Powerpoint presentation on American Tool Work

1. American Tool Work
Instructor: Prof. Theo Rigopoulos
Presented by: Akash Tangade

2. Agenda
O Introduction about ATW
O Executive summary of ATW
O Challenges for ATW
O Recommendations
O Timeline Action plan
O Conclusion
O Reference

3. Introduction
o American Tool Work(ATW) is a leading U.S.
based manufacturer of high quality power and
hand tools, like electric drills, hammers etc.
o ATW has its manufacturing facilities all over the
world
o The company’s main market are in Europe and
North America
o The company sell their products through number
of distributors and dealers or directly to home
owners and tradesman

4. o ATW have a strong and successful relationship
with its distributors and dealers having 80% of
revenue from them
o There are 2 forms of distributors large, small
and midsize

5. Executive summary of ATW
o ATW deals with the large, small and midsize
distributors
o Large distributors are managed by the company
through Vendor Managed Inventory(VMI)
o Small and Midsize distributors are not managed
by VMI because they do not have the technical
capability to participate in the VMI relationship
o Various challenges faced by the small and
midsize distributors

6. o Recommendations and action plan for the
challenges will be described in the ppt further

7. Challenges
o What can ATW do to increase inventory at small
and midsize dealers?
o What can ATW do to increase sales at small
and midsize dealers?

8. What can ATW do to increase
inventory at small and midsize
dealers?
o To increase the inventory, small and midsize
dealers can do the following:
o Accurate forecasting: Improving forecasting is
necessary because it will help ATW to give an
idea about when to stock and how much to
stock the products depending on the sales

9. o First-In-First-Out(FIFO): Sell the stock from the
inventory in the same order in which it was
created instead of pilling up the inventory
o Buy-Back contract: The seller agrees to refund a
partial amount to the buyer for all the unsold
products. This will hep the buyer getting rid of
the unused inventory due to less loss resulting in
new and increased inventory

10. What can ATW do to increase
sales at small and midsize
dealers?
O To increase the sales at small and midsize
dealers ATW can do the following:
O Customer satisfaction: This is very important
thing to consider because customer should
have on time delivery of ATW products also
they should get proper customer service from
the dealers, doing so will result in increased in
sales of ATW products

11. o Revenue-sharing: Buyer shares the revenue
from the sold products with the supplier in return
for discount wholesale price. This help motivate
the buyer in getting rid of all the ordered goods
thus resulting in increased sales
o Group discounts: ATW can give group discounts
on buying of 2-3 products at the same time
which help in getting rid of the inventory and
increased profits
o Sales Rebate contract: This will motivate the
buyers to sell ATW products because the
company will provide certain incentive if they buy
or sell above a certain quantity

12. Time Line Action Plan
o 1st week: As ATW is facing problems in increasing
their inventory and sales, they should have a
meeting with all the department heads on a weekly
basis and try working on finding a solution for the
problem
o 3rd 4th week: ATW should try meeting their dealers
and discuss with them all the problems occurring in
the sales and inventory levels. To solve the problem
they should discuss the sales rebate contract,
revenue haring contract with the dealers give
discounts on the products etc. which help solve the
probems

13. o 5th & 6th week: For forecasting issues ATW
should contact their sales team and dealers and
try to get accurate data of the forecast, they
should also get rid of the dead stock by
implementing buy back contract with dealers,
First In First Out
o After week 6: if they are not getting the problem
solved they should mistake proof it

14. Conclusion
o As ATW was facing problems in increasing the
sales and inventory levels at their small and
midsize dealers, in order to improve the
inventory they should keep a check on their
inventory levels, improve their forecasting
techniques, clean all the dead stock first by
having a buy back contract, revenue sharing
contract with their dealers. For increasing the
sales the company should give group discounts,
have revenue sharing and sales rebate contract
with the dealers.

15. Reference
o Simchi-Levi, D., Kaminsky, P., & Simchi-Levi, E.
(2000). Designing and managing the supply
chain. Concepts, strategies, and case studies,
2