Building a Growing Enterprise / Organisation
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An ever growing Enterprise is every Entrepreneur's dream. The Organisation consists of many elements, which require regular review so that all Stakeholders are satisfied. The Presentations identifies various areas requiring close watch and suggests practices which can be implemented in the Enterprise for better profitability.
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Building a Growing Enterprise / Organisation
- 3. HOW TO KNOW WHETHER GROWING? 6 Stakeholder Growth Indicators Entrepreneur Awards, Payhike, Turning into Investor, Bigger Challenges, Operations from more Locations Employees Awards, Pay Hike, Global Positions, Settled Family Investor Wealth Appreciation, Timely Loan & Interest receipt, Better Dividend Vendor Better Capacity Utilisation, Regular Orders, Growth with the Enterprise’s Growth, No Payment Defaults Customer Better Life with Better Products, More Productivity, Lesser Dissatisfaction, Better Health, More Consumption Society Optimum Utilisation of Resources, Better Life of Citizens, Lesser Social Issues, Work for everybody Government Better Revenue Collection, More Resources for Govt. Schemes & Society Development 7 SITUATION FOR EVERYBODY 8 CHALLENGES BEFORE SMEs / CHALLENGES BEFORE SMEs / PRIMARY CONCERNSPRIMARY CONCERNS 9
- 10. IF YOU WANT TO RUN FERRARI , YOU WILL CREATE BEAUTIFUL ROADS YOUR ORGANISATION IS YOUR FERRARI. WHAT WE NEED TO CREATE SO THAT IT RUNS SMOOTHLY? 34 35 36 Visiting Cards Letter Heads Communications Work & Work & OrganisationOrganisation –– My First PriorityMy First Priority It Grows It Grows I also GrowI also Grow 37
- 11. 38 6. Process - Steps - Time 7. Special Instructions 39 40 What is Stopping the Flow ? 41
- 12. Measure Yourself For a Fit (Questions to Answer) • Does your company leadership team understand and embrace their role, and are they willing to learn what lean and Six Sigma are all about? • Does your company utilize cross‐functional, multilevel teams to get things done? • Have you mastered the basic problem‐solving tools throughout the company, driving to root‐cause corrective actions? • Do you have accurate data systems (gauge repeatability and reproducibility) that are easily accessible to the workers closest to the process, and does this data drive your improvement actions? Source: www.shmula.com 42 Measure Yourself For a Fit (Questions to Answer) • Are the employees empowered to shut a process down if an out‐of‐control condition occurs, and are there resources instantly available to help the employee identify and implement corrective actions to get the process back up and running? • Is the financial community willing to participate in the improvement efforts, assist in the calculation of the financial impact of the improvements, and help reshape the accounting systems to more accurately reflect reality? Source: www.shmula.com 43 44 Customer Supplier Order Store Process 1Process 2Process 3 RMRMFGFG WIPWIP WIPWIP Delivery FACTORY Manufacturing (Top View) 45
- 14. Customer Supplier Order Store Process 1Process 2Process 3 RMRMFGFG WIPWIP WIPWIP Delivery FACTORY PROCESS TIME 15 Days 1 D2 D2 D 50 Customer Supplier Order Store Process 1Process 2Process 3 RMRMFGFG WIPWIP WIPWIP Delivery FACTORY IMPROVEMENT AREA (BOM) 15 Days 1 D2 D2 D Bill of Material 51 Customer Supplier Order Store Process 1Process 2Process 3 RMRMFGFG WIPWIP WIPWIP Delivery FACTORY IMPROVEMENT AREA (WIP) 15 Days 1 D2 D2 D 52 Customer Supplier Order Store Process 1Process 2Process 3 RMRMFGFG WIPWIP WIPWIP Delivery FACTORY IMPROVEMENT AREA (SKILL‐SET) 15 Days 1 D2 D2 D 53
- 15. Customer Supplier Order Store Process 1Process 2Process 3 RMRMFGFG WIPWIP WIPWIP Delivery FACTORY IMPROVEMENT AREA (MACHINE TIME) 15 Days 1 D2 D2 D 54 Customer Supplier Order Store Process 1Process 2Process 3 RMRMFGFG WIPWIP WIPWIP Delivery FACTORY IMPROVEMENT AREA (PROCESS‐TIME) 15 Days 1 D2 D2 D 55 Customer Supplier Order Store Process 1Process 2Process 3 RMRMFGFG WIPWIP WIPWIP Delivery FACTORY IMPROVEMENT AREA (Customer) 15 Days 1 D2 D2 D 56 Customer Supplier Order Store Process 1Process 2Process 3 RMRMFGFG WIPWIP WIPWIP Delivery FACTORY IMPROVEMENT AREA (Supplier) 15 Days 1 D2 D2 D 57
- 16. 58 Customer Supplier Order Store Process 1Process 2Process 3 RMRMFGFG WIPWIP WIPWIP Delivery FACTORY IMPROVEMENT AREA (BOM) 15 Days 1 D2 D2 D Bill of Material 59 60 Finished Product Cable Name Mtr Connector 1 Name Qty Connector 2 Name Qty Connector 3 Name Qty LCPC‐LCPC SM 2MM DX 3 Mtr. RM OFC SM Minizip LSZH Cable 3.054 RM LCPC SM Connector 2 RM LCPC SM Connector 2 FCPC‐LCPC SM RUGG 2F 10 Mtr. RM OFC 9 SM Ruggerised 2F CABLE 10.0254 RM FCPC SM / MM Connector 2 RM LCPC SM Connector 2 FG RM BOM MASTER Party Party Order No. Order Rect Dt/ Item Qty Unit Rate Value Target Del. Date RM Issue Dt. Order Dispatch Dt. ABC E‐MAIL 11‐02‐16 LCPC‐LCPC SM 2MM DX 3 Mtr. 10 320.40 3,204 17‐02‐16 16‐02‐16 10‐04‐16 XYZ 10118 10‐02‐16 FCPC‐LCPC SM RUGG 2F 10 Mtr. 78 1,213.20 94,629 19‐02‐16 15‐02‐16 SALES ORDER DETAILS Cable Name Mtr Total Qty Connector 1 Name Qty Total Qty Connector 2 Name Qty Total Qty. RM OFC SM Minizip LSZH Cable 3.054 30.54 RM LCPC SM Connector 2 20 RM LCPC SM Connector 2 20 RM OFC 9 SM Ruggerised 2F Cable 10.0254 781.981 RM FCPC SM / MM Connector 2 156 RM LCPC SM Connector 2 156 RM CONSUMPTION 61
- 17. TARGET Fixed after taking discount of weight (+ / ‐ ) % allowed by the Customer (Say: 4.75 – 5.25 kg for 5 kg Bottle with 5% variation) ACTUAL (for a Lot of a Product) {Total Raw Material Issued (Less) difference of WIP} No. of units produced 62 TARGET Mixing of Fresh & Used Material allowed by the Customer (Say 10% of Used Material in a unit of FG) ACTUAL (for a Lot of a Product) Reduction in Stock of Used Material {Total Raw Material Issued (Less) difference of WIP} 63 IDENTIFY:IDENTIFY: •• Metrics Metrics KPIs (Key Performance KPIs (Key Performance Indicators)Indicators) CREATE CREATE •• Single Page Monitoring SheetSingle Page Monitoring Sheet •• Balanced ScorecardBalanced Scorecard •• DashboardDashboard 64 P & L SHEET ON _________ REVENUE FOR THE DAY EXPENSES FOR THE DAY PARTICULARS TODAY SALE YESTDY. SALE LAST MONTH AVG. SALE VARIANCE (LAST DAY TO TODAY) VARIANCE (LAST MONTH AVG TO TODAY) PARTICULARS ACTUAL ROOMS REVENUE 148,977 152,268 141,989 3,291 (6,988)FINANCIAL CHGS 60,000 MEAL PLAN 24,025 20,425 23,503 (3,600) (522)SALARY & WAGES 35,484 WORLD CAFÉ REVENUE 37,579 14,991 33,681 (22,588) (3,898)ADV & MKTG 2,000 ZENBA REVENUE 21,050 16,680 9,867 (4,370) (11,183)DIESEL 4,469 LA MADELEINE BAKERY REVENUE 893 158 657 (735) (236)ELECTRICITY 37,008 MINI BAR REVENUE - - 13 - 13L.P.G 5,740 LAUNDRY REVENUE 1,090 2,005 874 915 (216)RAW MATERIAL 158,409 IN ROOM DINING REVENUE 1,720 465 426 (1,255) (1,294)STAFF FOOD COST 2,897 SWIMMING POOL & GYM REVENUE - 3,213 - - - MINERAL WATER-210 1,470 TAXI REVENUE 3,100 - 2,758 (3,100) (342)DENTAL KIT-0 - BUSSINESS CENTRE INCOME - - - - - SAVING KIT -0 - TELEPHONE REVENUE - - - - - SLIPPER -0 - BANQUET REVENUE 570,088 215,419 60,949 (354,669) (509,139)COMB-0 - CRICKET MANIA 800 800 - - (800)TAXI 3,152 TOTAL REVENUE 809,322 426,424 274,717 (386,111) (534,605.00)LAUNDRY EXP. 2,200 STATISTICS PEST CONTROL 664 ARR 2,128 2,417 5,259 289 3,131TELEPHONE /WIFI 1,000 Rev Par' 1,330.15 1,359.54 1,267.76 29 (62)AMC/ REP & MAINT 4,500 No. of Occ Rms 70 63 27 (7) (43)ADMIN EXP 12,000 % of Occu 63% 57% 24% -6% -39%INSURANCE 2,000 LICENCE FEE 3,000 SECURITY EXP 8,100 VARIANCE FROM BREAK EVEN 509,322 RAW MATERIAL (SPOIL) 3,225 PROFIT 420,946 DEPRECIATION 9,000 BEVERAGES CONSP. 32,058 Total Expenses 388,376 HLP:-(DG :320 KV 00.00 HRS (551644), DG 570 KV 00.00HRS (551431), DG570KV00.00 HRS (85154) ( EM:778501-779015=514*8), HWG 19.00R.HRS Other Taxi Guest Name Timing Com.Name Km Destination Exp. Remarks Mr.Manish 09.55 to 17.05 SalesCall 34 km Fbd. 1,100.00 SalesCall Single Page Monitoring Single Page Monitoring SheetSheet 65
- 19. 70 71 72 73
- 22. 82 83 84 85
- 23. 86 87 88 89
- 24. © SSAR & ASSOCIATES, Chartered Accountants© SSAR & ASSOCIATES, Chartered AccountantsGrow More …. Grow FasterGrow More …. Grow Faster 90 91 © SSAR & ASSOCIATES, Chartered Accountants© SSAR & ASSOCIATES, Chartered AccountantsGrow More …. Grow FasterGrow More …. Grow Faster • No Customer = No Profit = No‐Business • Average business doesn’t hear from 96% of unhappy customers • For every 1 complaint received, there are 24 people with unvoiced problems, 6 of which are serious • >= 90% who are dissatisfied with the service they receive will not buy again or come back • Of those who complain, 50% ‐ 70% will do business again if complaint is resolved. 95% will return if resolved quickly. • Average customer with a complaint tells 9 to 10 people, 13% tell more than 20 people. • Those who have complained and had resolution tell 5 people 92 93
- 25. Identification of Improvement Areas 94 No Customer = No Business 95 Analysis of Competitors Name, location and business size Product / service Price Strengths Weaknesses Understanding the Customers 1. What prompts your customers to buy your product/service? 2. What factors help your customers choose which business to buy from? 96 SWOT ANALYSIS (CUSTOMERS) UNIQUE SELLING POINT (USP) • What is your USP? Strengths Weaknesses Opportunities Threats 97
- 26. CUSTOMER ENQUIRIES MANAGEMENT New Enquiries Proposals Sent Negotiations New Customer ABC 03/05/16 Rajesh 03/05/16 BhanuSales 03/04/16 Ajay New Age 28/04/16 Phase 25/04/16 Vishal Curious 25/04/16 Punnet 27/04/16 Neena BCD (Ajay) 27/04/16 29/04 Nice (Neena) 25/04/16 28/04 98 IDENTIFY & RECTIFY 99 Analyse the Processes Collect the Data Target Improvement Areas Value Added Necessary Non Value Added Non Value Added 100 101
- 27. 102 • http://trademap.org/ • http://procurementmap.intracen.org/ • Weekly email to customers + prospects for new designs • Branding exercise organise conferences / seminars / talk‐shows Increase product visibility • Create multiple range of a same product show the different range • Product Catalogue • Make‐in‐India incentives 103 104 © SSAR & ASSOCIATES, Chartered Accountants© SSAR & ASSOCIATES, Chartered AccountantsGrow More …. Grow FasterGrow More …. Grow Faster • The Customer is Always Right • Customer looks for “Agreed Quality” at “Agreed Cost” within “Agreed Delivery Time” (QCD) • Keep ears on the Ground and Listen VOC (Voice of Customer) • Capture Customer Feedback from: • Customer service • Technical support • Claims/refunds • Sales force reporting • Focused questioning of selected customers • Observing customers using the product or service • Monitoring customer satisfaction • Monitoring of broad market trends (Social Media, Blogs,……) 105
- 28. Keep ears on the Ground and Listen 106 107 108 ‐‐ CustomersCustomers ‐‐ Raw MaterialsRaw Materials ‐‐ SuppliersSuppliers ………………………… 109
- 29. ENTIRE WORLD AVAILABLE Arbitrage options ALWAYS EXIST 110 111 •• Change is the Law of NatureChange is the Law of Nature •• We can’t Avoid CompetitionWe can’t Avoid Competition Answer Lies In:Answer Lies In: •• Creating Niche by Market Research Creating Niche by Market Research & Exploring the World& Exploring the World •• Reduce / Reduce / OptimiseOptimise CostCost •• Improve CashImprove Cash‐‐FlowsFlows 112 113
- 30. FLOWFLOW IMPROVE ASSET TURNOVERIMPROVE ASSET TURNOVER 114 115 116 RM FG (Value Creation Cycle) 117
- 31. 118 119 120 121
- 33. What Stops 126 Hours Product Name Weight / Unit Production (Units) Cumm. Prod’n No. of Operators Reasons for Prod’n Loss 08 am – 09 am 09 am – 10 am 10 am – 11 am 11 am – 12 pm 12 pm – 01 pm 01 pm – 02 pm 02 pm – 03 pm 03 pm – 04 pm 04 pm – 05 pm 05 pm – 06 pm PRODUCTION SHEET FOR THE ___________(date) Target for the day Product Qty _______ ______ _______ ______ Machine No. _________ 127 TARGET Use STOP – WATCH & observe Take 3 – 5 Trial Run Average Time / unit ACTUAL Units Produced in a day Total No. of Hours 128 IMPROVEMENT AREAS Customer Order receipt date Raw Material Issue date FG Dispatch date Target / Ideal 15 Days 3 Days Customer Order receipt date Raw Material Issue date FG Dispatch date Actual 8 Days 25 Days Improvement Scope: 10 Days Improvement Scope: 5 Days 129
- 34. 130 131 132 133
- 35. Work‐Time • Waiting time • Search Time • Interruption • Information Overload Work System • Evironment • Clarity of Information • Unclear Targets • Technology Employee • Creativity • Know‐how • Health Business Process • Inventory • Handovers • Work Procedures • Errors • Waiting Time • UnnecessoryData • Transportation • Signature Trust issue • Task switching • Quality Inspection • Reviews • Meetings • Multiple Signatures • Approvals (When to start, when to stop Process transparency not there Why approval for start and stop required) The person not having right skill matrix So, Approvals required • Producing Reports that nobody uses • Queue Time • Redundant Systems • Incomplete Information 134 135 136 137
- 36. Department / Functions Invisible Elements Live Wires Extended Team Organisation Structure Production Vacuum/ Demand Leadership Computer‐ isation Customers Marketing Store Branding New Market MIS Suppliers Purchase Compliance Strategy Product Pricing Communication Accounts Treasury CSR Risk Mgt. Budgets Finance Quality Quality (Value) Fixed Asst. Mgt. Investment Training KPIs/ Dashboards Product Strategy Personnel Public Relations Document‐ ation Crisis Mgt. R&D Audit Personal Life Asset & Data Security Administration Packaging & Labeling Logistics PR 138 Department / Functions Invisible Elements Live Wires Extended Team Organisation Structure Production Vacuum/ Demand Leadership Computer‐ isation Customers Marketing Store Branding New Market MIS Suppliers Purchase Compliance Strategy Product Pricing Communication Accounts Treasury CSR Risk Mgt. Budgets Finance Quality Quality (Value) Fixed Asst. Mgt. Investment Training KPIs/ Dashboards Product Strategy Personnel Public Relations Document‐ ation Crisis Mgt. R&D Audit Personal Life Asset & Data Security Administration Packaging & Labeling Logistics PR ORGANISATION MEANSORGANISATION MEANS 139 140 Basic Elements Department / Functions Invisible Elements Live Wires Extended Team Capital/ Funds Organisation Structure Production Vacuum/ Demand Leadership Computer‐ isation Customers Manpower Marketing Store Branding New Market MIS Suppliers Machines Purchase Compliance Strategy Product Pricing Communicat ion Land Accounts Treasury CSR Risk Mgt. Budgets Organisation Creation Finance Quality Quality (Value) Fixed Asst. Mgt. Processes Investment Training KPIs/ Dashboards Product Strategy Personnel Public Relations Document‐ ation Crisis Mgt. R&D Audit Personal Life Asset & Data Security Administrati on Packaging & Labeling Logistics PR 141
- 37. 142 143 144 145
- 38. SSAR & ASSOCIATES, Chartered accountantsSSAR & ASSOCIATES, Chartered accountantsGrow More …. Grow FasterGrow More …. Grow Faster • No Organisation can work without Team unless Fully Automated • Machines don’t create Life BUT People DO in an Organisation • Primary Difference between Winning & Losing Team is LEVEL OF MOTIVATION “Chak De” creates WONDERS UNEXPECTED gets created • REPLICATION OF PERFECTION is the need of hour • Expansion can HAPPEN with IN‐HOUSE BATTERY OF LEADERS • Team needs to be NURTURED 146 147 TARGET Fixed as per Machine requirement ACTUAL Average number of operators hired in the day 148 SSAR & ASSOCIATES, Chartered accountantsSSAR & ASSOCIATES, Chartered accountantsGrow More …. Grow FasterGrow More …. Grow Faster • Hire People with Quality Attitude • Constantly Identify Leaders for managing Depts / Responsibilities • Alignment of Personal & Departmental Goals with Organisation Goals by Constant Reinforcement • Culture of Internal Competition (Regular Appraisals, Appreciation, Recognition, Rewards …..) • Capture Feedback & Complaints (Implement or Resolve) • Define “Job Description” bring Clarity of Job Profile 149
- 40. Role Respons‐ ibility Required Skill Desired Certification/ Qualification Gap Analysis Training ‐ External Training ‐ Internal Training – Timeline Available or NA Training required for “NA” Competency Matrix 154 CHECKLISTCHECKLIST 155 CHECKLISTCHECKLIST • Should work on the principle of ‘comply or explain’. • Defines Actions to be taken to complete a Process • Defines the End‐result of the Process • Specifies Expected time for completing an Action • Defines Ownership of Process / Action • Lists Documents to be captured • Defines the Best Processes of the industry • It could be the part of Finance Manual 156 CHECKLIST CHECKLIST ‐‐ ExampleExample Particulars Ownership Periodicity Y / N Financial ManagementFinancial Management Audit of Accounts Accounts Mgr. Yearly Updation of AccountingBooks Accounts Mgr. Weekly Preparation of Budgets Accounts Mgr. Yearly Reporting of Budget Variance to CFO Accounts Mgr. Monthly Bills receipt against Suppliers’ Advances Accounts Mgr. Quarterly Analysis of O/s Receivables & Followed up Accounts Mgr. Weekly Store Management Stock physical verification & matching with Bin Card & Books (25% Stock) Store Mgr. Weekly Identification of Expired Stock Store Mgr. Weekly Goods covered from Polythene Store Mgr. Regular Stock Insurance Store Mgr. Yearly 157
- 41. CHECKLIST CHECKLIST ‐‐ ExampleExample Particulars Ownership Periodicity Y / N Purchase Management Placement of PO / JO ‐ PO to be placed within 7 days of BOM entry Purchase Mgr. Regular ‐ 3 Quotations from Suppliers Purchase Mgr. Regular ‐ Terms & Conditions for a particular PO Purchase Mgr. Regular ‐ Rate approval by MD Purchase Mgr. Regular ‐ Receipt of RM from supplier for quality approval by the mechandisingteam Purchase Exec. Regular ‐ Receipt of approval from merchandising team Purchase Exec. Regular ‐ Placing PO Purchase Mgr. Regular ‐ Inspection report (As per Annex. 1) in duplicate Purchase Exec. Regular 158 Skilling from: ‐ NSIC ‐ Skill India ‐ PM Kaushal Vikas Yojna 159 160 EMPLOYEE ACTIVITY ANALYSIS SHEET 161
- 42. FRAUD FRAUD ‐‐ PREVENTIONPREVENTION 162 FRAUD FRAUD –– PreventionPrevention • Values • Vision and mission • Involve beneficiaries more • Increase staff connection with beneficiaries • Transparent Recruitment • Recruitment – interviewing • Recruitment – references checking closely • Induction programs • Employee commitment • Pay levels(Less variance in the highest and lowest paid staff) ContdContd….…. 163 FRAUD FRAUD –– Prevention Prevention (Cond.)(Cond.) • Management by walking about • Financial management training to Non‐finance staff • Develop a risk register • Develop a good internal control system • Internal audit • Look out for the warning signs of fraud • Be aware of power relations • Whistle blowing • Taking action on fraud or suspected fraud • Written fraud policy 164 165
- 44. 170 171 How Frequently SME checksHow Frequently SME checks •• Balance Sheet Balance Sheet (Where funds got stuck?)(Where funds got stuck?) •• P&L P&L (Whether Profit or Loss ?)(Whether Profit or Loss ?) •• ReceivablesReceivables Monthly / Quarterly / HalfMonthly / Quarterly / Half‐‐yearly / yearly / Yearly ???Yearly ??? 172 173
- 46. 178 IDENTIFY:IDENTIFY: •• Metrics Metrics KPIs (Key Performance KPIs (Key Performance Indicators)Indicators) CREATE CREATE •• DashboardDashboard •• Balanced ScorecardBalanced Scorecard •• Single Page Monitoring SheetSingle Page Monitoring Sheet 179 What is eating Profits & What is leading to that Cost? 180 181
- 47. 182 • To Analyse Each Expense‐Head and Identify its Cost Drivers. • Enquire whether they can be Optimised to Improve the End‐Benefits (Cost‐ Benefit Analysis) 183 184 10 % = 5.0% X 2 Times10 % = 5.0% X 2 Times 15% = 5.0% X 3 Times15% = 5.0% X 3 Times 15% = 7.5% X 2 Times15% = 7.5% X 2 Times 185
- 48. 186 187 188 189
- 49. 190 Date of Complaint Customer / Supplier Nature of Complaint (Broad) Details of Complaint Assigned to Assign date Resolution Date Counter‐ measures Nature of Complaints Month No. of Complaints Date of Complaint Assign to Assign Date O/s days Unresolved Complaints Complaints Nature 191 192 193
- 50. 194 195 196 197
- 51. 198 199 200 201
- 52. 202 203 Date of Complaint Customer / Supplier Nature of Complaint (Broad) Details of Complaint Assigned to Assign date Resolution Date Counter‐ measures Nature of Complaints Month No. of Complaints Date of Complaint Assign to Assign Date O/s days Unresolved Complaints Complaints Nature 204 205
- 53. 206 207 208 209
- 54. 210 211 212 213
- 56. 218 219 220 221