Engineering the enterprise business strategic plan

ENGINEERING THE ENTERPRISE BUSINESS STRATEGIC PLAN
L | C | LOGISTICS
PLANT MANUFACTURING AND BUILDING FACILITIES EQUIPMENT
Engineering-Book
ENGINEERING FUNDAMENTALS AND HOW IT WORKS
April 2021
Expertise in Process Engineering Optimization Solutions & Industrial Engineering Projects Management
Supply Chain Manufacturing & DC Facilities Logistics Operations Planning Management
Re-writing the Enterprise Business Strategy

“Re-writing the Enterprise Business Strategy”
All business enterprises are set to participate in a specific industry, providing a desired
scope of services for a random range of potential and already “loyal” customers in the free
markets; where other industry participants compete directly and indirectly, to get the
potential customers preferences for their products and services
In an era of economic turmoil; due to crisis caused by world-wide events, such as
COVID-19; it is important to understand the long term monetary effect in all global
shrinking economies; causing a shocking halt to demand and supply chain across all
industries in all countries, without exceptions, for small-medium-large domestic and
international enterprises; including large multinationals
The multiplying money supply shrinking effect; grows exponentially, rather than linearly;
this is reflected in all industrial sectors for all type of products and services; enterprises
become lost with their shortages of cash flow, and unavailable working capital, including a
continuous increase in their financial debt obligations and accumulating economic net
profit losses
Enterprises might go down with the global economic collapse; not only their customers
and suppliers are lost, but their markets, and their financial strength is weakened down to
an unimaginable level; almost everything is lost at high speed before they can react, in
the believe that the economic crisis, is temporary

To survive the economic turmoil, enterprises are urged to re-draw their business strategy in an
innovative way, never before experienced; with urgency and limited options to face the global economic
crisis
The general business enterprise practice, in determining their business strategy, has been mainly, to
focus their resources and synergies, guided by their business development management team; with over
expectations founded in their diverse accumulated experiences and skills; assuming that that will be
sufficient to define the path to continue their economic survival
However, it takes more than general administration, marketing, sales, business communication, financial
analysis, and negotiations skills to draw the Enterprise Business Strategy in a living world of economic
crisis, such as East/Asia vs West commercial and geo political global war threats, sanctions, and recently
covid-19
Other economies suffer changes of style from neo-liberal to nationalist, republicans to democrats, pseudo
democracies to military dictators and the list goes on; like the shift of global geo-economic power from
the west USA-EU minorities to the highly populated and geographical large countries of Russia, China and
SEA

Engineering a Business Case and its Business Strategy in times of turbulence
The fundamental principle and technique to be used as the source of study, is the systems approach, and
the focus of study, is the self-enterprise anatomy
In parallel, the understanding of basic enterprise business concepts, is the starting step in the
engineering process of designing the Business Strategy
Background Goal (Business vision)
The goal is the ultimate destiny desired by the enterprise in their business spectrum; whether this is in
an integrated industry, vertical growth, or participating at a certain level of an industry supply chain
The Goal has to be realistic, down to earth, and most consider all industry and economics, present and
expected crisis developments
Focus is to be made in the current global economic events, short term expectations, mid and long term
industry developments; and create a self-vision within the industry, where the enterprise participate and
compete

Objectives (measurable parameters)
Those are basically related to productivity rates, production yields, process cost
reductions, management overhead cost reductions, fixed cost reductions, depreciation
and bank interest re-scheduled, sales volumes to capacity installed ratio, industry
prices and quality benchmark indexes among others measurable
Strategy (short – middle – long term)
Those are to be defined within a time scale of 6 - 12 – 18 - 24 months and beyond up
to 25 years plan horizon

Projects/Programs setting
Those are the identified activities to carry out, to be schedule on a month by month
bases, starting from month 1 to month 24; before moving to the next step of planning
for the next years to come
Tactical activities
Those are related to the questions of who, how, when, where and how much
investment, is required to make the strategy happen, step by step; within the time
frame, resources and assigned budget

Assessing the Current Enterprise Business Situation
The initial analysis starts with a look at the enterprise Profit and Loss Statement report for the
current year, and the previous last two years
Next is to observe the enterprise EBITDA – Earnings before Interest, Taxes, Depreciation, and
Amortization performance, month by month over the last two years, and the current year
Then. the existing customers portfolio volume and value sales report, month by month, over the
last two years, and current year
List out all marketing –sales projects that did not take off at all over the last two years and this last
year; without looking at the reasons behind, or explanations why they did not succeeded
Prepare the marketing-sales pipe line score card report

Finally look at the marketing-sales projects, expectations and potential customers in the pipe line
score card report; look at the plans and achievements, month by month; over the last two years
and current year, to measure the ratio of success and the time to realization required to get
results, if ever got some sporadic results
The business assessment figures, will quickly show, what is the current enterprise financial situation, and
where is it moving in the short, middle and even long term; regardless of the global economic
developments
Enterprise Operational bottle necks (find them through diligent detail audits)
operations flow & layouts
measure the complete set of operational cycles and flow constraints along the complete
production/services processes
draw the current processes layout
check for balanced processes and shorter operational cycles
identify waste, obstruction barriers (physical, rules/regulations, internal/external delays,
other constraints)

machinery and equipment capacity
measure machinery and equipment capacity at full utilization
measure process cost at breakeven point and full capacity
measure process cost at current last 3 months capacity utilization, and the process cost of
capacity under-utilization
check maintenance condition, and cost to be at best condition
identify all repairs and accessories required to run at best

utilities capacity
check the maximum utilities capacity available and running cost
check maintenance condition, and cost to be at best condition
identify all repairs and accessories required to run at best
identify additional capacity required to support full machinery and equipment running at
maximum capacity
labor skills and production capacity
check tools used by labor, ergonomics, production skills rates
supervisors skills
review all process quality assurance charts and check on supervisor know-how and skills to
comply with processes quality
test all technical know-how required for the operation and mark
identify gaps and draw technical skill training requirements
middle manager’s skills
review all functional operational processes, quality assurance specifications, charts and check
on administration know-how and operational skills to comply
test all technical know-how required for the processes and mark
identify gaps and draw technical skill training requirements
upper management skills
survey their understanding of the enterprise Goals, Objectives, Strategies, Tactical Programs
and compare current and past enterprise performance vs future expectations
survey their understanding of the enterprise economics performance, and what are the
requirements to overcome crisis
survey the basic enterprise production/services to be offered under the current economic
crisis

survey their preferred range of products/services to offer now
survey what is their “short-middle and long” term plan to encounter the economic crisis
survey what has been done, and continue doing during the crisis
survey their focus on operational process weaknesses
identify gaps and draw technical skills training requirements

suppliers capability
identify the enterprise suppliers financial capability to provide favorable credit terms to the
enterprise supply requirements
identify the suppliers offered quality, in respect to the enterprise quality specifications
requirements, and mark in a scale 1 to 10
evaluate the possibility that the enterprise suppliers go bankrupt
evaluate the suppliers price change risk, in the short term

customers base
differentiate between lost customers, could have been customers, existing, going to be and
potential customers
differentiate the customers’ business portfolio, purchases value and estimate the enterprise
supply share in their portfolio
identify possibilities to increase the enterprise supply share
identify the enterprise products and services requirements, to secure the going to be
customers, their business portfolio, purchases value and the enterprise expected supply
share

operations process quality standards
validate the existing enterprise products and services quality specifications and standards
gaps
validate the products/services wish list quality specifications
operations process quality assurance and critical control points
review all products and services quality assurance processes
review all operations process critical control points specs
operations process technology in place
review the enterprise current technology and pitfalls
review what technology is required to improve production - services rates, yields, critical
mass volume, competitive edge
operations capacity installed
identify the required short, medium and long term capacity
operations capacity utilization
identify the required operational structure to operate 24/7

Chart of Accounts Structure Analysis
Execute an operations process costing
analysis at breakeven point and at full
capacity utilization
Execute an operations budget analysis and
compare it with the results from process
costing at breakeven point and at full
capacity utilization
Domestic and International Customers markets
Evaluate current domestic and
international customer markets for the
enterprise current and future products and
services options
Question how those customers markets are
being affected by the international
economic crisis
What is the shrinking/expansion
expectations in the short, medium, and
long term, for those customers markets
What are the enterprise near or direct
competitors doing to hold on those
customers

Enterprise operational processes computer simulation Model
Develop a master computer simulation template model
Modeling the integrated operations processes is the first step to understand what is the right
enterprise business strategy
remove all identified production/services process bottle necks
re-calculate available full existing production/services capacity
simulate all possible options at full improved capacity installed
budget plan based on process cost at full installed capacity
check existing business strategy vs scenarios results

design improved measurable business objectives using innovating technology
design business strategy to achieve business objectives
plan tactical actions to implement the business strategy
simulate the business strategy integrated operations scenarios
check existing business strategy vs scenarios results
design the enterprise business strategy for short, medium and long term scenarios
simulate the integrated business strategy operations scenarios
done, define the enterprise business strategy; define what is the focus to be in by marketing-sales and
its integrated operations; as well as the focus on improving all operational processes

Case Study
Looking at any Enterprise as an external Consultant; at first impression, the Enterprise might look
completely different from what their real business situation is
This could happen due to the influence put on by the top management, while they describe their personal
appraisal, and experiences managing the Enterprise “successfully”
However, as soon as we start studying the Enterprise Goal(s), Objectives, strategies, projects/programs
and tactical activities; the current Enterprise Economics, just doesn’t match with their business financial
statements
In this case study; for the last 3 years the Enterprise under study, was more uncertain in understanding
what was really happening, and even more confused to realize that covid-19 was not the only reason for
their downfall; but the main explanation was now found outside the side effect of covid-19 nationwide
and outside the worldwide economic crisis
As a first step, it was required to draw a ‘draft’ strategy to re-surge from the covid-19 economic effects
and the global economic crisis

Next was to analyze the enterprise chart of accounts, and its complex way to calculate their process
costing, based on sporadic production runs, to service the few sporadic and existing customer orders
This exercise provides the basics for the creation of the production simulation template model; which
includes all finish goods and work in process goods production process cost components, and process
time cycle components
With the creation of this simulation template; then, we proceed to calculate the true production process
costing, separating all other “fix and variable” costs; building the maximum factory production capacity
with all its production lines, and side products or sub products production lines; including all its Assets,
and manpower resources, tools, existing technologies and standard quality limitations

The simulation template model, is now in the fine tuning stage, and it is possible to calculate the true
production process cost of the last production runs, and compare the financial results with those financial
results provided by the enterprise Profit and Loss statement
Most likely there will be differences, but not so significant, and a review of the process cost is the next
step, till all financial figures tally

By now, all process cost components are clearly identified and separated from their original chart of
accounts aggrupation and structure
Next is to calculate the financial break-even point, and the volume of production required, within a
combination of its finish goods products
After calculating the break-even point, it is important to run the simulation model at maximum capacity
utilization; minimum process cost, and maximum results from operations, before the non process fixed
and variable costs, and before depreciation and amortizations
The simulation template model can now go into a series of adjustments to find the best business
products combination at maximum profitability
What happen next is very important; because the present business financial performance vs the current
business at break-even point, is far from being a match, with an even wider gap, to reach to the
maximum business profitability of the enterprise, with the current financial business performance
By this time, we have in parallel, made the enterprise production process appraisal, and identified several
areas for improvement; such as:
to balance the production lines, to implement certain practices to improve in GMP, Health and Safety,
Environment Sanitation, Quality Assurance in all its modalities (inbound, outbound, in production),
Engineering Maintenance, Warehousing, Transportation, Sales order processing, Customer service,
Supplier management, Procurement, Production planning, Production operations, Finance control,
supervisors skills matrix, middle management operations skills, and top management operations skills

Having done that exercise; we can now go back to the strategic draft; make a review, and define
whether it is still valid, or if it is required to re-draw a new strategic draft
In this particular business exercise, it was found that the enterprise needed to do an operations overhaul,
to re-learn the “basics” of business operations across all the enterprise functions, in order to improve in
their quality standards, production yields, production rates, and get ready to fully utilize the enterprise
installed capacity
The most hided critical factor to the business success failure of the enterprise, was the numerous under
performance commercial projects, which marketing and sales pursued over the last three years, including
the covid-19 period; providing weak performance and financial results in all counts
The commercial strategy was not realistic by all means; in the domestic and international markets; the
finish goods products portfolio was numerous, however, its conversion to actual sales was almost non-
existent; with one irregular sales order every now and then; sometimes none in several months over the
last three years

The simulation model template, helps to define the enterprise business strategy; showing which products
combination provides the best financial results; with best utilization of all enterprise resources, and
moving forwards; where to invest in making the enterprise more competitive at maximum business
financial results

Part of the new strategy foundation is a major overhaul of the marketing and sales approach; to focus on
what the enterprise main strengths are its business goals and vision, and where the enterprise is going
To make understand everyone in the top management and middle management, how their team
performance has carried out the enterprise profitability down, is a major exercise, an ugly and a difficult
one to crack down
First, operational training has to be carried out to all operational supervisors and middle managers;
involving the top marketing and sales managers in an indirect training, with continuous, two way
communications and assessments feedback to the highest top management board
At the same time, the enterprise resources have to be improved in terms of operations, assets,
technology and technical-operational skills across all operational functions
Pushing to the limit the enterprise business development, marketing and sales management; to focus on
the strengths of the enterprise

Business development, marketing and sales have to focus on getting the best possible
financial results, and to move away from all the non-essential, un-feasible commercial
projects, with no financial benefit
The enterprise has to abandon all non-essential finish products, which are a financial
burden and waste to the enterprise
The enterprise needs to re-write its business strategy for their short-middle-long term,
regardless of what is the current and future global and domestic situation; regardless of
what is the current national political government style

Engineering the enterprise business strategic plan

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