SAM Consulting Group focuses on three primary principles for organizations: self-organization, interdependency, and diversity. These principles are based on the idea that organizations are living systems that must adhere to natural laws to survive long-term. SAM offers services like produce to order, design to order, and assess to order based on principles of modularization, continuous improvement, and order-line profitability analysis. This document discusses SAM's management model and tools for analyzing profitability at the order-line level to help clients navigate to higher profitability.

1. SAM Extraordinary results through attention to work and people SAM Consulting Group AG G.Cinciripini [email_address] 21/9/2008

2. 3 Primary Principles - 1 The universe is a constantly evolving system that operates according to very few Principles Same for human organizations such as the new global businesses 3 Primary Principles

3. 3 Primary Principles - 2 SELF ORGANIZATION means that everything in the universe has the power to sustain its own unique identity INTERDIPEDENCY it’s possible for anyone entity in nature to use all the energy … but the nature limits on growth; everything in the universe interrelates with everything else

4. 3 Primary Principles – 3 DIVERSITY Newness continually arises from the constant interactions of unique entities, it occurs because everything is related to everything else, and relationships among self organizing entities generate diversity

5. MBM the 3 stems Knowledge (creation) is a cornerstone of what makes any organization successful organizations are interdependent with larger natural and social systems MBM = how work is organized must be guided by principles of living systems

6. a lesson by Anders Broems to survive and prosper in the long run requires a business to follow practices that adhere to those principles

7. SAM Offer Produce to Order Demand driven Supply/Production/Distribution Design to Order Modularisation and Demand driven design Assess to Order Order-line profitability Analysis Practise Theory Continuous Improvement & Flow principles Modularisation principles Technical commonality Activity and cost analysis Profitability forums Modular training programmes Leadership and training programmes Level of awareness - “Litmus test” Order-line costing Build to Order Services … where customer and product meet .

8. Management model

9. ABC Activity Based Costing Order Line Profitability Analysis Tool No net linear connection LINK organization’s profitability with costs and revenue Accounting info can measure and keep track of results BUT no insight into the particular inner relationship that determine those results Managers are more interested to a non-accounting system that can focus on the organic union between customer and company

10. ABC Activity Based Costing Order Line Profitability Analysis Tool Managers will be able to “assess to order” with such non accounting financial information when they adopt a tool known as ORDERLINE PROFITABILITY ANALYSIS Orderline profitability data visibly connects the earning of profit with the conditions that exist where the customer’s needs and company’s costs come together in a natural union

11. Profit (+) (-) 100% “ Banana”-curve

12. Creating profittablity modells Two basic approachs Create analysis model based on a software package Create software solution based on the analysis model

13. The Order-line, a unique costing object Customer Customer Segment Geography Market Product Product Group Raw material or components Related products Volumes Buying frequency Rebates Lead times Sales channel Suppliers

14. Resource analysis Research and development Sales Manufacturing

15. Navigate to higher profitability PRODUCT

16. Vertical results give transparency Material Material Transfer price Revenue Production unit HQ & Central functions Sales company Vertical view Material Material Transfer price Volume Structure Newness

17. Profit Mapping – 1 Q1 Q2 Q3 Q4

18. Order line profitability Map - 2 the customers in Q4 are all to be ‘dropped’ ?! each point contains all detailed non-accounting information, like: revenue, gross margin administration and sales costs logistic costs

19. Order line profitability Map - 3 e.g. the mapping is done for auditing of one customer: the tool supports to view the conditions to increase the total profitability via the less profitable product handling, the terms of payments, the terms of delivery, etc. the analysis is a valuable tool to plan – proactively – the relationship with customers

20. Order line profitability Map - 4

22. Structural indexes ( in case of modular production ) - the link between structural complexity and costing Technical commonality TCC = 0,28 CCC = 0,12 Commercial commonality

23. Profitablity learning

24. Data flow Analysis model (ana-tool) Calculation model (clc-tool) Data capture (SQL or Access) Accounting information cost centres, accounts, cost, etc Product, customer and order-line information Result analysis (SQL, Access or QlikView) Standard reports In-depth result analysis Pricing Comparison estimated versus actual Sales patterns Quality gate Quality gate

25. A Chemical Company : Operational outcome 2004

26. Contacts for Italy : Dr Giorgio Cinciripini [email_address] phone +39 335 593 2686