Delphi is the largest and most diversified supplier of automotive systems, modules and parts in the world with an annual turnover of $29 billion. The company was formed in the late 1990s when General Motors spun-out its automotive parts business. Within Delphi, the Packard division is the largest automotive supplier of automotive wiring systems, switchgear and connectors with a turnover of $6 billion.
In April 2004, my consultancy company Mindsheet Ltd won a contract from Delphi Packard to help reorganise their sales and marketing team. Also, they wanted to make a stronger bridge between their marketing and engineering activities to achieve better influence with their key car company customers. In particular, they did not want their own product planning to be left behind as vehicle manufacturers moved more towards hybrid and electric vehicles. These trends have a huge impact on the vehicle connectors and power electronics.
The first week I interviewed all the key players across the division from which I diagnosed the main issues. Namely, that sales were organised by product line and territory and not by global account – therefore the car companies were running rings around them. The other issue was that sales and marketing didn’t do any marketing this was all done by engineering, who then kept their marketing strategy to themselves. The remedy was to transform the sales organisation into an account structure, work with each account team to create an account strategy and have representation from engineering within each team.
There were 10 key accounts, one for each car company and the account leader needed to come from the same territory as their home customer account. Furthermore, they wanted all the strategies to be presented within two months at a divisional growth workshop all with the same format and scorecard. I had to devise the format, train the account teams, be in each territory all at once and bring engineering to the party.
The contract lasted for two very intense months split between the US, China, France and Germany. The sales bookings quickly got back on track and were up to $1.2 billion for the year. However, the margin still needs improving and that is being addressed by the engineering strategy which is now in step with marketing.
The figure overleaf shows one of the tools that I developed for conducting this contract. It is a spreadsheet that helps develop a structured gap analysis between the Delphi offer and their competitors. Each account team completed this for their accounts and are now focused on the key areas for improvement.