Order Line Prof Presentation
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Transcript of Order Line Prof Presentation
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SAM Extraordinary results through attention to work and people
SAM Consulting Group AGG.Cinciripini
21/9/2008
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3 Primary Principles - 1
• The universe is a constantly evolving system that operates according to very few Principles
• Same for human organizations such as the new global businesses
• 3 Primary Principles
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3 Primary Principles - 2
• SELF ORGANIZATIONmeans that everything in the universe
has the power to sustain its own unique identity
• INTERDIPEDENCYit’s possible for anyone entity in nature
to use all the energy … but the nature limits on growth; everything in the universe interrelates with everything else
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3 Primary Principles – 3
• DIVERSITYNewness continually arises from the
constant interactions of unique entities, it occurs because everything is related to everything else, and relationships among self organizing entities generate diversity
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MBM the 3 stems
• Knowledge (creation) is a cornerstone of what makes any organization successful
• organizations are interdependent with larger natural and social systems
• MBM = how work is organized must be guided by principles of living systems
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a lesson by Anders Broems
• to survive and prosper in the long run requires a business to follow practices that adhere to those principles
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SAM Offer
Produce to OrderDemand driven
Supply/Production/Distribution
Design to OrderModularisation and
Demand driven design
Assess to OrderOrder-line profitability
Analysis PractiseTheory
Continuous Improvement
&Flow principles
Modularisationprinciples
Technicalcommonality
Activity and cost analysis
Profitabilityforums
Modulartraining programmes
Leadership andtraining programmes
Level of awareness- “Litmus test”
Order-linecosting
Build to Order Services
… where customer and product meet.
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Management model
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ABC Activity Based CostingOrder Line Profitability Analysis Tool
• No net linear connection LINK organization’s profitability with costs and revenue
• Accounting info can measure and keep track of results BUT no insight into the particular inner relationship that determine those results
• Managers are more interested to a non-accounting system that can focus on the organic union between customer and company
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ABC Activity Based CostingOrder Line Profitability Analysis Tool
• Managers will be able to “assess to order” with such non accounting financial information when they adopt a tool known as ORDERLINE PROFITABILITY ANALYSIS
• Orderline profitability data visibly connects the earning of profit with the conditions that exist where the customer’s needs and company’s costs come together in a natural union
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Profit
(+)
(-)
100%
“Banana”-curve
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Creating profittablity modells
Two basic approachs
Create analysis model based on a software package
Create software solution based on the analysis model
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The Order-line, a unique costing object
Customer
Customer Segment
Geography
MarketProduct
Product Group
Raw materialor components
Related productsVolumes
Buying frequency
RebatesLead times
Sales channel
Suppliers
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Resource analysis
Research and development SalesManufacturing
Volume
Structure
Newness
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Navigate to higher profitability
PRODUCT
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Material
Material
Transfer price
Revenue
Productionunit
HQ & Centralfunctions
Salescompany
Verticalview
Volume
Structure
Newness
Material
Material
Vertical results give transparency
Transfer price
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Profit Mapping – 1
-0,8
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-3,0 -2,0 -1,0 0,0 1,0 2,0 3,0
Overall Customer result(MUSD)
Combination result (MUSD)
+/++/-
-/- -/+
Product axis
Customer axis
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Order line profitability Map - 2
• the customers in Q4 are all to be ‘dropped’ ?!– each point contains all detailed
non-accounting information, like: • revenue, gross margin• administration and sales costs• logistic costs
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Order line profitability Map - 3
• e.g. the mapping is done for auditing of one customer:
• the tool supports to view the conditions to increase the total profitability via the less profitable product handling, the terms of payments, the terms of delivery, etc.
• the analysis is a valuable tool to plan – proactively – the relationship with customers
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Order line profitability Map - 4
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Structural indexes ( in case of modular production ) - the link between structural complexity and costing
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Unique to a few variants
Common to all variants
Technical commonality
TCC = 0,28
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Sold product volume
Most frequently sold products
Least soldproducts
Articles in use
CCC = 0,12
Commercial commonality
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Profitablity learning
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Data flow
Analysismodel
(ana-tool)
Calculationmodel
(clc-tool)
Datacapture
(SQL or Access)
Accounting informationcost centres, accounts, cost, etc
Product, customer andorder-line information
Resultanalysis(SQL, Access or QlikView)
Standard reports
In-depth result analysis
Pricing
Comparison estimatedversus actual
Sales patterns
Quality gate
Quality gate
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A Chemical Company : Operational outcome 2004
Waterfall 2004 figures
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Sales Mtrl andProduction
Marketing andDistribution
R&D Administration Other expenses Profit
MC
HF
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