Post on 25-Jun-2015
description
Short Term Planning
Subject Principles of Management
Course MIM – (Aug 2010 Batch)
Team Members
Sidhesh Mangle
Mahesh Surve
Nilesh Tawade
Nikhil Marne
tnilesh@godrej.com
Agenda
What is short term planning Definition
Objective
Advantages
What is Strategic Plan
How targets are Developed Methodology
Tools usage
How budgets are developed
How budgets are monitored
* What should a plan be?
Planning can be summarized in 3 easy steps: 1. choosing a destination2. Evaluating alternative routes and 3. Deciding the specific course of your plan
* Purpose of a planHelps management to clarify, focus, and research their business's or
project's development and prospects
Provides a considered and logical framework within which a business can develop and pursue business strategies over the next three to five years.
Offers a benchmark against which actual performance can be measured and reviewed.
Mr.Kamalnayan Bajaj established Bajaj Auto in 1945.
In 1950 Bajaj started importing scooters and three wheelers from Piaggio
In 1960, BAL collaborated with Piaggio to manufacture its products in India
As the import policies were in favour of Indian manufacturers , Bajaj enjoyed a high share of seller’s market for 22 continuous years
In 1975, BAL joint ventured with Maharashtra government to establish a manufacturing plant
Company Background Nikhil
2 Wheelers • Pulsar
• Pulsar - 150• Pulsar - 180• Pulsar – 220• Discover• Discover-100• Discover-150• Platina• Platina -100• Platina – 125• Avenger • Avenger - 220
Product Catalog
Passenger Carriers • RE2S• RE 2S CNG• RE2S LPG
Goods Carriers • GC Max Diesel• GC Max CNG• RE600
Challenges for the business In the 3rd Qtr of 2010, Bajaj Automobile was going through a serious competition
A big challenge for business was the R&D department & Engineers have to cope with heavy workload
Employment of further resources is not an option for the management. Therefore, the efficiency of the R&D department must be substantially improved to deliver on time
From the past experience, It has been noticed that the New Products Suffer from higher Failure due to higher cost of production , overheads, marketing & Material cost etc
Mahesh
Objective To increase the product demand and build both volume and market share Improving product quality & Efficiency Keeping costs and prices low Concentrating on 2-wheeler vehicles due to below reasons –
Used for Daily Commutation Inadequate Public Transport facilities Majority are those who are entering workforce from college Need for Personal Transport increased
Sid – Add some Images / Smart
Art
Mahesh
Strategic Plan Research on the products which has more demand in market 5% Raw material cost Reduction initiative New sales & promotion schemes
Target the existing product (Pulsar 150) as per the market demand & Enhance it using below factors
Advance technology Using Minimum resources Minimum efforts to Train the labors Same Assembly line & tools
Restructuring program Identify the resource utilization across different divisions or functional
teams & use them appropriately
Corporate rules - Headcount must not be increased by 2%.
Cutting down un-necessary costs across all departments
Sid – Add some Images / Smart
Art
Mahesh
Engine Existing Bike - Pulsar 150 Proposed Bike - Pulsar 135
EngineSingle Cylinder, air cooled, four stroke Single Cylinder, air cooled, four stroke
Displacement 149cc 134.66ccPower 15.06 bhp @ 9000 rpm 13.5 bhp @ 9000 rpmTorque 1.3 kgm @ 6500 rmp 1.16 kgm @ 7500 rmpGearbox 5-speed : 1- down, 4-up 5-speed : 1- down, 4-upFront Brake 240mm disc 240mm discRear Brake 130mm drum 130mm drumWheels 6 spoke alloy 5-spoke alloyFuel tank capacity 15 litres 8 litresGround Clearance 165mm 170mmPrice Ex-showroom Rs. 60k Rs. 51k
Target Pulsar 150 to Enhance
Mahesh
Market Survey - Applying Feedback Analysis
Analyze customer's feedback to understand the requirement for 2 wheeler as per
Income group Customer age group Historic Sales Product Positioning Product Price
Targeting Methodology
Sid – Add some Images / Smart
Art
Sid
Targeting MethodologyIncome Group Analysis
Annual Income % Users
<1.5 58
<3 27
<4.5 10
<6 3
>7 2
Age - Group Analysis
Sid – Add Notes
Sid
Historic Sales - Competitor Analysis
Targeting MethodologySid
Product Life Cycle Stages
Product development
Introduction
Growth
Maturity
Decline
Sid – PDLC Chart of Pulsar 150,160, 135 +
Notes
Raw Material - Spend Analysis 2009-10
Eng
ine
Kit
Met
al C
ompo
nent
s
Gea
r B
ox K
it
Ele
ctro
nics
Ite
ms
Ele
ctric
al I
tem
s
Ligh
ting
Sys
tem
Tub
e C
ompo
nent
s
Pla
stic
Com
pone
nts
PU
Cus
hion
s
Leat
her
Sea
ts
Har
dwar
e It
ems
Mec
hani
sms
Pac
king
Mat
eria
l
Rub
ber
Com
pone
nts
0
200
400
600
800
1000
1200
975
750650
420 375 345 324220
140 95 85 70 45 30
Item Group
Pu
rch
as
e
va
lue
0
9-1
0
(cr)
65%
25%Conversion Cost
Material Cost
5%Transport & Packing Cost
25%
60%
5% 5% RM Cost Reduction Initiative
Co
st E
lem
en
ts
Renegotiation with existing vendor Global Sourcing Bulk Buying Alternate Vendors Subcontracting Tracking Trends Of Major Raw
Material Establish Best RM Benchmarks
Projection For “Q4”- (2010-11) Based On Previous Sales
Category(Sales Lacs)
2006-07 2007-08 2008-20092010-11
Projected Actual till Q3 Targeted for Q4
Pulsar 2 3.8 6 10 6 4
Discover 1.1 1.9 3 5 3 2
Platina 0.85 1.5 2.4 4 2.2 1.8
Avenger 0.2 0.35 0.7 1 0.6 0.4
Avenger
135 150 180 100 150 100 125 220
SP In (Rs) Till Q3 55000 62000 68000 48000 52000 44000 48000 82000
3% Discounted SP For Q4 (Rs) 53350 60140 65960 46560 50440 42680 46560 79540
Pulsar PlatinaDiscover
Model
Sales Initiatives: Sales target is not achieved till Q3 end, product discount of 3% to be given across all models. New sales & promotion schemes on Group Booking. This discounted price will be covered through 5% RM Cost Reduction initiative. Also discounted sales price will lead to increased sales volume which will help to achieve target sales.
Selling Price for in Q4 will be as follows:
Financial Projections:
Val (Cr) % Val (Cr) % Val (Cr) %
Sales 5600 0 8700 0 11400
Material Cost 3,360 60% 4,524 52% 6,270 55%
Value Added 168 3% 435 5% 456 4%
Manpower Labour 112 2% 435 5% 627 6%
Manpower Management 56 1% 174 2% 182 2%
Total Manpower 168 3% 609 7% 912 8%
One time cost 280 5% 261 3% 143 1%
Other Mnf Cost 56 1% 131 2% 114 1%
Mrktg Cost 112 2% 218 3% 336 3%
Total Other Costs 56 1% 109 1% 131 1%
Contribution 280 5% 522 6% 114 1%
I nterest 112 2% 218 3% 314 3%
Overheads 112 2% 218 3% 342 3%
Profit 896 16% 1,457 17% 2,269 20%
2008- 09 2009- 10 2010- 11Budget 2010- 11
Sales Target for FY 2010-11 - Rs.11400 Cr with business growth of around 24% Estimated Profit – Rs.2269 Cr (20% of annual sales)
Budget – Realistic estimate of gains & expenses done for specific period with help of historical data.
__________________________________________________________
Develop Monthly Reports
Review with Team Meeting with Functional Manager
Continue Monitoring
How Budgets are Monitored
Nilesh to Update – Add Some Notes/ Comments
Reporting Templates
Screenshots______________________________________________________________
Thank you…..