Re-engineering Profile

1. Business Operations
Strategy and Re-engineering
Keys to Increased Business
Profitability
A Profile of REM Associates of Princeton, Inc.
Resources and Capabilities
ASSOCIATES
MANAGEMENT CONSULTANTS
20 NASSAU STREET, SUITE 244
PRINCETON, NEW JERSEY 08542

2. REM Associates Profile
Our business operations strategy and re-engineering profile includes . . . .
n Business Operations Strategy and Re-engineering
n Profile of REM Associates
n The REM Associates Network
n Functional Areas of Consulting
n Client Industry Profile
n Partial Listing of Clients
n REM Associates Relevant Experience
n Our Approach to Clients:
– Assessment
– Issues and Concerns
– Path Forward
n Overview of The Business Operations Strategic Planning Process.
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3. Business Operations Strategy
and Re-engineering
Today’s business management faces increasingly complex challenges
from a variety of sources, including . . . .
n Business technology issues
n Political, regulatory, and external controls
n Sociological and cultural change
n Investment community emphasis on “real ” earnings and growth.
In addition, increasing business pressures require management focus,
decision making, and action plans directed at . . . .
n Intensified product, service, and market competition
n Innovative pricing strategies
n A constantly changing government regulatory environment
n Greater emphasis on operational and working capital cost reduction
Increasing the need for managing a company with in-depth
understanding, improved knowledge, and skills not previously required in
business management.
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4. Business Operations Strategy
and Re-engineering
Recent assignments found that inefficiencies in business operations waste
as much as 25% of an organization’s operating costs. With profit margins
of 3 to 4%, even a 5% reduction in waste can double a company’s
profitability. Key drivers of this value creation include . . . .
n Revenue - capacity utilization, product speed to market, stock-outs, and
service to customers
n Expenses - inventory carrying costs, production and distribution costs,
transportation costs, logistics productivity, outsourcing, and asset utilization
n Capital Utilization - working capital (inventory turns, order cycle time) and
fixed assets (plants/DC locations, fleet utilization, strategic outsourcing)
By lowering costs and increasing asset utilization, business operations can
free up cash.
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5. Business Operations Strategy
and Re-engineering
Business strategy deals with planning the intermediate and longer-term
direction of the business, including . . . .
n Business mission
n Key strategic thrusts
n Business goals and objectives
n Action plans aimed at strategy implementation.
Business re-engineering is directed at assessing and improving policies,
procedures, and practices to improve costs, customer service, and business
effectiveness, including . . . .
n Operations and process assessments
n Data and information flows and linkages
n Policies, procedures, and practices completeness, consistency, and
effectiveness
n Organization structure and responsibilities – ownership.
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6. Profile of REM Associates
REM Associates, started in 1984, is now in its eighteenth year serving
business clients . . . .
n Advice and counsel in “Business Operations”
n Consumer and industrial companies as well as governmental organizations
n Strategic, tactical, and contingency planning
n Operations evaluations directed at improvements:
– Profit improvement
– Facility operations analysis and planning
– Cost reduction and productivity improvement
– ABC inventory costing and evaluation
– Functional outsourcing
– Customer service
– Organization structure and performance.
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7. Profile of REM Associates
REM Associates represents a network of over sixty experienced
professionals worldwide . . . .
n Senior experienced business personnel
n Most with over 25 years of experience
n Careers in both consulting and business operations
n Variety of business disciplines
n Broad range of industry backgrounds
n Strong inter-personal skills
n Commitment to positive results
n Support from analysis through implementation.
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8. The REM Associates Network
REM Associates Network represents key business operations organizations
and companies. A partial list includes . . . .
Bernard J.
Bernard J.
La Londe - - Joseph
Joseph
Stockbridge
Stockbridge La Londe
Ohio State Andraski
Andraski
Associates
Associates Ohio State
University Group
Group
University
Princeton
Princeton REM Associates
REM Associates CGR
CGR
Computer
Computer Network
Network Associates
Associates
Consulting
Consulting
Miami University
Miami Gross Princeton
Princeton
University Gross Of
University & University
University
of Ohio & Pennsylvania
of Ohio Associates
Associates
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9. The REM Associates Network
REM Associates provides virtually turn-key management . . . .
Setting
Setting
Policies, Goals and
Goals and Operations
Policies, Operations
Procedures,
Procedures, Objectives
Objectives Assessment
Assessment
and Practices
and Practices
Organization Activity
Activity
Organization Strategy
And Planning Through Based
Based
And Costing
Staffing
Staffing Implementation Costing
Distribution
Distribution
Project
Project Inventory Network
Inventory Network
Management
Management Strategy
Strategy Design
Design
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10. Functional Areas of Consulting
REM Associates represents a broad range of business operations skills
and backgrounds . . . .
Resource
Resource
Utilization
Utilization Organizational
Organizational
Operations
Operations Staffing
Staffing
Management
Management
Strategic
Strategic Forecasting
Forecasting
Quality
Quality and Tactical
and Tactical And Product
And Product
Assurance
Assurance Planning
Planning Marketing
Marketing
Financial
Financial Outsourcing
Outsourcing
Analysis and
Analysis and and
and
Evaluation
Evaluation Alliances
Alliances
Information
Information
Systems
Systems
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11. Functional Areas of Consulting
Specifically, within business operations and related functions, we are
experienced in . . . .
Business Operations Management
Sourcing and Purchasing
Forecasting and Sales Planning
Production and Inventory Management
Warehousing & Distribution Operations
Facilities and Network Design
Transportation Operations and Management
Customer Service and Order Processing and Related Systems
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12. Functional Areas of Consulting
We have worked for a number of manufacturers, distributors and
distributor organizations. Our work has included . . . .
n Assessment, evaluation, and planning of business operations functions
n Evaluation of supply/demand chain functions, linkages, and structure
n Assessment of forecasting, demand planning, and inventory manage ment
n Development and positioning of organizational structures to support business
operations functions and processes
n Diagnosis and evaluation of functions and personnel
n Development and specifications of operating systems requirements
n Development of effective performance measurements and benchmarking
n Assistance in implementation of recommendations and changes in operations
directed at cost effective improvements.
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13. Client Industry Profile
REM Associates has worked with manufacturers, wholesalers, and
distributors representing a wide variety of industries . . . .
Consumer Products
Consumer Products Industrial Products
Industrial Products
n Food n Chemical Products
n Retailing n Clay Products
n Mining
n Wholesaling
n Precious Metals
n Pharmaceutical
n Electronics
n Paper
n Newspaper
Manufacturing
Manufacturing
n Tobacco
n Wines, Spirits, and
Service and
Service and
Beverages Industry Associations
Industry Associations
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14. Client Industry Profile
In addition, our work and business relationships have been international
in scope, including government clients and agencies such as . . . .
Our international exposure has included countries such as . . . .
n United Kingdom n Indonesia n Mexico
n India n Russia n Argentina
n Pakistan n China n Panama
n South Africa n Taiwan n Costa Rica
n Malaysia n Philippines n Etc.
Our state, city, public, and local government work has included . . . .
n The State of North Carolina n The City of New York
n The State of Michigan n The University of Missouri
n The County of Los Angeles n Princeton University.
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15. Partial Listing of Clients
A partial listing of our clients for whom we have worked in the past
include . . . . n Honeywell Corporation
n American Stores Corporation n John Morrell and Company
n Anheuser-
Anheuser-Busch companies, Inc. n Kimberly-
Kimberly-Clark Corporation
n Avon Products Company n Kraft Foods Corporation
n Bankers Trust Company n Land O’ Lakes Incorporated
O’
n Becton Dickinson & Company n Lea & Perrins Company
n Ben & Jerry’s
Jerry’ n Leiner Health Products
n Borden Company n Merrill Lynch & Company
n Bristol-
Bristol-Myers Squibb Corporation n Milton Hershey School
n Engelhard Corporation n Nabisco Brands Incorporated
n G A F Corporation n Pepsi-
Pepsi-Cola Incorporated
n General Electric Company n Philip Morris Company
n General Mills Company n Princeton University
n GlaxoSmithKline plc n R. C. Bigelow Tea Company
n Gulf & Western Corporation n Sears Roebuck & Company
n Hermes of Paris n Southland Corporation
n Hewlett-
Hewlett-Packard Company n USA Today
n Hoechst Celanese Corporation n University of Missouri
n Home Base Companies n Warner-
Warner-Lambert Company
n John Hancock Life Insurance Co. n W R Grace & Company
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16. REM Associates Relevant Experience
The scope of our engagements range from single to multiple functions
beginning with assessment and planning through implementation . . . .
n Assessment of existing functions, processes, facilities, and operations aimed at
costs and productivity improvements
n Analysis and evaluation of functions, organization and structure, linkages, and
positioning of supply/demand chain activities to support business goals
n Assessment and evaluation of forecasting , sales planning, and inventory
management to support distribution costs and required levels of service
n Evaluation of customer service functions and activities to determine effective
levels of service based on demand, cost, and business positionin g
n Development of systems requirements and measures to monitor, control, and
manage supply/demand chain activities
n Management of implementation programs to meet timetables and milestones
directed at on time completion.
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17. REM Associates Relevant Experience
A sampling of our client engagements includes . . . .
n For a Major West Coast Pharmaceutical Manufacturer:
– Assessed business operations to:
» Improve product and customer demand forecasting, including promo tional
promotional
activity
» Reduce operational costs of functional activities
» Improve service to all customers, including retail, wholesale, and military
and
» Reduce inventories and related business investments at all level s, including
levels,
raw materials, WIP, and finished goods.
– Results of this work included:
» Inventory reduction of over 35%
» Improved customer service to over 96%
» Increased major customer in- stock position to over 97%
in-
» Reorganized key management functions and responsibilities while
significantly improved communications, decision making, and timeliness of
timeliness
management actions.
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18. REM Associates Relevant Experience
In addition, a sampling of our client engagements includes . . . .
n A Large Consumer Product Company:
– Assessed and evaluated business operations functions, linkages, tasks, and activities
– Developed an integrated business operations strategy directed at reduced costs and increased
customer service levels
– Positioned sourcing, sales, manufacturing, and distribution to effectively support market and
effectively
customer focus
– Evaluated deployment of inventories based on forecasted demand pull to the marketplace in
pull
order to strengthen support services to customers
– Recommended and planned implementation for an integrated supply chain strategy.
n A Fortune 100 Pharmaceutical Company:
– Set up multi-country (14) teams for implementing production and resource planning
multi- planning
– Worked with in-country company teams to implement planned changes
in-
– Evaluated and recommended operations improvements within countries
countries
– Monitored and directed progress toward program goals and objectives
objectives
– Conducted and managed program reviews to make sure timelines wer e met
were
– Completed almost two year program ahead of schedule.
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19. Our Approach to Clients – 1. Assessment
Our initial approach to clients begins with an assessment. In order to
form a solid base of understanding, we determine critical characteristics of
our client’s business in terms of . . . .
n Client operations size and basic structure
n Classes of products, facilities, and customers served
n Key business strategic issues and concerns
n Operations network including sales, distribution, customer service, and related
functions
n Customer service goals and objectives
n Operations goals and objectives.
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20. Our Approach to Clients – 2. Issues and Concerns
In order to focus our response and meet client specific needs, we need to
understand company issues and concerns. For example . . . .
n Present and planned business initiatives
n Specific operations issues:
– Forecasting and sales demand planning
– Inventory management
– Warehousing and Transportation
– Other operations related issues
n Current key projects within operating functions
n Priority, sequence, and timing of implementation of near and longer-
term initiatives.
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21. Our Approach to Clients – 3. Path Forward
As a result of initial meetings, we form an understanding and plan a path
forward in response to your needs, concerns, and plans . . . .
n Goals and objectives of REM Associates assistance
n Structure and content of a proposal to respond to your needs
n Requirement for site and/or functional visits
n Data needed in order to understand and scope the detail of work
n Point person for questions and clarification
n Timetable for decision making and program completion.
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22. Overview of The Business
Operations Strategic Planning
Process

23. Overview of The Business Operations
Strategic Planning Process
The logic of business operations strategy relates directly to the flow of
products, information, and costs through the business and to the
customer . . . .
Sourcing Manufacturing Sales & Distribution Customer
Flows:
Products
Information
Costs
Revenue
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24. Overview of The Business Operations
Strategic Planning Process
There are several levels of business logistics between the product source
and the customer . . . .
Plant Customer
Direct Distribution Large
Chains
Small
Independents
Primary Secondary Tertiary
Sourcing Distribution Distribution Distribution
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25. Overview of The Business Operations
Strategic Planning Process
Strategic planning issues are generally of a broader scope than those of
day-to-day operations issues . . . .
Strategy
Business
Mix
Market
Definition
Operations
Customer Product
& Service
Mix Mix
Mix
Forecast Demand
Service by Class
Facility Service
Characteristics
of Customer
Facility Size
Operations
by Product
Variation
Location
Forecast
Product
Facility
S K Us
Area
Type Uniqueness
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26. Overview of The Business Operations
Strategic Planning Process
The hierarchy of business operations strategic planning begins with
customers and service . . . .
Customer
Customer
Service
Service
Goals and
Goals and
Objectives
Objectives
Inventory Order MIS
Inventory Goals Processing
Equipment
Investment Deployment Strategies and
Programs Investment
Strategies and
Programs
Facilities Warehousing Transportation
Facilities Transportation
Strategies and Strategies and
Investment Equipment
Investment Programs Programs
Investment
MIS Systems and Organization Human
Procedures
Equipment Strategies and Resource
Strategies and
Investment Programs Investment
Programs
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27. Overview of The Business Operations
Strategic Planning Process
A number of factors must be evaluated to determine the best cost and
service mix in a strategic business operations structure . . . .
COST: SERVICE:
§ Number of warehouses § Order processing times
§ Location of warehouses § Customer service
§ Shipment modes § Operations
§ Size of shipments § Transportation
§ Frequency of shipments § Inventory service
§ Stock vs. non-stock
§ Shipment consolidation
§ In-stock position
§ Operating methods § Delivery reliability
§ Storage requirements § Freight consolidation
§ Regulatory requirements holding times
§ Information systems
INVENTORY:
§ Stock vs. non-stock § Frequency of replenishment
§ In-stock position § Transit times
§ Variability of demand § Inventory carrying costs
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28. Overview of The Business Operations
Strategic Planning Process
An effective business operations strategy requires the balancing of
conflicting management objectives . . . .
Impact of Objectives on:
Customer
Logistics Objectives: Inventory: Service: Costs:
n High customer service
n Low warehousing costs
n Low transportation costs
n Reduced inventories
n Fast deliveries
n Reduced labor costs
n Desired results
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29. Overview of The Business Operations
Strategic Planning Process
The planning process must evaluate alternatives and recommend the most
cost and service effective plan for total business logistics . . . .
Product/ Identify
Define Demand
Strategic
Market Chain Operating
Operating
Objectives
Environment Alternatives SCREEN
ASSESS
Develop a Execute
Develop a Develop Preferred
Segmented Set of Business Operating Operations Implementation
Strategic Success Operating Strategy and its
Requirements Objectives Environment Implementation Plan
Identify SCREEN Define
Define Business
Strategic
Operating Strategic
Deployment
Mission
Alternatives Objectives
PHASE I PHASE II PHASE III
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30. ASSOCIATES
MANAGEMENT CONSULTANTS
20 NASSAU STREET, SUITE 244
PO BOX 7345
PRINCETON, NEW JERSEY 08543-7345
Phone: 609-275-4444
Fax: 609-275-5651
E-Mail: bsr@remassoc.com
web: http://www.remassoc.com
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