies purchased 13% of steel strapping from signode
Signode making less profit
Would break even if Signode purchased raw material from external suppliers
Consolidated Inventory and Reduced costs by closing warehouses
Sales did not like his as it is seen as reduction in service
Sales felt it is damaging as price differential on Signode strappings is high compared to comtetition