1 © The Delos Partnership 2004 Delos Top Management Course Doubling profitability

2 © The Delos Partnership 2004 Delos ROCE model ROCE Profit Capital Sales Costs Material Labour Overhead Fixed Current Stocks Creditors Debtors Projects SHORT TERM LONGTERM

3 © The Delos Partnership 2004 Delos ROCE model ROCE Profit Capital Sales Costs Material Labour Overhead Fixed Current Stocks Creditors Debtors Projects PLANNING IMPROVEMENTS

4 © The Delos Partnership 2004 Planning Improvements Improve Forecast Accuracy Manage to Proven demonstrated and not theoretical Capacity Improve quality of data –Stock, BOM’s, Routings Effective Demand Management process Control changes to plan Plan the Work; Work the plan Manufacture to a valid priority planning process –Not those that shout loudest to expedite AIM Gain control Meet promise dates No past dues AIM Gain control Meet promise dates No past dues

5 © The Delos Partnership 2004 Delos ROCE model ROCE Profit Capital Sales Costs Material Labour Overhead Fixed Current Stocks Creditors Debtors Projects LEAN/AGILE IMPROVMENTS

6 © The Delos Partnership 2004 Agile/Lean Improvements Velocity Improvement –Set up Time Reduction –Quality improvements Reduced Product range Kanban introduction 5 S’s Housekeeping Fewer parts Fewer Suppliers Design for Manufacture Apply to all activities AIM Make any product, any time Reduce waste and time Increase flexibility AIM Make any product, any time Reduce waste and time Increase flexibility

7 © The Delos Partnership 2004 Six Sigma Quality Improvements 3.4 parts per million Quality is in the process and Not in the product Root cause analysis not Inspection Statistical process control Not statistical sampling An attitude not a function AIM No compromise on quality Root Cause Analysis approach Eliminate the errors AIM No compromise on quality Root Cause Analysis approach Eliminate the errors

8 © The Delos Partnership 2004 Combine the ideas Customer Lean/Agile Six Sigma Planning Processes

9 © The Delos Partnership 2004 Delos ROCE model ROCE Profit Capital Sales Costs Material Labour Overhead Fixed Current Stocks Creditors Debtors Projects CUSTOMER RELATIONSHIP MANAGEMENT

10 © The Delos Partnership 2004 Customer Relationship Management Developing different channels to market Create a hassle free experience Anticipate their needs Create customer teams Manage their planning and inventory processes Make everyone customer aware AIM Bind the customer to you Reduce the hassle Anticipate the need AIM Bind the customer to you Reduce the hassle Anticipate the need

11 © The Delos Partnership 2004 Delos ROCE model ROCE Profit Capital Sales Costs Material Labour Overhead Fixed Current Stocks Creditors Debtors Projects SUPPLIER RELATIONSHIP MANAGEMENT

12 © The Delos Partnership 2004 Supplier Relationship Management Create strategic relationships Create reliability Remove non value adding activities Focus on strategy not placing orders Minimise your inventory Bind them into you AIM Bind the supplier to you Reduce the hassle Create value not manage price AIM Bind the supplier to you Reduce the hassle Create value not manage price

13 © The Delos Partnership 2004 Barriers to this thinking Overhead Recovery Efficiency means lower cost Buying in large quantities lowers total cost Short term response to shareholder targets Year end/Quarter End Panic “What would you like the profit to be” TRADITIONAL PERFORMANCE MEASURES

14 © The Delos Partnership 2004 Delos Business Model DemandDemandSupplySupply VisionVision PrioritisationPrioritisation SupportSupport InnovationInnovation StrategyStrategy

15 © The Delos Partnership 2004 Delos Approach Focus on ROCE Apply the right techniques for the right result Operational improvements deliver ROCE Planning gains control Lean and agile improves Six Sigma improves quality Unique competitive position is the result People not systems

16 © The Delos Partnership 2004 Delos Delta Model OVERCOMINGOBSTACLESOVERCOMINGOBSTACLES DELIVERSDELIVERS INTEGRATEDINTEGRATED ManagingThechangesManagingThechanges ROCEModelROCEModel BusinessModelBusinessModel ChangeModelChangeModel

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18 © The Delos Partnership 2004