Business Operations

Executive summary

Business Operations

Business Operations in the most native sense can be thought of as the heartbeat of any successful organization. In other words, it is the implementation of one’s stated Business Strategy or Business Model. One can also look at it as the interconnecting highway that allows various parts of the organization to co-depend on one another to be successful. Sales cannot be successful without the operations team to ensure top quality products. Operations cannot be successful without feedback from the marketing team on the perceived quality of the product or services. And Operations team cannot continue to operate without the finance team ensuring timely cashflow. And so in its most basic element, one can look at Business Operations as the management of the relationship between the cost of goods sold and the revenue generated from their sale. We have all heard stories of the once upon a time giants of the industry that suddenly woke up one day and realized they were no longer relevant and realized they had ignored the signs until it is too late. We also have many lesser known stories of the small companies that had a great offering, but didn’t understand how to navigate the market dynamics properly and ended up going bankrupt. The common denominator is that each became too comfortable operating as is and then waiting till it was too late to make the necessary changes to survive.

But before one can make the necessary improvement to any particular area, one must understand where they currently are. To do this, one can utilize a 5-level process maturity continuum that goes as follows: Level 1: Initial (Chaotic, Adhoc) – This is generally an undocumented, reactive process that usually mainly seeks to stoke the largest fires; Level 2: Repeatable – This is a more developed, yet still most reactive process that has shown levels of repeated success and so therefore as long as the change agent is still present within the company, it can still be utilized; Level 3: Defined – This is the stage where the process is documented and understood as the standard of operations though mostly static with updates done on a fairly low degree over time; Level 4: Managed – This is the stage management can effectively manage current AS-IS process. They then can introduce feedback loop mechanisms that allow for timely process improvement, without material degradation of the process; Level 5: Optimization – At this state, process performance is optimal and the further improvement is only achievable via innovative technological interventions. No matter what part of the organization one is dealing with, this metric system can always act as a compass to ensure continuous growth and improvement.

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Service Methodology

While undertaking a process improvement initiative it’s important to utilize a methodology. In order to ensure a successful outcome, I follow the below 6 steps: 1. Define The Problem – A mutual understanding of the scope of the problem is essential being that this will help set the tone for which department(s) within the organization would be essential in helping to eventual help resolve the issue(s). This would could involve either one or more of the following toolsets: brainstorming sessions, ideation workshops, interviewing of key stakeholders and questionnaires. The data points collected in this exercise will help to either further enhance the proper identification of the problem; 2. Determine the Root Cause(s) of the Problem – Once the symptom(s) has been identified, and a tentative definition of the problem has been achieved, then the next step would be to see which (internal/external) (departments/agents) control each identified symptom so as to make sure if they are also required in Step 1, a parallel effort to include them in the problem definition takes place; 3. Identify Multiple Solution Options – In this step a creative problem solving exercise takes place to generate a number of potential solutions, while making sure they relate to the identified problem so as to ensure continuous focus on identified topic; 4. Select a Solution – In this process, the identified solution(s) are then analyzed for strength’s and weakness and then ranked. Then a “feasibility” test is then deployed looking at the following factors: Can it be implemented in an acceptable time frame; Can it be implemented within stated budget boundaries; How reliable is this solution; Will there be an efficient utilization of system and resources; Is it flexible enough in a potential ever changing environment.

Once it passes the above test, then the next step would be to identify if the solution(s) are technically feasible in the current environment, and if the respective change agents that will implement this find it acceptable. To test its acceptability, below is the methodology: Would the implementers support the solution and consider it an appropriate utilization of their time and energy; Are the risks manageable; Will the solution benefit the intended audience; Would it benefit the organization; 5. Implement the Solution – Once a solution is identified, the following must take place: What must be done and who will implement it; What will be the start date and key milestones to monitor; What actions will be carried out and why are they considered essential checkpoints to the viability of the solution; 6. Evaluate the Outcome: This is where the question “Did this resolve and address the identified problem statement” gets answered. Once this is identified as an agreed upon solution, the next and equally important step would be to introduce a feedback loop that ensures continuous improvement overtime and eliminate the potential of the solution becoming irrelevant at a future date, or at least trigger a review of the implemented solution when necessary.

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Service Options

Companies can elect whether they just require Appleton Greene for advice and support with the Bronze Client Service, for research and performance analysis with the Silver Client Service, for facilitating departmental workshops with the Gold Client Service, or for complete process planning, development, implementation, management and review, with the Platinum Client Service. Ultimately, there is a service to suit every situation and every budget and clients can elect to either upgrade or downgrade from one service to another as and when required, providing complete flexibility in order to ensure that the right level of support is available over a sustainable period of time, enabling the organization to compensate for any prescriptive or emergent changes relating to: Customer Service; E-business; Finance; Globalization; Human Resources; Information Technology; Legal; Management; Marketing; or Production.

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Service Mission

The Business Operations Strategy objective is to insure proper alignment between a client’s stated strategy and its various internal departments to ensure optimal success. This objective is achieved by enlisting Senior Consultant (Mr Ashade) to engage with identified key stakeholders to help ensure success of implemented solutions drawing upon his vast array of experience in various departments within the organization such as Sales, Corporate Planning, Finance, and Operations, understanding how they operate and relate to one another. Benefits that could be enjoyed by the client are as listed, but not limited to: improved ROI (Return on Investment), reduced TCO (total cost of ownership), introduction of change management where necessary, continuous process improvement, and a periodical CSAT (Customer SATisfaction) assessment to ensure continuous feedback on acceptability of proposals.

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Service objectives

The following list represents the Key Service Objectives (KSO) for the Appleton Greene Business Operations service.

1. Data Gathering
   Data Gathering is the portion of the engagement where a review of the following takes place while making for adjustments for whether the client provides service or products to it’s customers: 1) Forecasting Review – a combination of the clients Market Demand Forecasting, New Product Forecasting Process and Promotional Product Forecasting is done to see how the aggregated consensus demand forecasting is derived; 2)Production Scheduling – A review of this process is done see how close to a JIT (Just In Time) process is in place and the gap that could be further closed; 3) Evaluate Supply Side constraints and how they affect production and inventory planning; 4) Inventory Optimization – a review of the as-is inventory management process and how greater transparency can lead to a more cost effective interaction between Supply Chain, Production/Delivery Group and Vendors; 5)Customer Service Level Results – review the current feedback from customers to see what internal problems are visible to the client and how to strategize around improving that so as to improve upon one’s mindshare within the customer’s ecosystem.
2. Sales Planning
   A review of the Sales Planning cycle is done and can be divided into 5 components: 1) Historical Sales Forecasting vs Historical Sales Performance: Is there a huge gap between Best Estimate (BE) at the beginning of the year and the realized revenue? How often is the BE adjusted and what constitutes the calculation of this; 2) Sales Plan Development Review: Is the Sales forecast done via a Top Down Approach, Bottom Up Approach or a hybrid. And how are these both balanced so as to result in more accurate forecasting; 3) Essential Partnership: A review of the partnership and level of interaction/input between the following group is done (Finance, Marketing, Sales, Product Development and HR). The more interactive the partners are, the easier it is to achieve business objectives; 4) Structural Plan Elements would be unique to each client, with a review of the following: Product/Service Mix, Channel of Sales (Direct Sales, Re-sellers, multi-tier distribution, retail, online, VAR (value added resellers), Customer Status Review (Sales to New Customers, Sales to Existing Customers and Customer Retention Rate), Market Segments (Industry Verticals vs Service Line Horizontals), Account Segmenting (Global, National, Basic Accounts), Geographic Position (North America, MENA, SSA, APAC, Europe, Russia, Latin America); 5) Action Test: Looking at the ability of the sales personnel to utilize the current sales plan to deliver.
3. Supply-Chain Planning
   In order to access the health of one’s current status, a review of the company’s ability to adopt the 5 items listed should be done: 1) Ability to move to real-time supply chain planning; 2) Linking Supply Chain Planning and Enterprise (S&OP and Finance) Planning; 3) Improved anticipation to end customer demand; 4) Leveraging multiple real-time data points to improve supply chain process; 5) Access flexibility to adapt to potential disruptions in Supply Chain and how to mitigate those risks.
4. Partner Meeting
   This is where mechanisms are introduced to help break down silos that exists within various departments in the company (Manufacturing, Purchasing, Sales, Finance, HR, Marketing, Marketing). A review with the stakeholders would take place in regards to some of the current positive inter-planning occurring and some of the improvements that could take place to help make things better.
5. Executive Meeting
   An executive summary is provided to the top decision maker, highlighting the key discussion points and issues brought up in the Partnership meeting. The recommended plan is then reviewed and the strategy on the implementation of it.

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Acievements

Infosys

While at Infosys there were 2 major initiatives that I championed that would be of great benefit to other clients. One was implementing a system that would help reduce our DSO (Days of Sales Outstanding). A key factor in this was change management which was to remodel our internal system and team structure while also working with the client and advising them on how to help us to become jointly aligned. Due to this, I was able to reduce our DSO which ranged from 65-120 days on a quarterly basis to approximately 45 days. This of course greatly improved our cash flow for a $100M+ Book of Business in our practice. I then was tasked with evangelizing this to our other practices to help with their DSO Improvements as well. The second Initiative was to help with our practice’s overall Account Management and Operations structure. This involved improving sales forecasting (Went from a 15% delta in pre-quarter forecast vs end of quarter booked business to less than 5%), Also due to improved Account Planning, was able to help grow a key account from $0 to $25M per year over a 2-year period and won an Account Management Award for this in 2013-2014 (Awarded to the top 5 out of 8,000 sales professionals company-wide). Was also able to improve our hiring practice which improved our net revenue loss of $5M per quarter due to not being able to staff client engagements to less than $1M per quarter. This was a 80% improvement that resulted in a net gain of $16M per year to our top line.

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Siemens

Annual Revenue at one of the manufacturing plants was approximately $170M per year. However, warranty costs (this was the cost associated with addressing post sale quality issues of the product) were historically 3% of annual revenue. I was tasked with reducing this line item by 30% for the year. I was able to get this reduced to 1.3% of annual revenue which equated to a 58% improvement, or almost double the initial goal.

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Delphi Automotive Systems

While at Delphi I was able to help with 2 key Improvements. The first was to help reduce cycle time. To give further details on this, typically in an automotive plant, you would have an assembly line where multiple parts are put together to provide a final assembled product. For this particular plant it was the assembly of the vehicle electronic control. During this process heat is involved and as you can imagine, trying to utilize water to cool down an electronic device was not an option. And with this being a 24/7 operated plant, the bottle neck of the operation was to wait for a welded piece to cool down so as to continue completion of assembled control. I therefore created a device that would now force cold air unto the product and more importantly that could be unmanned (the previous method involved someone having to manually utilize an air hose to cool the device). The introduction of this allowed an FTE reduction of 1 person across 3 shifts which resulted in an annual savings of over $100K per year. Also while at Delphi, I spearheaded our lab getting accredited under A2LA (American Associate for Lab Accreditation). This allowed our lab to go from being purely a cost center, to now being a profit center since it could now perform Transient Immunity Testing for the Big 3 Automakers (GM, Ford and Chrysler). This was also part of my thesis as well. This allowed us to now generate $4M per year in new revenue based upon the accreditation.

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Yum Brands

In 2008, I worked with Pizza Hut’s CFO team to do a SWOT (Strength, Weakness, Opportunities and Threats) analysis of the Quick Service Restaurant Industry Leaders historical and go forward strategies and based on this was able to provide insights into how to enhance their current market positioning. I then did a review of their 3 year go forward strategy to look into how to better position themselves competitively and take advantage of upcoming trends. Based upon this, was able to recommend multiple initiatives, including increasing their offering of healthier choices due to the new trend of improved dieting as well as utilizing this as a differentiator. In addition to this, also advised them to introduce breakfast offering via Taco Bell, to increase their revenue per store without additional infrastructure investment while cutting into the breakfast market share of their competitors (McDonalds and Burger King). And as we can now see this has now been implemented and quite successful.

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More detailed achievements, references and testimonials are confidentially available to clients upon request.

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Industries

This service is primarily available to the following industry sectors:

Energy

The Energy is constantly evolving. Over time as industries have evolved, the amount of energy and more importantly the mix of industry has constantly evolved as well. But this is where we need to collectively understand the complex dynamics shaping up in the world today in order to better project the future. On one hand, between now and 2050, the world’s population is expected to increase by 36% to 10 billion, and the world’s GDP is expected double. While on the surface that would imply that energy demand will continue to project upwards, that could be misleading and here is why. Much of the growth in the population will be from longer life expectancy which will in turn increase the unemployment figures, and place a strain on GDP growth. Also the more powerful growth engine for GDP will be the increased dependency on the service based economy as opposed to the manufacturing based economy. And as technology and process improvement on both demand and supply side increases, the resulting energy efficiency by prod