1. Overview
and Example
Case Studies
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2. About Principia21
A principled approach
We offer high-value solutions to complex issues and problems.
We help companies improve with a tenacious pursuit of value,
with clarity of purpose and communications.
Who we work with
Our clients are typically straightforward, ambitious business
leaders. They are not satisfied with the status quo, and do not
tolerate excuses. They believe in setting quantifiable goals, and
measuring incremental progress towards those goals.
What we do
Principia21 is a firm focused on helping management see through
complex issues to improve overall operations effectiveness, to
drive performance and profitability improvement.
Value Proposition
We combine world-class thought leadership and execution, with
an emphasis on immediate impact and value creation
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3. Key Service Areas and
Principles we use to drive success:
Service Area Key principles Main Services
Strategic Planning  It is critical to understand key  Development of strategic
assumptions, and the associated plans
implications on alternative scenarios.
 Ensuring tight linkage of
 Must have common data definitions strategic plans, budgets,
and ability to stratify and aggregate assumptions and
plans to assess quality and get buy-in. performance goals
 Financial planning & analysis
Operations Effectiveness  As in sports or any activity, effective  Assessing operational
execution of the fundamentals effectiveness; Changing &
Business Process Design generally is what separates the aligning policies, processes,
winners from the losers. people & technology
Change Management
 Policies drive processes; both of these  Developing key operational
must be aligned to achieve metrics and clearly
organizational goals. articulating the implications
and required actions
 Focus on end-to-end processes.
 Designing & implementing
end-to-end-processes
Supply Chain  Supply chain is all about effective  Working Capital Mgmt.
planning; in order to plan effectively,
an organization must understand  Strategic Supply Chain
accurately what it buys and sells, Network Design
along many different dimensions,  Strategic Sourcing
(e.g., Time, Customer Segment,
Geography, Product Segment,  Planning and Forecasting
Revenue Type, etc.)
Information Technology  How tools (packages) are used and  IT Strategy and Planning
implemented is much more important
than which tool is used.  ERP Selection through
Optimization
 Data definitions and quality are critical
to success, and should not be  Data architectures and
overlooked (but generally are). extracting data for analysis.
Program and project  As Newton said: “Work = Force *  Initiative definition and
Distance”: It is not about how much planning
management effort (force) is expended; Work is only
performed if the boulder (issue) your  Program management and
trying to address moves in the reporting
intended direction.  Merger / Acquisition
 “Management” (verb) is dealing with integration planning
all the unforeseen events and through execution
ensuring projects and plans are
adjusted accordingly without affecting
overall project quality, scope or timing.
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4. Case Study:
Merger Integration
We helped a new automotive supplier quickly develop stand-alone Finance,
Purchasing and Information Technology capabilities and processes, after
being divested from the former parent’s centralized systems and processing
infrastructure.
Client: A new automotive supplier, formed when a private partnership
purchased a manufacturing plant from a major Tier-1 automotive
supplier.
Situation: A new company was formed to purchase a 50 year-old stamping plant
from a global Tier-1 automotive supplier. All information systems,
purchasing, accounts payable and accounts receivable process and
capabilities were previously performed by the parent’s shared services
organizations. We helped the newly-formed company develop their
own systems, processes and infrastructure, and managed the
transition away from the former corporate parent.
Our Role: We assisted with the due-diligence effort prior to completing the
purchase transaction, and developed a high-level plan and budget for
enabling a stand-alone finance, IT and purchasing functions.
Immediately upon transaction close, we assumed responsibility for
managing the de-integration effort, which was completed within six
months.
Key elements of the de-integration effort included:
• Implementing new systems for Financials, Manufacturing,
Sales and Purchasing
• Implemented new Payroll Processing systems and processes
• Managed the seamless transition of all EDI processing
• Upgraded and established required network and
communications infrastructure
• Hired full-time staff, trained and transitioned responsibilities
to them
Results: Our client successfully transitioned to their own IT, Purchasing,
Accounts Receivable, Accounts Payable, Accounting, H/R and Payroll
capabilities within six months of becoming a stand-alone company,
within the budgets defined as part of the original transaction budget.
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5. Case Study:
Joint Venture Start-up
We helped a new forklift joint venture develop an overall
business vision and IT strategy, including the development and
transition to an independent IT capability.
Client: Mitsubishi Heavy Industries and Caterpillar, Inc. formed Mitsubishi
Caterpillar Forklift (MCF), a joint venture company which manufactures
and distributes forklifts and associated service parts throughout the
world. MCF was formed to take combine Caterpillar's strong dealer
network and knowledge of the U.S. and European markets, and their
impressive Product Support capabilities, with Mitsubishi's low cost,
reliable truck designs and manufacturing facilities.
Situation: The challenges of maintaining market share and improving margins in
a mature market were only part of MCF's difficulties. The joint venture
also faced the task of merging two distinctly different companies, with
vastly different operating philosophies and cultures, into one cohesive
organization.
Our Role: We structured and developed an overall business vision and
information systems strategy for the new joint venture. The strategy
consisted of two main components:
1. A Start-up strategy defining how business would be conducted
in the months immediately following the formation of the joint
venture
2. A Long-term business vision and information systems strategy to
achieve a strong competitive capability, as well as independence
from both corporate parents.
Results: We assisted MCF on a world-wide basis in implementing the strategic
portions of their information strategy, including:
• Establishment of a new data center in Houston
• Definition and creation of an IT support organization
• Development of new lift truck order processing, scheduling and
distribution business processes and systems
• Development of service parts distribution business processes and
systems
• Development of warranty business processes and systems
• Application maintenance and support for all production systems
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6. Case Study:
Customer Engagement
We helped a professional services firm improve their win rates
on proposals, by helping them develop end-to-end processes to
significantly better understand customer requirements and key
attributes of how customers perceive value.
Client: An IT services firm, engaged in .managing long-term, complex
contracts for their clients.
Situation: The company was faced with consistently decreasing win rates over a
series of quarters on the proposals they developed and issued to
customers ( contract renewals) and potential new customers.
Our Role: We developed a fact base of all their proposals over the prior year, and
did “deep dive” analysis and interviews on a subset of these. We
developed the overall recommendations for addressing the current
issues, and implementing processes for a sustainable improvement.
Key elements of the revised processes included:
1. Defining and capturing key attributes of the customer and
proposal environments
2. Defined process stages, responsibilities & accountabilities (e.g.,
Prospecting, Proposal Development, Negotiate / Close, Pipeline
Mgmt.), and associated performance measures and performance
targets.
3. A structured and integrated planning approach, using a
common structure for the Sales and Delivery plans, with specific
targets by Industry Vertical, Technical and Process Domain
Expertise and Geography.
Results: Our client was able to use the combination of data captured and
standardized processes to not only significantly improve their proposal
win rates, they understood their current “sweet spot”, and define
desired (“to be”) sweet spot. This has enabled them to develop a
portfolio of Solution Offerings that can be mixed-and-matched along
key factors of customer requirements delivering value according to
what the customer is willing to pay for.
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7. Case Study:
Strategic Supply Chain Design
A mid-sized consumer products manufacturer selling to major
big-box retailers needed to put in place a supply chain
infrastructure to support significant growth, while maintaining
an expense structure consistent with current revenues.
Client: A consumer packaged goods manufacturer, selling to major “big box”
retailers.
Situation: The client was facing four major challenges:
• Trying to transition from a family-run, regional business to a
professionally-managed national business
• Top four customers represented approximately 92 percent of
annual revenues
• Needed to support upcoming launch of a new product line with
appropriate manufacturing and distribution capabilities
• Desired a supply chain infrastructure to support significant
growth, while maintaining an expense structure consistent with
current revenues
Our Role: Together with company management, and input from customers and
suppliers, developed several strategic alternatives. Used the Strategic
Supply Chain Planner to analyze the impact of each, to support the
prioritization and decision making process among the alternatives.
Results: Identified a supply chain network which reduced the number of
manufacturing plants from four to three, reduced the number of
independent distribution centers from five to two, while at the same
time improving ability to service customers within two days from 92%
to 96%.
Total supply chain
costs as a percentage
of revenue were
reduced from 26% to
22%, thereby
improving realized
margins by 4
percentage points.
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8. Case Study:
Strategic Sourcing
We assisted a major financial services firm understand their
buying habits across business units and decrease their overall
spending by increasing their sourcing coordination between
business units.
Client: A major financial services firm.
Situation: The client had three primary business units, and was seeking to lower
overall costs by improving leverage and purchasing habits across
business units
Our Role: We undertook an initial analysis and opportunity scoping project to
determine the opportunities available within only the IT spend categories
of the firm.
During the initial analysis, we
•Created an IT spend fact base to bound and size the opportunity
•Identified challenges and profiled example opportunities
•Identified key opportunity areas for each business unit and across
business units
In the second phase of work, we led the initial sourcing pilot teams to
achieve identified savings.
Results: We created the first comprehensive fact base of total IT spending, and
identified recurring spending opportunities of $7-15 MM on a total IT
spend base of approximately $880 MM. Strategic Sourcing: Category savings Financial Services Industry Example
Our approach can surface the opportunities for total cost reduction in many categories of an organization’s
purchase portfolio.
The initial sourcing team
we led, which focused on Strategic Sourcing of Personal Computing
consolidating vendors and
100 pts Buy for Less
Maintenance 6% Buy Better
Supplies, Other 13
simplifying the
• Volume leverage across 8% Consume Better
PC Software 9 all business units
5+% < 81 pts
• Reduced number of • Optimize mix of lease
configurations
number of configurations
IT Support 21 and buy • Tiered levels of standard
• Consolidation of suppliers • Lower maintenance units across enterprise
costs/integrated program • Upgrade asset
Other 15 • Ongoing volume management controls
for only PC and Hardware
communication to supplier
• Process standardization
(e.g., internal requisitioning/
• Software
standardization;
associated hardware
workstations, resulted in
Personally ordering; software loading) specification alignment
Assigned 42
Hardware • Peripheral policies • Cascading usage of
equipment
first year savings of Status Quo Total Costs
$2.2MM, on a base spend after
Strategic
Sourcing
of $62.9MM (3.5% annual
savings). Dabraad Associates 31
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9. Case Study:
Working Capital Performance
We helped a specialty chemical manufacturer significantly
reduce finished goods inventory, and put in place processes to
maintain the lower levels.
Client: A private held manufacturer and distributor of specialty chemicals and
maintenance products.
Situation: The company had experienced rapid growth, due to the success of
several of their recent product introductions. Accompanying the sales
growth was a significant increase in finished goods inventory.
Our Role: Using detailed analysis to segment current inventories based on
functionality, we determined that over half was excess safety stock
and/or obsolete. By evaluating the specific drivers of the current
inventories, several key opportunities were identified:
• Eliminate truly obsolete FG
• Produce to actual requirements
• Manage safety stocks based on current forecast accuracy and
service level targets, not “weeks of coverage
Results: Reduced finished goods inventories by 43%, representing an increase
in turns from an average of just over eight to approximately fifteen,
while increasing in-stock rates from 92% to 97%.
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10. Case Study:
Offshore Sourcing
We assisted a consumer products company selling giftware shift
their sourcing for nearly all their products to China to take
advantage of lower costs.
Client: A consumer goods manufacturer, selling giftware to specialty gift
retailers.
Situation: The client had developed an innovative new line of products, but was
having a hard time finding a source to make the product within their
target cost.
Our Role: Our team was able to quickly identify potential suppliers from
throughout Asia, and within two weeks held a series of face-to-face
meeting with potential suppliers in Taipei and Hong Kong. We
developed a supplier scoring spreadsheet addressing multiple
attributes along the dimensions of price, quality and lead-time, and
assisted with the evaluation of product samples, supplier selection and
contract negotiation.
Results: The client now has three qualified suppliers performing all their
manufacturing in China. Cost of goods, including inbound
transportation, was achieved at an average of 84% of the target cost.
Lead time was reduced from an average of 16 weeks to eight weeks.
In addition, the client reports that quality is significantly better in terms
of finish quality and surface detail, than achieved by their former
suppliers.
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11. About Craig B. DeLano
Craig B. DeLano serves as Managing Director of Principia21 LLC, an
Operations Strategy and Performance Improvement consulting firm,
allowing him to leverage his more than twenty-five years of diverse
experience, including both senior consulting and operations roles.
As a recognized authority on supply chain and information technology, he
has been quoted by the media and has published subject matter articles in
numerous magazines, including Journal of Commerce, Logistics!,
Purchasing and Supplier Selection and Management Report.
In previous roles, as Executive Director at Dell, he was responsible for
directing strategy for the Services business, and prior to that was Vice
President, Supply Chain, responsible for overall supply chain operations at
State Industrial Products, an industrial maintenance supplies manufacturer.
He has been a Partner at Oliver Wyman (formerly Mercer Management
Consulting) and started his career at Accenture, developing from a staff
consultant to Associate Partner. In addition, he founded a decorative
garden products company focused on design and distribution of innovative
giftware, Garden League™.
He holds a Bachelor of Science Degree in Industrial Engineering from
Purdue University, and is a Certified Public Accountant.
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