Post on 21-Jan-2018
Strategic + Process Approach Business Performance Management
4Q-2012
Innovation Growth
Ajay Koul
Sponsorship
Roadmap
1 Define Scope
& Objective
2 Assemble
Core team
3 Detail data
needs
4 Research
& Analyze 5 Share results
& discuss
implications 6
Conduct &
Prioritize
SWOT
7 Develop Vision
& Ambition
8 Key Actions &
Hypotheses 9
Hypotheses
Testing &
Finalization
10 Management
Approval
11 Roll-out &
Execute
12 Monitor &
Align
Business Performance Management (BPM) A simple, disciplined method for improving business performance –
growth, profitability, productivity, customer retention.
Objectives
Gaps filled: Marketing, Training, Support
-5 pts. LCR, 1-Page Web, Quick Start
+10 pts Cust. Sat. of CCP, -1 pt. Warranty
EU Geographic Team BPM
Efficiency, Effectiveness
Drives BPM
Efficiency, Effectiveness
XXXX BPM
Profitability
Channel BPM
Penetration, Expansion
2011: Progress in Most BPMs. 2012: Project Management Rigor for Deeper Impact.
1
2
3
BPM: 2011 Results
Improve Sales Time Spend
Increase Sales Effectiveness
Redefine the Drives Organization
Improve Customer Retention Drivers
Optimize Geographic Coverage
Execute Service Strategy
Move xxxx and yyyy to zzzz
Move aaaa to bbbb
Reinvigorate the Industry Channel
Increase Market Penetration
Recommendations Results
4
Exit the Business
Expand Access via New Channels
+30% Sales $/HC ($2M $2.7M)
+11 pts CFT, +12 pts Pre-Sales
+15 pts Target Segment focus
Exec. Mgmnt. Approve to exit the business
Divestiture actions
CDM resources, ACE 2.0
e-Distrib. resource, e-Distrib. targets
Web Info packets, SKUs
CLICK for more details of
some BPM Outcomes
Process Overview
(examples from the various BPMs)
Planning and Prioritization
in progress
being scheduled
not selected
BPM
Projects
Pe
rfo
rma
nc
e
Ga
p (
Cu
r.
vs
Urg
en
cy
Imp
ort
an
ce
1 Elect. South 10 10 10
2 Motors 9 9 9
3 OEM-N 7 7 9
4 Channel -2 8 7 8
5 S&S post-sales 7 8 8
6 Automotive 7 5 7
7 F&B 8 8 7
8 C-Sat/Quality 5 5 6
9 CPB 2 2 6
10 SI 2 2 4
12 BIC 4 3 3
11 S&S pre-sales 4 3 3
13 OEM & EU 2 3 3
BPM Prioritization 2011
Elect.
South
OEM-N
Channel -2
S&S
post-sales
F&BAutomotive
Motors
CPB
SI
Cust.Sat
Quality
S&S
pre-sales
BIC
OEM
& EU
0
2
4
6
8
10
0 2 4 6 8 10
Urgency
Imp
ort
an
ce
Back
Define Scope & Objective
Back
Define Objective
Improved profitability of the
xxxxxx Business
Scope Outline
Identification of
Levers for Analysis
Cost Levers
• Raw Materials
• MBC, SFC
• FX
Revenue Levers
• Current offer including
market forecast
• Future product
introductions
• Price changes
Analysis Pathway
Identify Data and Info needs
•Operational issues
•Market for xxxxxx
•Customer expectations
•Alignment to corporate goals
Analysis
•Prepare pro-forma financial
statement with scenarios
•Prepare of balance sheet with
effects, e.g., footprint changes.
Output
•Recommend: invest, divest
Detail the Data Needs
Excel file can be
opened in non-
slide-show mode
Back
Research & Analyze (Example 1) Anatomy of Sales Time-Spend
Back
11%
56%
33%
41%
33%
26%
27%
47%
27%
Sales Survey: Simulation Tool & Usage:
1. Identification of business levers
2. Correlation of Effort vs. Outcome
3. Simulation of potential trade-offs
4. Selection of change actions
Pre
Sa
les
(Av
g.
= 5
6%
)
Pro
po
sal/
Qu
ote
s
(Av
g.
= 8
%)
Po
st
Sale
s
(Av
g.
= 3
6%
)
Cu
st.
Fa
cin
g
(Av
g.
= 3
2%
)
Te
ch
nic
al
Su
pp
ort
(Av
g.
= 1
7%
)
Co
mm
erc
ial
Su
pp
ort
(Av
g.
= 1
3%
)
Tra
ve
l (C
us
t.)
(Av
g.
= 2
1%
)
Oth
er
(Av
g.
= 1
8%
)
Ta
rge
t S
eg
me
nts
(Av
g.
= 5
1%
)
No
n T
arg
et
Se
gm
en
ts
(Av
g.
= 4
9%
)
Bob 0.75 5% 0.20 0.35 0.10 0.05 0.35 0.15 36% 64%
Peter 0.50 10% 0.40 0.30 0.20 0.20 0.10 0.20 57% 43%
Paul 0.55 10% 0.35 0.45 0.25 0.10 0.15 0.05 44% 56%
Pat 0.59 10% 0.31 0.30 0.10 0.10 0.15 0.35 51% 49%
Nick 0.75 5% 0.20 0.30 0.15 0.15 0.20 0.20 40% 60%
Lee 0.15 5% 0.80 0.10 0.30 0.25 0.30 0.05 89% 11%
Jason 0.45 5% 0.50 0.40 0.10 0.10 0.20 0.20 56% 44%
Dave 0.79 5% 0.16 0.35 0.15 0.15 0.20 0.15 31% 69%
Charlie 0.50 15% 0.35 0.30 0.15 0.10 0.20 0.25 54% 46%
Steve
Total Time =
100%
Total Time =
100%
Total Time =
100%
Key:
≥ 20 pts better than Average
80% - 120% of Average
≤ 20 pts worse than Average
No Data
Next
Research & Analyze (Example 2) North East Customer Retention (All Products)
Increase Customer Retention for all products 26% Customers (All Products) lost in 2011 vs. 2010
970
GM: 51%
995
GM: 51%
1,377
GM: 51% 1,015
GM: 50%
313
GM: 45%
277
GM: 49%211
GM: 51%
-338
GM: 54%
-297
GM:50%-362
GM: 60%
2008 2009 2010 2011
Existing Gained Lost
$32K/Cust.
$7K/Cust.
$31K/Cust.
$6K/Cust.
$8K/Cust.
$40K/Cust.
$5K/Cust.
$10K/Cust.
$44K/Cust.
$4K/Cust.
Back
Next
Research & Analyze (Example 3) BDS Deployment against PAM and # of Customers
Optimize PAM Coverage
Nick R.
PAM: $33M
# Cust.: 134
Charles B.
PAM: $44M
# Cust.: 151
David M.
PAM: $10M
# Cust.: 54
Jason R.
PAM: $20M
# Cust.: 131
Bob H.
PAM: $11M
# Cust.: 101
Paul K.
PAM: $20M
# Cust.: 131
Patrick H.
PAM: $19.2M
# Cust.: 103
Peter D.
PAM: $20M
# Cust.: 161
Lee D.
PAM: $20M
# Cust.: 132
Steve F.
PAM: $11M
# Cust.: 83
Color represents = BDS Region
Back
Next
Research & Analyze (Example 4) Project Pricing
Toyota Huntsville 42% CCO - GM Life Span
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
1,800,000
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Time
$$
$ A
mo
un
t
Net Sales
CCO-GM$
Net Sales,
4,450,474
CCO-GM$,
1,849,707
Nissan 20% CCO-GM life span
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
2007 2009 2010 2011
Net Sales
CCO - GM$
Net Sales,
5,727,099
CCO - GM$,
1,164,991
Volkswagen - 7.6% CCO-GM% Life Span
$(2,000,000)
$-
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
$14,000,000
$16,000,000
$18,000,000
$20,000,000
2009 2010 2011
Net Sales
CCO-GM$
Net Sales,
$24,126,562
CCO-GM$,
$1,828,410
$-
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
Total
Toyota Huntsville – 42% CCO-GM lifespan Nissan 20% - CCO-GM lifespan
VW – 7.6 % CCO-GM lifespan
Evidence Downstream projects fetch improved margins.
Propose
Life Cycle Pricing Approach for improved Win/Loss outcomes
Back
Research & Analyze (Example 5) Current Operational Model (Mfg. footprint unchanged)
Real
Appreciation
(CAGR of 3yrs)
Offer &
Segment
Expansion
Price
increase in
2012
No Yes 10%
Yes Yes 10%
Yes Yes 3%
Yes No 3%
EBITDA Comparison-20%
-15%
-10%
-5%
0%
5%
2011F 2012E 2013E 2014E 2015E
2.4%
-1.2%
-6.1%
-14.4%
Scenario Analysis
2011F EBITDA: ($4,189)M
-16.0%
Back
Conduct & Prioritize SWOT
Leverage Strengths
Exploit Opportunities
1. Solution Capability e.g., OEM, WWW
2. Tech. & App. Competency in custom drives
3. Access to the Buildings Market
4. Global Presence
5. Presence in all key market segments
Reduce Weaknesses
Mitigate Threats
1. High Attrition Rate of Customers
2. Services and Warranty Process
3. Under-utilization of Distributor Channel
4. Lack of Comprehensive Training in Drives
5. Low Utilization of OEM Sales for Drives
1. Mechanical Market
2. Process OEM, e.g., WWW, O&G, MMM
3. Energy Mgmnt., e.g., pumps/fans, retro-mkt
4. Custom Engineered Applications
5. Municipal Jobs
1. Competitors Established in Mech. Channel
2. Drives Moving from Div. 15 to Div. 16
3. Advanced Harmonics Mitigation Tech.
4. Low Cost Niche Players
5. 90% Less Power Loss with Silicon Carbide
SWOT Elements Basis for Developing Our Business Options
Back
Develop Ambition
Ambition 2009 A 2010 F 2011 F 2012 2013 2014 2015
1 Revenue (IDSDS, IDVSD) $62.2M $71M $75M $87M $105M $128M $150M
2 Overall EBIT (IDSDS, IDVSD) -5.2% 7.5% 10% 11.5% 13.0% 14.0% 15%
3 Enclosed Offer GM 30% 30% 31% 34% 38% 40% 45%
4 ACE Partners (xx prod lines) $26.6M $29.9M $33M $37M $42M $49M $57M
5 Partners seg 1 & 2 $3M / $4M $3M / $3M $6.5M $8.5M $13M $17M $23M
6 Core Channel $29.2M $32.8M $34M $37M $40M $44M $49M
7 Addnl. channel partners 0 0 2 4 5 5 5
8 OTD Performance ~80% 93% 99% 99% 99% 99%
9 Lost calls 15.6% 12.9% 10% 7% 4% 2% <1%
# Warranty Cost 3.4% 2.6% 2.3% 2.0% 1.7% 1.5% 1.2%
FIN
AN
CIA
LC
HA
NN
EL
EF
FIC
IEN
CY
Assumptions:
• Product availability at 98% beyond 2011
• Investments are made, primarily in headcount
• Buildings Business will need to invest in support functions Back
Create Strategic & Tactical Actions
Back
Collaboration via < Web Portal > for Deliverables
Individual Folders for each workshop for participants to collaborate
Please visit quickr for more details
Back
• Redefine the Organization and Improve Time Spend:
Improve gaps in Front Office (PAE coverage, Time Spend), Back Office (Marketing)
Progress/Action/Outcome: • Coverage optimized via PAE deployment.
• Added competencies via new positions in Marketing, Training, Support
• Time-spend survey in 4Q12
• Develop/Execute Talent Management Strategy:
Increase competence and optimize training
Progress/Action/Outcome: Competency assessment compilation in 4Q12
• Develop/Execute Channel Strategy:
Leverage ACE Partners for Drives growth.
Progress/Action/Outcome: • Promotions, increased training hours.
• YE Financial report due 2nd half of Jan.
• Drive Customer Loyalty for Retention. Develop/Execute Service & Support Strategy:
Increase (a) PSG Support, (b) Warranty, (c) Web, (d) Field Services, (e) Training
Progress/Action/Outcome: • +5 pts. PSG Lost Call Rate (12.1%7.1%); 5700 extra cust. capacity
• -1 pt. Warranty Cost (3.4%2.4%), $750K approx. savings
• Drastic improvement in info access via One-Entry-Page approach
• New quick-start guide (global Drives team accepted for all drives)
• +10 pts Customer Satisfaction of CCP Report quality (65% 75%)
• Redefine/Renew Product Roadmap:
Optimize enclosed drives features-cost-value. Improve offer gap-filling/launch process.
Actions & Outcomes post-BPM Fact-based Strategic Actions 4Q11 (and progress 4Q12)
Back
Nine more BPMs
for
Strategy, Process and Growth.
(Details available separately)
End of the Document