The problem of poor sales activities at ul vs việt nam laboratory

UNIVERSITY OF ECONOMICS HO CHI MINH CITY
International School of Business
------------------------------

NGUYỄN TRUNG DŨNG

THE PROBLEM OF POOR SALES
ACTIVITIES AT UL VS VIỆT NAM
LABORATORY

MASTER OF BUSINESS ADMINISTRATION

Ho Chi Minh City – Year 2021


UNIVERSITY OF ECONOMICS HO CHI MINH CITY
International School of Business
------------------------------

NGUYỄN TRUNG DŨNG

THE PROBLEM OF POOR SALES
ACTIVITIES AT UL VS VIỆT NAM
LABORATORY

MASTER OF BUSINESS ADMINISTRATION

SUPERVISOR: Dr. Đoàn Anh Tuấn

Ho Chi Minh City – Year 2021

Table of Contents
Abbreviation

4

List of Figures

5

List of Tables

6

Acknowledgment

7

Executive Summary

8

1.

9

2.

3.

COMPANY OVERVIEW
1.1

UL Global

1.2

UL VS Viet Nam Co., Ltd

12

1.2.1

Overview

12

1.2.2

Organization Chart

14

1.2.3

Company Context

15

SYMPTOMS

16

2.1

Symptom 1: Low Revenue Growth Rate

16

2.2

Symptom 2: Not Profitable

18

PROBLEM IDENTIFICATION

20

3.1

Potential Problem

3.1.1

Poor Sales Activities

3.1.2

Wrong Cost Allocation

3.2

4.

9

Problem Validation

20
20
4
10

3.2.1

Poor Sales Activities

10

3.2.2

Wrong Cost Allocation

15

3.2.3

Important of Main Problem

16

CAUSE VALIDATION
4.1

Potential Causes

17
17

4.1.1

Insufficient Salesman Resource

18

4.1.2

Lack of Sales Motivation

20

4.1.3

Ineffectiveness Forecasting

20

4.1.4

Poor Training Effectiveness

22
Page 2 of 72


4.2
5.

ALTERNATIVE SOLUTIONS
5.1

6.

7.

23
25

Alternative Solution 1: Internal Resources Relocation to and Fulfillment booking/ billing from

Vietnam.

26

5.2

30

Alternative Solution 2: Backfill for Sales and Customer Service Manager

ACTION PLAN

32

6.1

Solution Selection

32

6.2

Action Plans

33

SUPPORTING INFORMATION

40

7.1

Interviewees Participants

40

7.2

Methodology

40

7.2.1

Research

40

7.2.2

Interview Design

40

Transcript summary

41

7.3
8.

Validating Cause

REFERENCES

50

Page 3 of 72

Abbreviation
UL: Underwriter Laboratories
EVP: Executive Vice President
HVACR: Heating, Ventilation and Air Conditioning
OCT: Over – the – Counter
VS: Verification Services
CPLP: Consumers Products Lean Process
P&L: Profit and Lost
KPI: Key Performance Indicator
KAM: Key Account Manager
LMS: Learning Management System
EHS: Environmental, Health and Safety
POI: Point of Influence
POS: Point of Sales
SG&A: Sales, General and Admins
FY: Full Year
YTD: Year to Date
CoR: Cost of Revenue
TIC: Testing, Inspection and Certification
RFQ: Request for Quotation
RFP: Request for Proposal
ERP: Enterprise resource planning systems
CapEx: Capital Expense
B2B: Business to Business
SBRM: scenario-based Road-mapping method
MSD: Microsoft Dynamics
SOPs: Standard Operating Procedures
TA: Talent Acquisition

Page 4 of 72


List of Figures
Figure 1: UL Global Execute Team O-Chart ...............................................................................................11
Figure 2: Operation Process of Testing ........................................................................................................13
Figure 3: Organization Chart of UL VS Viet Nam Laboratory ...................................................................14
Figure 5: Revenue Trend Per Year– K’USD Statistic ..................................................................................17
Figure 4: Revenue Statistic 2018-2020 (K’USD) ........................................................................................17
Figure 6: Total Revenue Per Year– K’USD Statistic ...................................................................................18
Figure 8: Total Expense trend by monthly ...................................................................................................19
Figure 7: Total Expense per year (K’USD)..................................................................................................19
Figure 9: Total P&L by year – K’USD ........................................................................................................20
Figure 10: Total P&L by year – % ...............................................................................................................20
Figure 11: Purchasing Process .......................................................................................................................8
Figure 12: Purchasing Information fields.......................................................................................................9
Figure 13: Purchasing Information fields.......................................................................................................9
Figure 14: Preliminary Cause and Effect Tree. ............................................................................................10
Figure 15: General Sales Process of TIC industrial .....................................................................................11
Figure 16: The Process Model of Customer Journey and Experience for re-purchases...............................14
Figure 17: Updated cause-effect map...........................................................................................................18
Figure 18: Sales Team Organization Chart of ULVS Vietnam Laboratory .................................................18
Figure 19: Customer Services Team Organization Chart of ULVS Vietnam Laboratory ...........................19
Figure 20: Research/ Measurement Model ..................................................................................................20
Figure 21: Scenario – based road mapping method diagram .......................................................................21
Figure 22: The consequences of sales training .............................................................................................22
Figure 23: Fish bone analysis diagram of poor sales activities ....................................................................23
Figure 25: The sales process framework of B2B customer reacquisition efforts .........................................25
Figure 26: Approval hiring request process .................................................................................................27
Figure 27: 2020 Revenue updated and P&L with revenue from customer does not recognize added

(K’USD) .......................................................................................................................................................29
Figure 28: Hiring Process.............................................................................................................................32

Page 5 of 72


List of Tables
Table 1: Monthly Revenue Trend – K’USD Statistic ..................................................................................17
Table 2: Monthly Expense Trend – K’USD.................................................................................................18
Table 3: P&L Trend by monthly – K’USD ..................................................................................................19
Table 4: Customer database ...........................................................................................................................3
Table 5: Total Cost of Revenue in detail 2019 and 2020 – K’USD ...............................................................6
Table 6: Total SG&A Cost in detail 2019 and 2020 –K’USD .......................................................................6
Table 7: Cost Breakdown contribution rate ...................................................................................................7
Table 8: Cost Breakdown contribution rate ...................................................................................................7
Table 9: Random pickup data of purchasing with cost allocation..................................................................8
Table 10: Revenue breakdown of customer which does not recognize in Vietnam (K’USD) .....................28
Table 11: Revenue breakdown if include revenue from customer not recognized (K’USD) ......................28
Table 12: 2020 P&L updated if include revenue from customer not recognized (K’USD) .........................29
Table 13: Alternative Comparison Table .....................................................................................................33
Table 14: Comparison Cost of Solution - USD............................................................................................33
Table 15: Master Plan of Project with detail timeline and activities ............................................................38
Table 16: Network Diagram of Master Plan ................................................................................................39

Page 6 of 72


Acknowledgment
I’d like to say thanks and express appreciation to all of my friends, colleagues at the
workplace, ex-colleagues, classmates and lecturers who supported me during this Master

Business Administration course as well as giving me the ideas, opinions and contribution
for this thesis study.
I also would like to send my thankfulness and special appreciation to my supervisor
Dr. Doan Anh Tuan, who has been very helpful on the advisory, motivation, guidance,
encouragement, instruction and monitoring process of this thesis writing.
I am so glad to give my sincere gratitude’s Dr. Doan Anh Tuan for all his support,
encouragement, valuable suggestions and precious advice throughout the period of this
study.
In addition, my sincere thankfulness to my family for their supportive,
encouragement and motivation led me to join and finish this course.
NOTICE: Mutual of Non-Disclosure Agreement. The company information
provided is confidential. All of the information, financial data, and reports might be used
for study purposes ONLY, you are not allowed to publicize or share these outside of the
class.

Nguyen Trung Dung

Page 7 of 72


Executive Summary
The Testing, Inspection and Certification (TIC) industry is the type of business to
provide TIC service to customers who need their products meet or exceed the expectations
about the product’s quality of their buyers, end users, required standards, global/ regional/
national regulation, and/ or market demands.
Testing is the process to examine characteristics/ specifications of the products by
using international/ national standard methods or in-house test method to evaluate the
performance quality/ safety of products depending on the market demand, customer’s
needs, regulatory or verify against with the claims with the purpose of make sure the quality
of products meet or exceed with expectation of international/ national markets regulatory

and/ or commit to customers.
Inspection is a process that involves checking, examining and assessing production
processes to make sure the quality and quantity of products before leaving the company.
Basically, there are three types of quality inspection: pre-production, in-line, and final.
Certification is a process to demonstrate products, processes, systems and/ or
services that comply with international/ national regulations to certify them.
TIC service providers is the business organization with the revenue and P&L figure
is the performance measures tools for the success. The sale activities are the key factor to
enhanced revenue growth of the organization which contributed to P&L performance. This
paper provides the whole process of solving the problem of poor sales activities of the
laboratory in the TIC industry, the paper provides the way to identify symptoms/ potential/
main problem, validate problem, potential causes/ main cause and how to validate them
depend on nature business context, real data of the specific organization and literature
research.
Basing on the validated cause, the solutions proposed in order of solving the problem
of the firm and fulfillment with requirement of the company about the business, currently
resources, budget, and so on.

Page 8 of 72


1.

COMPANY OVERVIEW

1.1

UL Global
UL stands for Underwriters Laboratories, they are global safety science leaders, and

UL provides the expertise, insights and services necessary to solve critical business
challenges. They help their customers achieve their safety, security and sustainability goals,
meet quality and performance expectations, manage risk and achieve regulatory compliance
( (1).
UL’s mission is working for a safer world. Below principles drive every decision
that they make ( (2):


To promote safe, secure and sustainable living and working environments for
people by the application of science, hazard-based safety engineering and data
acumen.



To support the production and use of products which are physically and
environmentally safe and to apply our efforts to prevent or reduce loss of life
and property.



To advance safety science through research and investigation.



To concentrate our efforts and resources on public safety in those areas where
we can make valuable contributions.



To work with integrity and focus on quality to enhance the trust conveyed by

our certification marks and services.



To charge fair prices that allow us to meet our obligations, sustain our growth,
and invest in safety science and education.



To invest in our people and to encourage our people to invest in themselves.



To be a good example of corporate citizenship and social responsibility.

They focusing to below industries for the business:
Industries

Products and Components

1)

Automotive and Mobility

1)

Appliances

2)

Building and Construction

2)

Batteries

3)

Chemicals and Materials

3)

Beauty and Personal Care

Page 9 of 72


Industries

Products and Components

4)

Energy and Utilities

4)

Components

5)

Financial Services and Payments 5)

Consumer Packaged Goods

6)

Government Services

6)

Furniture

7)

Healthcare and Life Sciences

7)

General Merchandise

8)

Industrial Products and Systems

8)

HVACR

9)

Life Safety and Security

9)

Household and Industrial Cleaners

10) Retail

10) Lighting

11) Technology and Electronics

11) Medical Devices
12) OTC and Dietary Supplements
13) Textiles, Apparel and Footwear
14) Toys and Children's Products

15) Water and Plumbing
UL provides below services for above industries, products and components:
1)

Certification

2)

Testing

3)

Advisory

4)

Auditing and Inspection

5)

Learning and Development

6)

Verification

Other than with above services, UL also provides the Digital application platform
and solutions such as:
Digital Applications platform:


Compliance LMS for Life Sciences



Global EHS Training



Materials and Ingredients Search Engine



Occupational Health Compliance



Simplified CO2 Reporting



Sustainability Management

Page 10 of 72




UL Certification Database

Solutions:


Benchmarking



Brand Risk Management



Chemical Management



Corporate Social Responsibility



Cyber Security



Environmental Health and Safety



Fire Safety/ Functional Safety



Global Market Access



Hazardous Locations



Legal and Regulatory



Supply Chain Assessment



Sustainability and Environment

In order to manage and operate the business. The UL executive team is committed
group leaders with extensive experience and capabilities. Based around the world, they help
guide and lead the success of UL global. The executive team is outlined as below:
President and CEO
EVP and Chief Human
Resources Officer

EVP and Chief Legal
Officer

EVP and President,
Enterprise and Advisory

EVP and Chief Financial
Officer

EVP and Chief
Transformation Officer

EVP and President,
Chief Technology Officer

EVP and Chief Commercial

Officer

EVP and President,
TIC

Figure 1: UL Global Execute Team O-Chart
Source: (1)

The executive team leads UL global strategies, policies, management, and planning
to drives core value of UL with their own executive’s area, following with executive team
Page 11 of 72


UL also has a senior leadership team with responsible to lead UL presence at regions level
and with specific support area such as marketing, information technology, digitals, and so
on.
1.2

UL VS Viet Nam Co., Ltd

1.2.1 Overview
UL established a brand in Viet Nam under legal entity UL VS Viet Nam Co., Ltd in
2007 and operated as a representation office with the purpose of better serving customers,
extending the footprint and paving the way for future development.
They officially operate as a business unit from 2011 with social audit, inspection,
follow up service and factories audit activities at the beginning.
In 2015, the Consumer and Retail Services management team, one of the divisions
of retails and industry business units, decided to build the laboratory in Viet Nam to provide
testing service locally in order to better serve current customers in Viet Nam.
The consumer laboratory in Viet Nam focuses on developing the testing capabilities

for consumer lines such as Garment/ Textiles, Footwear/ Leathers, Toys/ Children's
products and Hardlines. The products covered for these consumer lines are included but not
limited to:






Garment/ Textiles:


Accessories



Adult clothing



Children clothing



Home textiles such as blankets, cushions, pillows and so on.

Shoes/ Leathers:


Accessories



Shoes



Sandals



Handbags



Boot

Toys/ Children's products

Page 12 of 72






Toys



Children’s goods



Premium goods

Hardline


Furniture



Stationeries



Candles



Food contacts



Garden goods

The testing capabilities to be developed:


Safety testing



Labelling testing



Mechanical & physical testing



Flammability testing



Performance testing



Chemical testing / Toxic assessment

According to the consumer products lean process of UL VS Viet Nam Consumer
laboratory, the operation process of testing progress go through eight steps as below:

Sample
Receiving

Test
Assignment

Billing/
Invoicing

Release testing
report

Testing

Review
Testing Results

Test Report
Review

Test Report
Generation

Figure 2: Operation Process of Testing
Source: Data interview collected

The whole process started from the samples received and ended at billing/ invoicing
to customers. As the interview with Operations Manager “what is the key success of
process?” he said “the key success of operation process is report lead time, report accuracy
and on time delivery”
Page 13 of 72


1.2.2 Organization Chart
Referring to Quality Manual of consumer laboratory, the organization chart of the

lab as below:
Operations Director

Regional Sales Manager

Operations Manager

Regional Quality Manager

Local Sales Team

Test
Assignment

Quality Assurance

Customer
Services

Testing
Department

Administrative
Team

Soft-lines testing

Chemical Testing

Hard-lines testing

Footwear Testing

Report
Generation

Figure 3: Organization Chart of UL VS Viet Nam Laboratory
Source: Quality Manual of UL VS Vietnam Laboratory

According to the role and responsibility mentioned in the function department
responsibility:
Operations Manager is responsible for Profit and Loss (P&L) management for the
whole laboratory. He/ she is responsible for the whole operating process in the lab, leading
the working as desired codification, procedures, and alignment with regional/ global goals
as well as adhering to the core value of UL globally. He/ she directly reports to the regional
manager and dotted line reports to the country manager who is responsible for the locally
legal entity. Operations manager is also responsible for leading local business strategy as
well as looking for business development plans.
Sales team is responsible for selling testing services, outreach vendors/ suppliers,
and looking for new customers. Sales team directly reports to the regional commercial team
and the dotted line reports to the operation manager for daily activities as well as sales
performance based on the target.
Page 14 of 72


The QA team is responsible for maintaining the operating quality management
system and plans for the internal quality assessment. Monitor the service implementation
process, support the operation process in all activities which are related to the quality
management system, consolidate the statistical data, the phenomena which mismatch in the
process of implementation services.

The Test Assignment team is responsible for the login project and assigns test
packages according to test requests from customers to the system.
The Customer service team contacts, dealing directly with customers about the
company’s activities and services. Support for customer maximum utility related client
testing sample. Provide the most satisfaction for customer related services provided.
Monitoring and regular update to the client progress and testing sample status. They are
also responsible for booking orders to systems and follow up payment status with
customers.
Administrative team is responsible for billing the testing fees, invoicing process,
customers visit activities and other admin works.
Report team is responsible for report generation from testing results of testing team,
review the testing reports to fulfillment with customer’s requirement, market demand, and
customer information before passing to customer service team to release testing report to
customers.
The Testing department is responsible for developing and maintaining staff
competencies, including training/ updating the sales team on the related services. Ensure
the service delivery in compliance with laboratory policy and procedures. Support sales/
customer service team in strengthening customer relationship, customer care activities to
enhance their product quality. Provide technical recommendation/ advice for the sales team
related to quotation, tender... and so on. Monitor maintenance and calibration of equipment,
inventory controlling.
1.2.3 Company Context
According to the financial summary of the year 2020, an annual business
management meeting will be reviewed in January 2021 with the purpose of reviewing the

Page 15 of 72


business results for the whole year of 2020 and looking for improvement opportunities as
well as setting up a plan and action plan for a year 2021. Operations Manager mentioned

that “Our laboratory revenue result is ahead with an adjusted budget plan 18.3%. However,
generally still not meeting the budget from the beginning of year (31.3%), besides the P&L
is still lost continuously 3 years from (58%) to (24%), having said that we are losing money
and our laboratory business performance is totally not effective. So, our key performance
of this year 2021 is to make our laboratory business profitable while the other quality KPI
and/ or integrity/ ethics and compliance would be aligned with global policies to support
our UL global mission and vision”.
Referring to the output of the annual business management meeting, there are two
potential symptoms: Low Revenue and Not Profitable where the business results of UL VS
Viet Nam laboratory is not effective. Therefore, this thesis is diagnosed and analyzed in
detail then provides the action plan to help the business of the laboratory better and more
effectively.
2.

SYMPTOMS

2.1

Symptom 1: Low Revenue Growth Rate
Referring to the December 2020 financial summary and revenue trend from 2018 to

2020, the revenue of 2019 is 48.6% growth compared with 2018 but at the end 2020, it was
declined (10.7%) compared with 2019. Meaning that the growth rate of revenue is not
logical and tends to decline.
Below are compared revenue data of three period fiscal year 2018, 2019 and 2020.
The data comparison showed growth rate of 2019 compared with 2020, real revenue among
the year, and real 2020 compared with target revenue in 2020.
The analysis illustrated as total revenue of the year and breakdown by monthly
revenue level.
The breakdown of monthly revenue as below:

Year

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

2018_FY

515

436

393

425

374

342

183

370

318

358

466

396

2019_FY

468

271

449

518

646

627

637

676

560

471

639

833

Page 16 of 72


2020_Target

530

645

707

768

795

804

821

804

742

724

751

742

2020_FY

581

488

507

452

250

420

418

368

578

631

574

800

Table 1: Monthly Revenue Trend – K’USD Statistic
Source: UL Vietnam Laboratory Financial Summary 2019&2020

The chart of monthly revenue illustrated:
Revenue Trend (2018-2020) - '000 USD
900
800
700
600
500
400
300
200
100
Jan

Feb

Mar

Apr

2018_FY

May

Jun

2019_FY

Jul

Aug

Sep

2020_Target

Oct

Nov

Dec

2020_FY

Figure 4: Revenue Trend Per Year– K’USD Statistic

Source: UL Vietnam Laboratory Financial Summary 2019&2020

The total revenue trend and growth rate along 2018 to 2020:
2018-2020 Growth Rate

2018-2020 Total revenue trend
60.0%

8,000
6,797

7,000

50.0%
6,067

6,000
5,000

40.0%
30.0%

4,576

4,000

20.0%

3,000

10.0%

2,000

0.0%

1,000

-10.0%

Year

2018_FY
4,576

48.6%

2019_FY
6,797

2020_FY
6,067

-20.0%

2019_GR

-10.7%
2020_GR

48.6%

-10.7%

Year

Figure 5: Revenue Statistic 2018-2020 (K’USD)
Source: UL Vietnam Laboratory Financial Summary 2019&2020

As further checked with Operations Manager “Would you please help to elaborate
more about the target revenue in 2020?” He said “I just joined the organization from March
Page 17 of 72


2020 so the revenue target was set up by the previous management team. The target is 30%
growth compared with what was actually delivered in 2019”.
The total revenue compare with target illustrated as below:
Total Revenue (2018-2019-2020) - '000 USD
10,000

8,833

9,000
8,000

6,797

7,000

6,067

6,000
4,576

5,000
4,000
3,000
2,000
1,000
-

2018_FY

2019_FY

2020_Target

2020_FY

Figure 6: Total Revenue Per Year– K’USD Statistic
Source: UL Vietnam Laboratory Financial Summary 2019&2020

As revenue trends per month and total revenue per year with the statistic of revenue
growth rate we can see that revenue does not meet the target and even declined once
compared with previous year as significant for further investigation.
2.2

Symptom 2: Not Profitable
According to an interview with the Operations Manager who is responsible for P&L

management of UL VS Vietnam laboratory “what is your laboratory profit level?”, he said
“our laboratory is still losing money, meaning that we are not profitable from 2018 till now
but it is getting better year by year”.
Also according to financial summary, the breakdown of total expense and P&L by
monthly showing as below:
Year

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

2018_FY

432

516

644

607

715

675

413

626

660

666

640

652

2019_FY

622

670

714

807

826

848

804

768

637

876

773

801

2020_FY

903

466

510

604

688

695

563

453

625

618

695

728

Table 2: Monthly Expense Trend – K’USD
Source: UL Vietnam Laboratory Financial Summary 2019&2020

Page 18 of 72


The total breakdown by month expense illustrated as below:
Total Expense Trend

1,000
900

800

700
600
500
400
300
Jan

Feb

Mar

Apr

May

Jun

2018_FY

Jul

Aug

2019_FY

Sep

Oct

Nov

Dec

2020_FY

Figure 7: Total Expense trend by monthly
Source: UL Vietnam Laboratory Financial Summary 2019&2020

So, therefore the total expense data for three years continuously as financial
summary showing as below:
9,146

10,000

7,548

7,245

8,000
6,000
4,000
2,000
-

2018_FY
7,245

Sum

2019_FY
9,146

2020_FY
7,548

Figure 8: Total Expense per year (K’USD)
Source: UL Vietnam Laboratory Financial Summary 2019&2020

P&L data breakdown by month over the 2018 to 2020
Year

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

2018_FY

83

(80)

(251)

(182)

(341)

(333)

(230)

(256)

(342)

(308)

(174)

(256)

2019_FY

(154)

(399)

(265)

(288)

(180)

(221)

(167)

(92)

(76)

(405)

(134)

33

2020_FY

(322)

21

(3)

(152)

(438)

(275)

(145)

(85)

(47)

13

(122)

73

Table 3: P&L Trend by monthly – K’USD
Source: UL Vietnam Laboratory Financial Summary 2019&2020

Total P&L data breakdown by year over the 2018 to 2019

Page 19 of 72


P&L ('000 USD)

P&L (%)

(500)
(1,000)

(1,481)

(1,500)
(2,000)
(2,500)
(3,000)
P&L

(2,349)
(2,669)
2018_FY
(2,669)

2019_FY
(2,349)

2020_FY
(1,481)

Figure 9: Total P&L by year – K’USD

0.0%
-10.0%
-20.0%
-30.0%
-40.0%
-50.0%
-60.0%
-70.0%
P&L

-24.4%
-34.6%

-58.3%

2018_FY
-58.3%

2019_FY
-34.6%

2020_FY
-24.4%

Figure 10: Total P&L by year – %

Source: UL Vietnam Laboratory Financial Summary 2019&2020

As the data collection provided, the UL VS Vietnam laboratory is not profit in

continuously three years meaning that the business is not successful. According to (3), the
overview of business is required to make a profits. Having said that the UL VS Vietnam
laboratory not meet with basic requirement of business and this is may come from not good
business model, costs management, superior technology and products, excellent people, not
good governance, and/ or not properly leadership and so on.
So, referring to the Operations manager statement and financial summary of three
continuous fiscal years we can find that UL VN Vietnam laboratory not profitable is a
significant key indicator that needs further investigation too.
3.

PROBLEM IDENTIFICATION

3.1

Potential Problem

3.1.1 Poor Sales Activities
According to (4), the sales activities are all the actions that salesperson works on
daily basic which included but not limited to such as practices, tactics to moving forward
with prospects and customers through the firm’s process. All these activities lead to win
business or got the agreement from customers to enhance for the sales goals meet with
target.
Mr. Philip Nguyen, operations manager is principal supportive to assign key team
leaders of UL VS Vietnam laboratory to investigate to find out potential problems which
may lead to low revenue and not profitable symptoms. His mentioned in the intake meeting

Page 20 of 72


“there are several major reasons which may made our laboratory business not meet with

target that I supposed, first one is the effect of COVID-19 pandemic crisis which significant
impact to supply chain and market demand due to lockdown, second one is sales
performance is not good, third one is customers lost/ declined on revenue and the last one
due to we have not identified target customers”. In further exploration with him, he said
“the inefficiency of customer outreach is the reason for low sales performance and poor
customer experience is the reason for lost customers, these ones are consequences of low
revenue”.
According to (5) sales performance of the salespersons and/ or sales organization
based on what they produced/ delivered (ex. Sales outcomes) as well as what they have
done (ex. Sales behavior) while the importance is sales outputs which include generation
of sales units, new accounts, market share, revenue profitability and so on. And (6) also
mentioned that the individual sales l sales employees were assessed based on a comparison
of actual sales to established sales goals, meaning that the sales performance depended on
the sales outcomes compared with sales goals (target revenue).
By the (7), one of the factor that impact to revenue stability is revenue
diversification, and the level of diversification appears to be a critically important for the
forecast of expected revenue, so as the operation managers mentioned the customers
outreach process so inefficiency, the customers outreach efficiency is they key that make
the firm diversification in revenue and is the one of the influence significant effect to sales
performance.
According to an interview with the operations manager, he mentioned that “They
had lost/ declined customers in 2020 and they also gained new customers too but
unfortunately that the quantity of new customers has not reflected the revenue lost/
declined”. Referring to the sales map of UL VS laboratory in 2020, the details of quantity
new customers gained, and the customers lost/ declined corresponding with revenue as
below:
Customer Database
Total Customer in 2019

Quantity

Revenue (K’USD)

204

/

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Total Customer in 2020

293

/

Customer Lost

112

(687)

Customer Declined in Revenue

46

(2,215)

New Customer in 2020

201

1,524

Table 4: Customer database
Source: Sales Map 12_2020

We can see that the total quantity of customers lost (it mean the customers already
lost and there is no revenue from them so far in 2020) and customers declined revenue (it
mean the customers still exist but their revenue in 2020 are lower than with 2019) in 2020
is 158 customers while the quantity of new customers is 201. However, the revenue from
new customers is not covered for lost and declined, so this amount (1,378KUS$) has a
significant effect on revenue.
Per interview with Mr Nhut Phan, who is customer service leader responsible for
controlling and managing customer’s database, customer facing, receiving and feedback
customer requests. He is well known about customers’ needs and customer satisfaction, he
said that “our customer services team is responsible for all the activities which related to
customers experience and also working as inbound salesman to retain existing customers”.
Referring to (8), the customer experience is a set of interactions between a customer
and a company’s representative in multidimensional and difference levels such as
emotional, rational, sensorial physical and spiritual. The customers experience enhanced
the customer’s expectation with the company to increase the competitive advantage as well
as keep them stay with the company.
According to (9) the poor customer service is one of the factors that drive customer’s
satisfaction, while the dissatisfaction study also found if 100 people had a terrible
experience with customers, a firm tends to lose between 32 and 36 current or potential
customers. The (10) also concluded that dissatisfied customer service also influenced them
to continue to purchase products or services from their existing service providers.
As the operation manager said “our commercial team is responsible for sales,
business development. The sales process is quite complicated and there are many roles in

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the commercial team such as Global Sales, Global KAM, Regional Sales, Region KAM. In
Vietnam, we don’t have KAM and only have local sales”. The Sales Executive also
mentioned that “we are working based on POI (Point of Influence) and POS (Point of
Sales). POI, means the salesman who is directly working with buyers and/ or retailers to
get nomination, laboratory third party testing approval. POS, means salesman who are
working with vendors/ agents/ and supplier’s levels”. Nowadays, the quantity of exclusive
program is reduced due to transparency and competitiveness of the market. Therefore, the
local salesman is very important to get customer boards and get vendors/ agents/ and
suppliers to share with competitors and it makes a significant impact on the revenue
generation.
As interviewed with Ms Scarlet Phan, sales executive who is leading all sales
activities of UL VS Vietnam laboratory as well as responsible for revenue of business along
with operations manager. She well known about nature of sales/ business nature,
competitor’s information and market overview, she said “currently sales activities quiet
poor due to overloaded of outbound and inbound salesman, the huge quantity requirement
and tasks was occupied full time of daily time so we have not conduct or implementation
activities to outreach customers”
Referring to the (11) there are totally 170 sales activities among the 29 products
service and 11 services industry categories. In the deep interview with Ms. Scarlet Nguyen,
sales executive of UL VN Laboratory, mentions “the successful rate of customer outreach
affected by the sales activities that we can bring new customers on board”. So, the sales
activities are affected by the efficiency of the customer outreach process.
Final confirm with operations manager, he said “the poor sales activities is one of
the potential problems of our laboratory and those activities will bring new customers to
us as well as help us to keep the existing customers”
3.1.2 Wrong Cost Allocation

As clause 2.2, the UL VS Vietnam laboratory is not profitable with P&L is minus
24.4%, and as the interviewed with operation manager “there are two main reason made
the laboratory not profitable, the first one is revenue lower than with target so it is not

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covered for expenses and the second ones is overhead cost”, per his initial investigation
“As my checking in details of expense details, I found that the cost allocation is significant
affected. Example: there are some maintenance, assets cost was booked into the materials
costs and especially that there is some cost from another department was booked under
cost center of UL VS Vietnam laboratory”
As the results of profit and lost data, the cost structure is divided into two main cost
centers which is Cost of Revenue and SG&A. The cost of revenue is covered for all the
costs related to operation such as salary and incentives, fringes, materials, maintenance,
depreciation, and so on. The cost of SG&A is covered for all the costs related to sales,
general and admins activities.
The global account code, account category and grouping was found according to the
UL global financial system.
The total cost for operation in details as below.
2020 vs 2019
Cost in Details
Salaries & Incentives
Fringes
Depreciation and Amortization
Space
Recoveries & Transfers
COR Direct Travel & Meals
COR Indirect Travel & Meals
Marketing and Comm

Employee Related
Outside Services - Non-Chargeable
Maintenance Contracts - Furniture and Equipment
Copiers/Printer Service
COR IT Communications
COR Manufacturing Labels
COR Equipment Rental
COR Materials Supplies
COR Maint. & Rep-Furn&Equip
COR Value Added Tax
COR Postage Freight & Carrier Charges
COR Small Equipment

2020 FY

2019 FY

1,877
360
1,988
541
255
45
128
21
699
73
1
75
(1)

14
484
53
267
61

2,022
478
1,925
667
117
21
135
4
45
831
50
1,036
64
0
290
43

$

%

(144)
(118)
64

(126)
138
24
(6)
(4)
(25)
(132)
73
1
25
(1)
14
(553)
(11)
(0)
(24)
17

-7.1%
-24.7%
3.3%
-18.9%
118.2%
112.2%
-4.7%
-100.0%
-54.4%
-15.9%
49.2%
-53.3%

-17.3%
-100.0%
-8.2%
39.6%

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