Chapter 625 The harsh reality
A company has three core departments: production, sales and finance.
Leaving aside the production, compared with the latter two, Song Yuanchao is still satisfied with the production of Si Te Company, but in terms of sales and finance, it is somewhat unsatisfactory.
It’s not that they did a bad job. Judging from the actual results, it was still good, but Song Yuanchao believed that there were many shortcomings.
Of course, this cannot be blamed on the heads of these two departments, because the current market situation and many policy reasons make it quite difficult to carry out some work, such as the sales company. Sun Yaoliang has seen this, but in actual work it is difficult to meet Song Yuanchao's requirements, especially in the face of rapid expansion of sales and markets, it is understandable that other aspects have been neglected.
As for the financial aspect, there is no need to mention it. The Finance Department of Si Te Company has been formed on the original basis since its initial establishment. No matter whether it is the financial manager or the general accountant and cashier positions below , the Finance Department is basically transformed from the original state-owned enterprise finance.
If we only consider the level and ability of accounting, these people are competent. However, from the financial perspective of the headquarters of a large company, they do not have the concept of "big finance" in their work. They are just responsible for their own part and just do the accounts well and avoid mistakes.
Such a finance department does not meet Song Yuanchao's requirements. What Song Yuanchao needs is not a finance department that can just do accounting. What he wants is a finance department that can reflect the value of corporate management from a financial perspective, assist corporate management from a financial perspective, conduct data analysis and raise issues in a timely manner.
To be honest, Song Yuanchao was a little annoyed when he saw the data in the report, but after listening to Sun Yaoliang's explanation and the other party sincerely admitting his mistake, Song Yuanchao's anger gradually subsided.
Sun Yaoliang was wrong, but the fault did not lie with him to a large extent. Rather, it was because the dealer grading system was not perfect when it was first formulated and ignored the reality that current plans and markets were running in parallel.
In addition, the problems of the Finance Department cannot be ignored. Although Sit Company is a joint venture, it is a joint venture with some differences. To put it bluntly, it has some inherent deficiencies.
Ying Annie is the major shareholder of Si Te Company and the nominal boss , but when she first promoted the joint venture, Ying Annie did not have a complete team. Except for Ruth, the company registered by Ying Annie was actually an empty shell.
After the joint venture, the composition of the new team was somewhat unsatisfactory, especially in the area of finance, which still used personnel from the previous branch. There were no problems in the initial operation of such a finance department, but with the continuous development of the company, the lack of capabilities and limitations of traditional thinking were exposed.
The Finance Department is now managed by Ying Annie. From this point of view, Ying Annie is the boss of the Finance Department and the actual financial director.
But Ying Annie is not from a finance background. She studied management and does not have extensive financial knowledge. From this point of view, the current situation is inevitable.
Song Yuanchao fell into deep thought. This is the second year for Sit Company. Last year's main task was layout and market promotion. This year, the general layout has been completed. With the official production of the branch in Yangcheng in two months, the business will cover North China, East China, South China, and Central Plains including the southwest and northwest regions. The next focus will be on the comprehensive development of the domestic market based on the layout.
This is a very important strategy. Song Yuanchao plans to complete this plan in two to three years. Once the plan is completed, Sitco will take the absolute initiative in the domestic market and have a complete market system first. In the future, when international beverage (food) giants enter China, Sitco may not be without a chance to compete with them, as it is the first mover.
From the early days of reform and opening up in the 1980s to the early 1990s, the market and enterprises were in a state of wild development for more than ten years. Many companies and brands that later became famous laid the foundations during this period. If you missed this golden time, then the future can be imagined.
Time waits for no one, Song Yuanchao felt the urgency, and Si Te Company also developed rapidly under such circumstances. However, in such a development process, various problems will inevitably arise, and Song Yuanchao has to admit this fact.
"Yaoliang, which one do you think is better, the dealer system or the direct sales system we used before?" Song Yuanchao took a puff of cigarette and asked Sun Yaoliang beside him.
Sun Yaoliang was a little surprised. He didn't expect Song Yuanchao to suddenly ask him this question.
Sun Yaoliang frowned and thought for a moment before saying, "I can't really explain this..."
"Why can't you say it? You are the general manager of the sales company. You have the final say on the sales system. Why are you hiding it from me?"
"Haha, how is that possible? Maybe for others, but of course I will say whatever I want to your third brother." Sun Yaoliang smiled and shook his head, then straightened his expression and said, "I think these two systems have their own advantages and disadvantages."
Song Yuanchao raised his hand and gestured for him to continue speaking.
Sun Yaoliang said: "Let's first talk about the direct sales model that we have used before. The benefits of this model are obvious. Direct sales means skipping the traditional middlemen (distributors) and directly controlling the sales terminals. The benefits of this model are also here. Skipping the traditional middlemen (distributors) will first increase the product gross profit margin. Secondly, we can directly face the market and get feedback on market information in the first place. In addition, because we directly control the sales terminals, we can also achieve the most detailed coverage of the market."
"But the disadvantages are real. When the market is still small, this model is not difficult to operate. But once the market expands, especially now facing the entire national market, it is not so easy to achieve this step. To put it bluntly, one is the people, and the other is the difficulty of actual management. The direct sales model requires salesmen to go deep into the market and directly control the terminals. Take Jinling as an example. At the beginning, the direct sales model required more than a dozen salesmen. If it were all provinces and cities across the country, the number of people would be quite astonishing."
"Where do these people come from? How to manage them? Will there be inevitable problems in management? What if management gets out of control? In addition, there are personnel cost expenditures, team structure, monthly business assessments, actual operations, etc. You have to know that this is not just a few people, a dozen people, or even dozens or hundreds of people. If we operate according to the previous direct supply model, I simply can't imagine the number of people that need to be managed."
Song Yuanchao nodded silently. This was indeed a problem. It was also the main reason why after the establishment of Si Te Company, Si Te Company did not continue the direct supply sales model in the national market except in Jinling.
Although the direct sales model is good, it requires too many people, and the difficulty of management increases exponentially with more people. It is not as simple as one plus one.
"The advantage of the dealer system is that it can quickly cover the market through the other party's inherent channels. The dealer terminal sales channels in various regions are ready-made, which can save us a lot of time in entering the market and putting products on the shelves. In terms of cost, although the cost of direct sales is lower and the gross profit margin is higher, considering the single batch shipment and distribution, the actual cost calculation is not much different."
"In addition, in terms of management, we only need to manage dealers according to regional divisions, which greatly reduces the intensity of sales management and frees up manpower from tedious specific work."
"Of course, the drawbacks of the dealer model are real. I have just explained this problem. It is also an objective reality. And from the current perspective, it is probably very difficult to completely solve this problem. Third brother, to be honest, I have considered this issue, but from the current perspective, I don't think there is a good solution for the time being, unless..."
At this point, Sun Yaoliang glanced at Song Yuanchao, thought for a moment and said, "Unless the current dealer structure system is completely changed, marketization completely replaces the existing planned system, and the role of state-owned enterprises and collective enterprises is reduced... But I don't think this can be done in the short term."
Sun Yaoliang didn't finish his sentence, but Song Yuanchao understood what he meant.
Today's distributors are basically state-owned enterprises or large collective enterprises, such as local supply and marketing cooperatives, department stores, food companies, etc. They control more than 90% of the market channels. If Si Te's products are rolled out across the country, they cannot be bypassed.
Unless Sit promotes the direct supply sales model nationwide, using this method to overtake others and directly control the market terminal, this approach is theoretically feasible, but in reality it is impossible, and once it is done, it will lead to conflicts of interest.
The national market is not a single market in Jinling. The key to Song Yuanchao's sales model in Jinling was that he had Nandu as his backer. Nandu was the local tyrant in Jinling. Although doing these things would cause opinions from channels such as supply and marketing cooperatives, department stores, food companies and even fruit companies, as enterprises with a history and a certain level in the same city, they could do nothing to Nandu.
But once you do this in the national market, conflicts of interest will arise. Will the dealers in other places not react? You have to know that local protectionism will still exist, not to mention now, even in ten or twenty years or even longer. If you do this, it is equivalent to stealing people's jobs. Which place will watch you do this?
After pondering for a long time, Song Yuanchao sighed in his heart.
To use a phrase from Jack Ma in later generations to describe it, ideals are full of hope, but reality is very skinny.
Song Yuanchao has clearly seen some problems, but given many current practical situations, there is no way to change them. Perhaps this is a kind of helplessness.
