Digitise a component catalogue in Ahmedabad?
Before the decision
Phone orders are fast for familiar buyers but new customers struggle to identify equivalent parts. A senior salesperson recognises several suppliers’ codes for equivalent parts. The new catalogue must transfer that knowledge without encouraging incompatible replacements.
The problem
Should the team choose Self-serve catalogue or Inside sales desk for the next 12 months?
Decision owner: The business unit lead.
A bad substitution can create returns and damage repeat purchase.
Option economics
Scroll the table to see all figures.
| Option | Volume (orders) | ₹ per unit | Fixed cost | Net contribution |
|---|---|---|---|---|
| Self-serve catalogue | 1,19,000 | 78 | ₹66 lakh | ₹26.82 lakh |
| Inside sales desk | 1,07,000 | 88 | ₹61 lakh | ₹33.16 lakh |
Make the call
- Calculate net contribution for Self-serve catalogue and Inside sales desk. Which assumption makes the comparison most fragile?
- If the leading option delivers 10% fewer orders, does your recommendation change?
- What evidence would you ask for before the team makes an irreversible commitment?
Reveal the worked solution
Start by validating Inside sales desk. It contributes ₹33.16 lakh after fixed costs and leads by ₹6.34 lakh. Treat that gap as the amount of unmodelled cost or lost contribution the option can absorb before the ranking reverses.
- Frame the decision
Compare the cost of delivering a successful outcome, including exceptions and manual work. Check whether the operating team can run the new process.
- Calculate both options
Self-serve catalogue: 1,19,000 orders × ₹78 less ₹66 lakh in fixed costs gives ₹26.82 lakh. Inside sales desk: 1,07,000 orders × ₹88 less ₹61 lakh in fixed costs gives ₹33.16 lakh.
- Stress-test the forecast
Inside sales desk leads by ₹6.34 lakh in the base case. If Inside sales desk delivers 10% fewer orders (96,300) at the same margin and fixed cost, it contributes ₹23.74 lakh. Holding the other option constant, the stressed result falls behind. This isolates volume risk. Check whether both options would respond to the same change in demand.
- Set a decision threshold
Holding the other option’s result fixed, Inside sales desk needs at least 99,796 orders to match or beat it under the model. Track incorrect-fit returns and time to first correct order.
A bad substitution can create returns and damage repeat purchase. Compare the cost of a limited test with the loss the business would face if the full commitment failed. Ask the team to agree the decision criterion before collecting more evidence.
What if the whole market moves?
The worked solution tests a change to one option at a time. Here, both options gain or lose the same percentage of volume. Unit contribution and fixed costs stay constant.
| Volume scenario | Self-serve catalogue | Inside sales desk | Higher contribution |
|---|---|---|---|
| Both lose 10% of volume | ₹17.54 lakh | ₹23.74 lakh | Inside sales desk |
| Base assumptions | ₹26.82 lakh | ₹33.16 lakh | Inside sales desk |
| Both gain 10% of volume | ₹36.1 lakh | ₹42.58 lakh | Inside sales desk |
Explain which option you would take forward. Check whether capacity, price or customer mix would also change as the market moves.