translating strategy into the action - maximize cash

1. Practical Business Improvement Guidances
Translating Strategy Into the Action – Maximize CASH
Muhammad Ikhsan
March 2020

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Content
• Preface
• Key Message for Business
• 4 Step for Practical Business Improvement
- Understanding of Business Objective
- SIPOC Analysis
- Resource Vs. Impact Vs. Effort Analysis
- Implementation & Sustain
• My Lovely Tools

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Preface
I would love to say Thank You to
all the “Expert/Founders” that
dedicated theirs valueable time to
formulate/construct all the
tools/method/framework and
methodology that I have Learned
- Adopt - Adapt during my
profesional work.
Freelance Consultant
Business Strategy, Transformation & Improvement
Jul, 2017–Currently working here
PT. Dire Pratama - Mining Services
CEO Advisor
Aug, 2019 – Oct, 2019
PT. DHL Supply Chain Indonesia - Logistic & Supply Chain
Operation Management System Advisor
Apr, 2017– May, 2017
PT. Salam Pasific Indonesia Lines - Shipping Line & Logistic
Senior Coach at Strategy Development & Implementation Division
Mar, 2016 – Mar, 2017
PT. Indosat, Tbk - Telecommunication
Division Head of Strategic Program & Implementation
Sep, 2012 – Aug, 2015
Dyno Nobel - Mining Services
Business Improvement Manager
Sept, 2011 – Aug, 2012
PT. UNINDO ( JV Schneider Electric, PT PLN, Tbk.) - Electrical Manufacturing
Industrial Excellence Manager
Oct, 2007 – Sept, 2011
PT. LG Innotek Indonesia - Electronic Manufacturing
Part Leader Incoming Quality, Factory Improvement and Production Supervisor
May, 2005 – Oct, 2007
Groupo Boa Vista, Brazil – Risk Management Consultant
Consultant Nov 2003 - Jan, 2005

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Key Message of Business
By the right people (Attitude + Skill + Knowledge) as the foundation
End goal of business are to generated “CASH“
By optimize the Information, Material & Money flow
through the entire end to end supply chain process
Why We do Business ?
How to Achieved ?
Who Operated ?

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4 Step for Business Improvement
1. Understanding of Business Objective :
Deliver Product/Services “ to the right customer” at the right quality, the right cost, the right time
2. SIPOC Analysis :
End to end Supply chain analysis in term of managing the Information, Material & Money flow according to
“Agreed Standard” and “Industry benchmark”
1. Business Problem : Capacity, Quality, Cost, Delivery by Departement and Cros Function
(Organization/Data/System Silo)
2. Tools/Framework: adopt - adapt principle according the company needs and readiness
3. Balanced Scorecard: Internal vs. External, Leading Vs. Legging, Align Vertical Vs. Horizontal
3. Resource vs. Impact vs. Effort Analysis :
1. People Skill vs. Attitude Matrix
2. Value Add /NVA vs. Important Matrix
3. Data Maturity Level
4. Effort vs. Impact Matrix
5. Financial Impact analysis
4. Implementation and sustain the change:
Managing change by Portfolio, Program, or Project type

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Understanding of Business Objective
the right customer
Deliver Product/Services “to”
“at”
the right cost,the right quality, and the right time
+ +
according to “Agreed Standard/target” and “Industry benchmark”

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Strategy Development- Strategy Diomond
Example Strategy for National Logistic (BUMN) Company :
Indonesian Goverment Spending for logistic cost approximatly >100 Trilyun IDR/ Years
if we will take only for 10% market share : around10 TIDR/year revenue.
1
2

8. SIPOC Analysis
Capacity: Supplier , Funding/Financing
Quality: Defect Rate , Obsoletes stock
Cost: Cost/Unit , Raw Material stock
Account Payable Aging
Delivery: On time delivery , Clearance's
Lead-time
Capacity: Facility (Machine/Fleet/Space) Avaibility ,
Facility Utilization
Quality: Defect Rate , Scrap Ratio , Breakdown ,
Safety , Productivity , Bill of Mat.(BOM) Acc.
Cost: Direct Cost , Work in Process , Obsoletes ,
Overtime , Maitenance/Repair/Ovehaul Cost ,
Delivery: Planning Acc. , Leadtime , Funneling (IT)
Capacity: Volume , Channel Distrbution ,
Order vs. Market
Quality: Complaint , Brand Health ,
Churn rate , Customer satisfaction
Cost /Prices: Margin , F/G , COGS ,
Revenue , Account Receivable Aging
Delivery: Fullfilment , Leadtime Fullfiment
, Time to Market
Organization/Data/System(IT/ERP) Silo
People/Skill
Working Capital , Overhead cost , Profitability , Cash , Asset Utilization
Make or Buy Analysis
IPO/Stock split, Streamline of Silo, Merger&Aqucition Analysis, Sales&Operation Planning, Problem Solving, Train of trainers (TOT)
Managing Project :PDCA, Lean, Six Sigma, Project Management, Scrum, 4xD
Supplier Development
QCC
Sourcing from Low cost country
TPMQC 7 Tools
Rough Cut Capacity Planning (RCCP)
Plan/Production Strategy: MTS, MTO, ETO
5S 4P/7P Analysis Customer Experiences
Marketing Spend ROI
Product Development Life Cycle Management
Design Thinking
Product Profitability
ERCS
Shop floor Leadership
VSM Standardize work
Sales Volume Revenue
Customer Aqusition Cost
Visual Management Automation
Kano Analysis
New Customer
Facility Avaibility Time Customer SatisfactionCustomerInternal/Operation
Finance
Learning&Growth
Gross Margin EBITDAEBIT CASH
Training& Development Employee Survey
ROCE
Defect Ratio
OEE
New Product/Service - NPI
Net Promoted Score (NPS)
Page time convertion (IT)
Productivity
Inventory Record Accuracy- IRAOn Time Delivery Market share
Return on Asset (ROA)
Performance Review Employee Engagement
Working Capital
Lost time Injured
Unit cost/Product Cost Saving
Planning Accuracy
End to end Supply chain analysis in term of Optimize the Information, Material,& Money flow according
to “Agreed Standard” and “Industry benchmark”
Audit Perfomances
Supplier - Input Process Output - CustomerDescription
Business
Problem
Tools/
Approach
Balanced
Scorecard
Function
Cross
Function
Function
Cross
Function

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Resource Analysis 1 – Attitude vs. Skill Matrix
Analysis based on data and observation*:
1. Quadran 1: Low attitue & skill: 10~15%  realigment or replace
2. Quadran 2: Low attitude & high skill: 10-20%  coaching & conselling
3. Quadran 3: High attitude & low skill: 40-50%  training & development
4. Quadran 4: High attitude & skill: <15%  retain & grow
And as the busness improvement/change agent we have to adjust our leadership
style in driving the change : directing, coaching, supporting and delegation mode to
our team.
Key note: Who Organization/structural Leaders vs. Community Leaders ?
1
skill
skill
High
High
Low
2
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* Note:
• Data: Assestment, Performance review, Personal Opinion - 360 degree eveluation will be perfect
• Observation: Engage directly with team to verify data ( canteen, smoking area, public area interaction vs.
office/factory/formal interaction)

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Resource Analysis 2 – Value /Non Value add vs. Importance matrix
Analysis based on data and observation:
1 NVA & unnecessary : 20-30 % Quick win
2 NVA & necessary: 15- 25%  ERCS
3. VA & unnecessary: just chant happen
4. VA & necessary : <10%  Innovation –significnaly change
process/improve performances
Combining this 2 matrix to got the balance of your
priority agenda in improving business

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Resource Analysis 3 – Data Analysis
Knowing your data maturity level will help to define the tools /framework that suitable/fit to organization
Thick data
• How & why
• Description
• Collected by poeple
• In-depth
• Behaviors, action, emotions,
intentions, motivation of a few
• Collected as a part of study
• Analysis include s developing codes,
summaries & themes
Example :
 usability test, contextual research,
interviews, diaries, etc.
Little data
• It‟s big data for one
• Focus on persoal/spesific
goals
• Individual grant access to it,
rather that company
Example:
 Machine Performances data,
check sheet data, etc.
Big data
• What, where, when, how
• Multi structured
• Collected by machine
• Broad
• Behaviour//action of many people
• Poeple are hot highly aware of data
being collected
• Analysis using statistical methods
Example:
 Transactional data, Customer services
logs, Sensor data, social media posts,
A/B test, etc.
“Discovery (Behavioral analytics vs. Observation) and
Improve (A/B tests vs/ Usability tests) the Pairings” the type of data are the key

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Finance Impact Analysis 3 – 3 Major Improvement Area
Return on
Capital
Employed
Capital
Employed
Capital
Expenditures
Stocks/Inventory
Trade Receivables
Trade Payables
EBIT
Revenue
Total
Costs
Fixed cost
Variable
cost
Profitability Improvement
Cash Improvement
1. Gap to budget
2. EBIT Vs Last year
3. Cost Avoidances
1. Gap to Budget
2. Depreciation or Interest or
Tax or Working Capital or
Transition Costs
Revenue uplift Improvement1
2
3

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Financial Impact Analysis – Profit&Loss Impact
100100 (10%)
150 (+ 50 %)150 (+ 50%)Margin
Fixed charges
375 (30%)300300 (30%)Salaries
625 (50%)450 (- 10%)500 (50%)Purchases
10001000Revenue
Equivalent to obtain the
same improvement
Reduction of 10 % of the
purchases
Current situation
100 (10%)
100 (10%)
1250 (+ 25%)
To increase the margin by 50 % a company can :
Reduce Purchases by 10 % or Increase Revenue by 25 %

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Financial Impact Analysis – Working Capital –Cash Impact
0 20 40 60 80 100 120 140
Inventory
Payables Receivables (AR)
Cash GAP
Days
Inventory
Arrives
Inventory
Shipped
Cash
Paid
Cash
Received
Example Best Practise in AR :
1. PT. PLN, Tbk
- Improve Payment >30days to CBD
Post paid to Pre Paid scheme
2. Telecommunication Company
- Major account Prepaid, and in
dealer/distribution CA/deposit scheme
3. Hotels/airlines for umroh
- CA/deposit scheme for certain volume
by Umroh travel agent
4. Warteg/UKM/Warung
- COD scheme
5. Warung Prasmanan
- CBD scheme
6. e-Wallet/Digital Money/Cashless
exclude credit card
- CA/Deposit/CBD scheme
Notes: PT: Payment Term, CA :Cash in Advance/deposit, CBD = Cash Before delivery, COD : Cash on Delivery,
Example Best Practise :Proces/Inventory Improvement
1. Online system : Reduce time to purchase(Funnling) average 20 minute to 15 minute
Landing page
2. Logistics : Leadtime delivery reduction 3 Days to 2 Days
Purchase
Web funnneling & time acess
Loading
/unloading/
Stuffing
Storage/
Before
departed
Delivery
Land/Sea/
air
Loading
/unloading/
Stuffing/Storage
Leadtime delivery
start
start
End
End
Example Best Practise in AP:
Make or Buy Strategy:
Option : Buy catering services:
Factory/Office outsources
the meals services to vendor
Before inhouse to outsource
with Paymet term >30-60 Days

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Project Management
Project Management Level Description Example
Porffolio Corporate
group of different program and/or project
with same organization
Revenue uplift 5% for Traditional Market
2018
Program Division
group of projects that are similar/related
to each other
Increase Revenue 3% for traditonal
market in West Region 2018
Project Function/Dept
a temporary endeavor undertaken by a
company or organization
Reduce Promo/product time to market
lead-time < 3 weeks
Channel/Distribution bonus performance
new scheme
Increase facilities utilization by 10%
Reduce facilities breakdown by 5%

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Project Execution and Sustain – Managing Activity
Type Name/ID Benefit Duration Project Team Review Audiances/Review Deliverables
Portfolio/
Program/
Project
Name/ID
Portfolio
/Program
/Project
Financial and
Non Financial
Benefit
Start and End
Targeted Date
Program
Manager/PMO,
Project Leader,
Team Member
Daily, Weekly,
Monthly depend
on the activity
Gate Review :
BOD, Manager, PMO,
Project Leader –
Mandatory
Project handover
document sign off
Project Review:
Project Leader & Team
Member - Mandatory,
PMO & other
stakeholder not
mandatory)
Financial and Non
Financial Benefit
Validation
Project
Documentation
Business
objective
1
SIPOC
Analysis
2
Resource,
Impact,Effort
Analysis
3

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Project Execution and Sustain
Execution +
Standarization
Project
Handover
• Implement new 1st „To-Be‟ processes.
• Review performance and Situational
Assessment.
• Perform fine-tuning.
• Execute process training where necessary.
• Prepare 2nd (final) „To-Be‟ process docs.
KeyActivitiesKeyOutputs
• Obtain process sign-off and
handover to Process Owner.
• Perform post handover
monitoring.
• 2nd (Final) „To-Be‟ process
docs.
• Situational Assessment
• „To-Be‟ process sign-off
• Regular Performance tracking
• Audit report
• Award System
Regular Audit
Operation
• Running operation as buisness as
usual according to new standard
• Performance audit

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Pillar of Success on The Execution System
Don't Let the things that you can’t do that prevent you to do the things that you can do

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My Favorites – If only to choose one toosl to implement?
If only have to choose one, I would prefer tools/Method below cause of simple and powerful :
1. Mindset : Lean Thnking (Customer define Value, Value Add Vs. Non value Add, Flow Management)
2. Strategy Development: Diamond Strategy : Economic logic, arenas, Vehicles ,Differentiators, Staging
3. Product Design : Kano Analysis: product/services leveling : Basic, Need, Delighters
4. Basic tools: 5S (Sort, Set in order, Shine, Standardize, Sustain)
5. Process Mapping : Value Stream Mapping (VSM)
6. Problem Solving: 5 Why Analysis
7. Cost Management : ABC Analysis – Direct Cost+Sharing Resource Cost by Product/Services
8. Management Control: Dashboard, (Done task, Next task & Problem/Obstacles) , Stand up meeting (Lean/Scrum)
9. Key Performance Indicator : Cash Generated from Operation
10. Leadership Style: Situational Leadership: Directing, Coaching, Supporting, Delegation mode
11. Tagline: Before Doing : “Stop & Think” then “Practice Make Perfect”

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Further discussion &/or chit chat
Fell free to contact me:
ixan_98@yahoo.com
+6281318630166