The document discusses strategies for maximizing profitability in the automotive component industry. It recommends measuring both revenues and costs accurately, monitoring movements of revenues and costs, and managing for continuous improvement. Specific strategies mentioned include yield management, throughput management, activity-based management, and process value analysis. The goal is to sell the right product to the right customer at the right time for the right price through an integrated approach combining revenue management and cost management.

1. Customer Profitability for the Automotive Component Industry Bala V. Balachandran J.L. Kellogg Distinguished Professor of Accounting and Information Mgmt., Northwestern University Founder & Dean, Great Lakes Institute of Management PMI conference - 30 th July 2011, Chennai

2. The Current Business Environment New Products Changing Workforce New Competitors Manufacturing / Service Excellence Demanding Customers Changing Technology Global Competition Decreasing Margins

3. Levers to Maximize Profit

4. Levers to Maximize Profit

5. Bala’s 4Ms Measure Both Revenues & Costs Correctly (ABC) Monitor Movement of Both Revenues & Costs To Apply 50% Rule For Benchmarking Rule-I and Cashew nut Rule-II & continuous Improvement Manage For Action Plan Yield Management / Revenue Management Thru-put Management Activity-Based Management Process Value Analysis So That We Can: Maximize Profitability

6. Strategic Process Management

7. Strategic Process Management

8. Strategic Process Management Product Innovation/Excellence Nike Merck Sony Operational Excellence FedEx Wal-Mart Costco Latest Products Operational Excellence Personal Touch and Feel Customer Intimacy Activity Based Management

9. Strategic Profitability Management “ Constancy of Purpose”

10. Revenue Management Keenly Observe Buying Behavior of Customers Objective of RM is to Sell The Right Product to the Right Customer at the Right Time for the Right Price “ Revenue management” is the art and science of predicting real-time consumer demand at the micromarket level and optimizing the price and availability of products." R. G. Cross

11. C.M.: ”The relentless pursuit to eliminate Non-value added activities and optimize resource utilization effectively and efficiently." RM - CM: Ensures that companies will sell the right product to the right customer at the right time for the right price with the right cost. An integrated set of business processes and activities that bring together people, systems, knowledge and information with the goal of understand-ing the market, anticipating customer behavior, responding quickly to exploit opportunities effectively and efficiently with company's resources, products and services.

12. Value Chain Perspective of Business Functions

13. Cost Management KANTHAL Bala

14. Cost Management

15. Value Chain Perspective The End Buyer Pays for Margins Throughout the System Supplier Value Chain Supplier Channel Value Chain Firm Value Chain Buyer Channel Value Chain Buyer Value Chain

16. Strategic Cost Management Balanced Scorecard

17. Building Blocks of the e-Corporation ERP Backbone Supply Chain Management Applications Data Mining, Knowledge Mgmt. Apps. Enterprise Applications Integration Customer Relationship Management Applications Intranet Applications eProcurement Applications Direct Material Suppliers Customers, Resellers Employees MRO Suppliers