Desarrollo de una plataforma de innovación a través del modelamiento de
los Indicadores de la Operación.
©2008 Deloitte Chile.Pablo Morales, Rodrigo Rodriguez - Consulting
Contexto – Alineando nuestras acciones según la creación de valor al negocio
– ¿Por cuánto tiempo se mantendrán los altos precios de los Commodities ?
– ¿Que pasará con nuestros márgenes cuando los precios bajen?
– Las condiciones han cambiado, ¿podemos aún explotar las reservas con un margen aceptable?
– ¿Se está midiendo el impacto de las iniciativas o proyectos que tiene laEmpresa?
– ¿Están las iniciativas alineadas con la estrategia de la Empresa?
Tradeoffs claros, eligiendo qué NO hacer
– Sabemos donde focalizarnos pero fallamos en transformar nuestras ideas en proyectos implementables, ¿estamos gestionando adecuadamente nuestros proyectos?
– Contamos con el conocimiento técnico necesario pero ¿está disponible para fomentar la innovación e implantar las iniciativas que genera la organización?
PREGUNTAS COMUNES
©2008 Deloitte Chile.Pablo Morales, Rodrigo Rodriguez - Consulting
Componentes de la Plataforma de Innovación y Mejoramiento de Procesos
• Contar con una plataforma que sustente la generación de iniciativas de innovación para la mejora de los procesos productivos representa un desafío de gran relevancia en la industria minera y de recursos naturales en general.
• Establecer la capacidad local en términos de personas, sistemas y procesos.
©2008 Deloitte Chile.Pablo Morales, Rodrigo Rodriguez - Consulting
Un proceso organizado para establecer el ´”QUE”, el “DONDE” y el “COMO”, paraencontrar, desarrollar e implementar las mejoras.
Idea Filtering & Testing
Idea Sourcing & Root Cause Analyses Tracking & Sharing
Focus on Value
Project Development &Implementation Planning Project Execution & Closure
Value Driver Modelling
EBIT
Revenue
Cash Costs
Tons Sold
Price per Ton
Saleable Tons
Sold:Saleable Ratio
ROM Tons
Yield
Labour
Coal Purchase Raw
Contractors
Overheads
Plant
Engineering
Mining
Other++
Other Costs
X
X
X
־
+High Level Focus Areas
Detail Focus Areas
4%
2%Improvement
Envisaged
Legend
1.5%
Major step change through the BI process
5 Year EBIT View
2008 2009 2010 2011 2012
Base(R115m)100m
200m
300m
400m
500m
Going Rate(R230m)
+ R23m +R46m +R69m+R92m +R115m
+R6.6m
R500m Aspiration
+R6.6m+R7.8m+R15m +R29m
+R29m+R29m
+R14.3m +R14.3m+R14.3m
+R14.3m
GGV ProjectYield Project
Loading ProjectHypothesis
Focus Areas will bedeveloped into
Projects
Can the price of gold be increased?
Can the profitability
of Southstock be raised?
Can the costs be lowered?
Can volumes be raised? Can more
tons be hoisted
Can more tons reach the hoists
Are the carriages operating to capacity?
Can the hoist cycle times be increased?
Can a hoist scheduling system be developed?
Should another hoist be installed?
Targeting identified
volume as a key driver
Can the ore transport improve
Can the more tons be mined?
Is the passage blocked?
Are the trams to slow?
Are the trams full?
Componentes de la Plataforma de Innovación y Mejoramiento de Procesos
©2008 Deloitte Chile.Pablo Morales, Rodrigo Rodriguez - Consulting
Proceso de Modelamiento de Indicadores de Valor
SiloSiloSiloSilo
SiloSilo
SiloSilo
SiloSilo
• EL PROCESO - Detallar flujo de creación de Valor: Identificando los procesos de interés, sus flujos de actividades e indicadores operacionales.
• Esta será la base sobre la cual los procesos operacionales, y habilitadores financieros se relacionarán, Este análisis permitirá la medición de las mejoras en términos financieros.
EJEMPLO
©2008 Deloitte Chile.Pablo Morales, Rodrigo Rodriguez - Consulting
Proceso de Modelamiento de Indicadores de Valor
• Definición de Capacidades, Restricciones y Análisis de Sensibilidad: Esto permite caracterizar los procesos e identificar los cuellos de botella y restricciones de capacidad en éstos. El análisis de sensibilidad permite identificar qué KPI’s tendrán mayor impacto sobre: margen, toneladas, costos y costo por toneladas de producción.
EJEMPLO
©2008 Deloitte Chile.Pablo Morales, Rodrigo Rodriguez - Consulting
• Definición de Capacidades, Restricciones y Análisis de Sensibilidad: Esto permite caracterizar los procesos e identificar los cuellos de botella y restricciones de capacidad en éstos. El análisis de sensibilidad permite identificar qué KPI’s tendrán mayor impacto sobre: margen, toneladas, costos y costo por toneladas de producción.
Proceso de Modelamiento de Indicadores de Valor
EJEMPLO
©2008 Deloitte Chile.Pablo Morales, Rodrigo Rodriguez - Consulting
Proceso de Modelamiento de Indicadores de Valor Relacionando los KPIs financieros con los KPIs operacionales
Árbol de KPIs: Relacionando los márgenes actuales con la estructura de costos y los drivers económicos obtendremos los KPI financieros. Esta herramienta sirve para hacer análisis de las opciones y cuantificar el impacto de las iniciativas de mejoramiento.
Value Drivers
Examples
• Price• Tonnage• Customer mix• Yields
• Capital investment• Cash balances• Debtor/creditor
changes
Value
Revenue
VariableCosts
FixedCosts
FixedAssets
WorkingCapital
Drivers Financieros Drivers Operacionales
BalanceSheet
Profit & Loss
Capital(Net Assets)
Return(EBIT)
Examples
• Price discounts• Product mix• Sales
cost/customer• Down time
• Equipment availability
• Capacity utilisation• Payment terms
EJEMPLO
©2008 Deloitte Chile.Pablo Morales, Rodrigo Rodriguez - Consulting
Proceso de Modelamiento de Indicadores de Valor Relacionando los KPIs financieros con los KPIs operacionales
Árbol de KPIs: Relacionando los márgenes actuales con la estructura de costos y los drivers económicos obtendremos los KPI financieros. Esta herramienta sirve para hacer análisis de las opciones y cuantificar el impacto de las iniciativas de mejoramiento.
EROC
Revenue
Costs
Net Assets
Price (per product)
Tonnage (per product)
Mining
Processing
Transport & Royalties
Net Fixed Assets
Working Capital
Rehabilitation
General & Overheads
Provisions
Equipment Item(eg. CAT 789Dump Truck)
Operating Costs
Capital
Tonnage
Equipment
Services
LabourWaste Removal
Coal Mining
Mining Overheads
EJEMPLO
©2008 Deloitte Chile.Pablo Morales, Rodrigo Rodriguez - Consulting
Proceso de Modelamiento de Indicadores de Valor Relacionando los KPIs financieros con los KPIs operacionales
Árbol de KPIs: Relacionando los márgenes actuales con la estructura de costos y los drivers económicos obtendremos los KPI financieros. Esta herramienta sirve para hacer análisis de las opciones y cuantificar el impacto de las iniciativas de mejoramiento.
Complex EBIT
Colliery 1 EBIT
Colliery 2 EBIT
Colliery 3 EBIT
Revenue
FOB Cash Costs
Other Costs
Revenue
FOB Cash Costs
Other Costs
Revenue
FOB Cash Costs
Other Costs
BC Signed Off $ 10m
BC In Progress $ 7m
VP’s $ 3m
Implementation $ 3m
Colliery 1 $ 23m
Colliery 2 $ 20m
EBIT Contribution of all VP’s, Business
Cases and signed off is equal to $ 43m
BC Signed Off $ 7m
BC In Progress $ 6m
VP’s $ 3m
Implementation $ 2m
EJEMPLO
©2008 Deloitte Chile.Pablo Morales, Rodrigo Rodriguez - Consulting
• Property, Plant & Equipment
• Inventory• Receivables & PayablesComo se crea el Valor
(Value Drivers)
Qué se puede hacer(Improvement Levers)
Cambiar la forma de hacer las cosas (Estrategia)
• Que se está vendiendo o entregando• A quien se apunta• Como competir• Como se gastan los recursos• Qué operaciones se externalizan
Hacer las cosas mejor (Tácticas)• Governancia• Procesos de negocios• Colaboración intra- e inter-compañías• Clientes, empleados y otros stakeholder• Recursos/Activos• Desarrollo de capacidades estratégicas
Shareholder Value
• Volume• Price Realization
Revenue Growth
• Selling, General & Administrative Costs
• Cost of Goods Sold• Income Taxes
Operating Margin(after taxes)
Asset Efficiency
• Company Strengths• External Factors
Expectations
Enterprise Value Map™ es un marco de trabajo que enlaza el valor para los accionistas a las diferentes iniciativas que una empresa puede hacer para mejorarlo. Entrega una ruta entre:
Estrategia y tácticasQue puede ser hecho y comoLas ganancias y el balanceLa capacidad organizacional y la ejecución operacionalEl desempeño actual y el desempeño futuro
Optimize depreciationmethods/lives forproperty, plant andequipment
Optimize valuationand costing methodsfor inventories(LIFO, FIFO, unifo rmcapitalizat ion, shrinkage,obsoles cence, etc. )
Ensure full util izationof tax carryforwards(credits, ne t opera tinglosses, capita l losses, etc.)
Consider tax implica-tions in the location/selection of facili ties(d istribut ion centers, servicecenters, branches, e tc.)
Improve salesforecasting andcampaign executionprocesses and tools
Improverelationship/accountdevelopmentprocesses
Improve skills ofsales staff
Provide staff withbetter customerinformation(demographics, inqu iryhistory, e tc.)
Improve staffincentives aroundsales efficiency
Improve processesfor generating,qualifying andassigning leads
Improvefield sales andtelesalesprocesses
Consol idate/realignsales terr itories
Improve terms withsales channels
Improve terms withservice providers(network services, airlines,information services, etc.)
Improve terms onleased sales assets(computers, veh icles, e tc.)
Target newgeographies
Target new segmentswithin currentgeographies
Expand sales andadvertising channels
Acquire new produc tand service offerings
Pursue joint-venture,partnership and OEMarrangements
Increase focus onhigh-value/high-potential customers
Increase focus onmost profitableproducts and services
Increase focus onmost effective salesand advertis ingchannels
Improve brandstrength and good wi ll
Increase time spentselling
Improve quality andassignment of salesleads
Improve access toinformation andanalytical tools
Improve sales andmarketing skills ofstaff
Improve al ignment ofstaff incentives withstrategic objectives
Improve effectivenessof marketing,advertising and salesprocesses
Tailor marketing andsales approaches tocustomer segments
Tailor products andservices to newcustomer segments
Evolve product andservice features,functionali ty and value
Improve totalcustomer experience(purchasing, fulf illment ,usage, support, service ,e tc.)
Increase focus onhigh-value/high-potential cus tomers
Improveresponsiveness tocustomer complaints/feedback
Improveunderstanding ofcustomer needs
Proactively managetransition points(life events, ends ofcont racts and leases, etc.)
Tai lor accountmanagementapproaches tocustomer segments
Maintain competitivefunctionality and value
Tailor c ross-sell/up-sell offers to customerneeds
Implement pricing andaffini ty programsbased on volume andbreadth
Offer value-addingproduct and servicebundles
Improve effectivenessof cross-sell /up-sellprocesses
Implement proactiveand reactive c ross-sell and up-sel lcampaigns
Improve staffincentives for cross -selling/up-sell ing
Improve identificationof cross-sell /up-sellopportunities
Increase focus onhigh-value/high-potential customers
Increase focus onmost profitableproducts and services
Increase focus onmost effec tive salesand advertis ingchannels
Improve retention andwin-back processes
Bui ld customersatisfaction andretention into staffincentives
Improveunderstanding ofchurn/defectiondrivers
Improve identificationof churn/defec tioncandidates
Increase focus onhigh-value /high-potential customers
Improvecompeti tiveness ofproduct and serviceofferings
Shorten time-to-market
Improve brandawareness / Elevatebrand image
Increase emphasison supply chainmanagement(production , d ist ribution andsa les p ipe lines)
Obtain exclusiveagreements withpartners(licenses, distribu torsh ips,e tc.)
Improve features andfunc tionality ofproducts and services
Improve quality andreliabili ty of productsand services
Improve product andserv ice l ifecyclemanagement
Improvecommunication andcoordination w ithdistr ibution centers
Improvecommunication andcoordination w ithsales channels
Improve focus onhigher-valuesegments
Rationalize and/orrefocus channel/media usage
Rationalize and/orrefocus product andservice portfol ios
Rationalize targetedcustomer segments
Improve campaigndesign andmanagementprocesses and tools
Improve skil ls ofmarketing staff
Improve staffincentives aroundmarketing efficiency
Provide staff withbetter market andcustomer information
Improve definition ofproduct and servicespec ification
Improve product andservice launchprocesses
Provide staff withbetter competi tiveinformation
Improve tai loring ofmarketing andadvertisingapproaches tocustomer segments
Improve terms w ithadvertising channels
Improve terms w ithservice providers(researchers, informationservices, advert isingchanne ls, etc.)
Improve emphasis onproduc t qual ity andease of service
Design products forease-of-use / self-service
Route low-valuetransactions to lower-cos t sales channels
Improve routing ofservice requests toappropriate staff
Increase use of lower-cos t service andinformation channels(contact centers, au tomatedvoice response, web, e tc.)
Improve workforceplanning and dispatchprocesses and tools
Improve capac ity/demand planningprocesses, skil ls andtools
Improve service andsupport processes
Improve skills ofservice staff
Prov ide staff w ithbetter cus tomerinformation(profiles, transact ionhistories, e tc.)
Improve incentivesaround serviceeffic iency andeffectiveness
Improve terms withservice prov iders(network services,outsourced functions, etc. )
Improve terms onleased service assets(computers, vehicles, etc.)
Improve forecas ting,planning andprioritization ski lls andtools
Improve creditanalysisprocesses
Improve sk ills of ordermanagement andbil ling staff
Provide staff w ithbetter customer andorder information
Improve incentivesaround ordermanagementefficiency
Improve pick, packand ship processes
Improveprovis ioning/ins tallation processes
Improve invoicing/bil ling processes
Improve pol icies andprocesses aroundmerchandise returns
Improve terms withservice providers(delivery services,outsourced functions, e tc.)
Improve terms onleased assets(computers, vehicles, etc .)
Consol idate and/orre-architect datastores
Inc rease uti lization ofIT, telecom andnetwork resources(servers, routers, networkcapacit y, e tc.)
Improve design,development andtes ting processes
Improve processes formanaging systemoperations, mainten-ance and changes
Improve end-usersupport andadministrationprocesses
Improve selection,acquisi tion andcontractingprocesses
Improve installation/deploymentprocesses
Improve technical andprojec t managementski lls of staff
Improve dispatch,diagnostic, resolutionand replacementprocesses
Improve incentivesaround IT/networkefficiency
Improve terms w ithservice providers(contractors, networkservices, consu ltants, e tc.)
Improve terms onpurchased and leasedassets (PCs, servers,network equ ipment , leasedlines, e tc.)
Improve terms onpurchased and leasedreal estate, furnitureand fixtures
Increase util ization ofreal estate
Improve capac ity/demand planningprocesses and tools
Improve real estatedesign and develop-ment processes
Improve operationalprocesses(administrat ion, securit y,energy, HVAC andmaintenance)
Improve real estateselec tion, acquisitionand contractingprocesses
Improve real estateimprovement anddeploymentprocesses
Improve terms withservice providers(s ecurity, energy, etc.)
Improve terms onimprovements(HVAC, c abling, etc. )
Improve terms withthird-party productand serv ice providers(payroll, benef it s, tra in ing,etc)
Reduce salary andbenefits costs /Improve value ofemployee benefits
Improve capacity/demand planningprocesses and tools
Implement/improvecompany-wideprocesses and toolsfor assessing staffperformance
Improverecruitment andorientation processes
Improve sk ills of HRstaff
Provide staff w ithbetter HR informationand tools
Improvetrainingprocesses
Improve salary andbenefits administra-tion processes /Increase employeeself-service
Improvepayrollprocesses
Improveperformanceassessmentprocesses
Rational ize/consolidate vendorportfol io
Increase focus onhigher-value vendorpartnerships
Improve collaborationwith vendors
Increase use of lower-cost channels(se lf -service , e tc.)
Improve assignmentof procurementtransactions toappropriate s taff
Improve demandplanning processesand tools
Improve productprocurementprocesses(equ ipment , supplies, e tc.)
Improve serviceprocurementprocesses(travel, cont ract labor, etc. )
Improve contractingand negotiation skillsof procurement staff
Provide staff withbetter product andservice information
Improve incentivesaround procurementefficiency
Improve terms onequipment andsuppl ies
Improve terms withservice providers(equ ipment maintenance,delivery, warehousing, etc. )
Improve terms w ithservice providers(information services,consu ltants, e tc.)
Improvestrategic planningprocesses
Improve skil ls ofbus inessmanagement staff
Provide s taff withbetter managerialinformation and tools
Improve incentivesaround businessplanning efficiency
Improveprogram planningprocesses
Improve capitalbudgetingprocesses
Improveprogrammanagementprocesses
Improveaccounting andmeasurementprocesses
Improve terms w ithfinancial servicesproviders
Improvecash/treasurymanagementpractices
Improve skills offinancial managementstaff
Improve incentivesaround financialmanagementefficiency
Improve debt andequity managementprocesses
Increase focus onmaterials-efficientproductionmechanisms
Rationalize and/orrefocus productportfolio
Increase emphasis ondesigning formaterials efficiency
Rationalize/consolidate vendorportfolio
Focus efforts onhigher-value vendorrelationships
Improve terms onmaterials purchases
Rationalize orderquantities and timing
Improve materialsperformancemanagementmethods and tools
Improve demandforecastingprocesses, ski lls andtools
Improve ordering andreceipt processes(raw materials, in termedia tematerials, finishedcomponents, etc.)
Improve materialseffic iency ofproduction processes
Improve contractingand negotiation ski llsof purchasing staff
Prov ide staff w ithbetter produc tinformation and tools
Design products touse cost-effectivematerials
Improve terms withservice providers(delivery, warehousing, etc. )
Rationalize and/orrefocus productportfolio
Improve focus onhigher-value products
Rationalize productionquantities and timing
Inc rease use of lower-cost produc tionchannels
Improve terms withservice providers(outsourced functions, e tc.)
Improve termson equipmentpurchases
Improve productionperformancemanagementmethods and tools
Improve demandforecastingprocesses, ski lls andtools
Improve capac ityplanning processes,skil ls and tools
Improveproduction schedulingand stagingprocesses
Improve util ization ofproduction channels /Reduce downtime
Improve skills ofproduction staff
Provide staff w ithbetter productioninformation and tools
Improve incentivesaround productionefficiency
Improve coordinationwith businesspartners
Improvemanufacturing andquality controlprocesses
Rationalize and/orrefocus productportfolio
Rationalize/consolidate vendorportfolio
Improve focus onhigher-value vendorrelationships
Improve terms onmerchandisepurchases
Rationalize orderquanti ties and timing
Improvemerchandis ingperformancemanagementmethods and tools
Improve demandforecastingprocesses, sk ills andtools
Improve assignmentof transactions toappropriate staff
Improvemerchandiseordering and receiptprocesses
Improve skil ls ofmerchandis ing staff
Provide staff withbetter information andtools
Improve incentivesaround merchandisingefficiency
Improve coordinationwith vendors
Improve terms w ithservice providers(de livery, warehousing, e tc.)
Rationalize and/orrefocus produc tportfol io
Increase emphasis ondes igning andpackagingfor distribution
Inc rease quality andconsistency ofmaterials
Rationalize productionquantities and timing
Rationalizemerchandise orderquantities and timing
Increase use of lower-cost logistics anddistr ibution channels
Improve inventoryreceipt and s torageprocesses
Improve transport anddel ivery processes /algorithms
Improve ski lls ofinventory anddistr ibution staff
Provide s taff withbetter information andtools
Improve incentivesaround inventory/distr ibution efficiency
Improve logisticsperformancemanagementmethods and tools
Improve demandforecastingprocesses, skills andtools
Improve terms w ithserv ice providers(transport, warehousing,e tc.)
Improve focus onhigher-value customersegments andproducts
Rationalize and/orrealign productdevelopmentefforts
Inc rease use of lower-cost produc tdevelopmentchannels
Improve produc tconception/initiationprocesses
Improve util ization ofproduct developmentchannels
Improve skills ofproduct developmentstaff
Improve definition ofproduct and servicespecifications
Improve incentivesaround productdevelopmentefficiency
Improveprototyping, pilotingand testing processes
Improvedesign anddevelopmentprocesses
Improve identificationand discontinuation ofunsuccessfulefforts
License or acquireproducts andintel lec tual property
Develop businessmodels w ith low realestate requirements
Reduce number ofdata centers, branchoffices, dealerships,retail outlets , etc.
Outsource businessfunctions
Increase use ofleased real estate
Improve termson property andfaci lities
Reconfigure facili ties /Increase util ization offaci lities
Increase use offlex ible facili ties
Divest low-util izationreal estate
Rational ize and/orrefocus product andservice portfolios
Outsource bus inessfunctions
Increaseuse of leasedproduction equipment
Improve terms on ITsystems
Increase use offlexible/expandableproduction equipment
Increase emphasis ondesign formanufacturability andservice
Divest low-utilizationequipment
Improveeffectiveness of plantmaintenance
Improve termson infrastructure
Divest low-util izationinfras truc ture
Increaseuse of flexible andexpandableinfras truc ture
Increase use ofleased infrastructure
Rationalize and/orrefocus productportfolio
Rationalize and/orrefocus customersegments anddistribution channels
Develop low-Inventorybusiness models
Increase emphasison build-to-order
Improve terms onmerchandise
Improvecol laboration withvendors/partners
Improvedemand forecas ting
Consolidateinventory
Improve logistics/distribution effic iency
Divest low-demand/obsolete inventory
Rational ize and/orrefocus productportfolio
Shorten productioncycles
Rational ize rawmaterials
Increase use of just-in-time procurement
Improvedemand forecasting
Improve terms onmaterials
Divest obsoletematerials
Coordinatemanagement ofcredit/receivablesacross business units
Increase focus oncustomer segmentswith low credit/loanneeds
Tighten credit/loanterms
Improve assessmentand benchmarking ofcredit/receivablesperformance
Improve managementof delinquentaccounts
Coordinatemanagement ofpayables acrossbusiness units
Leverage credit ratingto lengthen paymentcycles and reduceinterest rates
Leverage breadth ofvendor relationshipsto lengthen paymentcycles
Improve managementof debt portfolio
Improve identi ficationand prediction ofindustry and markettrends
Improve identi ficationof opportunities andthreats
Improve strategydevelopment capa-bi lities at corporateand business-unitlevels
Improve alignment ofbudgets and capitalprograms w ithstrategic priori ties
Improve executivedevelopment,recruiting andsuccess ion planning
Improve identi fication,assessment andexecution ofM&A/divestitureopportunities
Improvecommunication ofstrategic directionsand priorities
Improve structuringand launch ofcohes ive programportfol ios
Improve coordinationand communicationacross programs andprojects
Improve program/project managementmethods and tools
Improve alignment ofprojects with programand bus inessobjectives
Improvemeasurement andreporting ofoperational andfinancial performance
Improve analysis ofmanagerialinformation
Improve focus onmost importantmanagerialinformation
Improvecommunicationaround improvementpriori ties
Improve abili tyto launchimprovement efforts
Improve quality andcons istency ofperformanceassessment methods
Improve careeroptions and paths
Align managementand staff incentiveswith companyperformance
Improve monetaryand non-monetaryrecognition of staffcontributions
Improve breadth,depth, quali ty andtimel iness of perform-ance information
Improve effec tivenessof organizationalstructures andgovernance models
Increase emphasis onquality managementand benchmark ing
Improveprocess innovationskil ls of staff
Improve depthand breadth of stafftechnical skil ls
Improve qualityand speed ofcommunication withpartners
Improve abi lity tointegrate mergedand acquiredorganizations
Improve abi lity toidenti fy and assesspartneringopportunities
Improvemanagement ofpartner relationships
Improve integration ofbusiness processesacross partnernetworks
Improve valuedelivered tocustomers
Improve valuedelivered to partners(vendors, channe l partners,e tc.)
Improve valuedelivered toemployees
Improve identificationof opportunities toincrease value tostakeholders
Improve understand-ing of stakeholderinterests (customers,shareholders, regula tors,employees, suppliers,partners, a lumni, e tc.)
Improve convers ion ofstrong relationshipsinto sources of com-peti tive advantage
Improvecommunication withstakeholder groups
Improve agil ity andflexibili ty oforganizationalstructures
Improve agil ity andflexibili ty ofgovernance models
Improve flexibilityof businessprocesses
Improve versatility ofmanagers and staff
Improve flexibilityand versatility of ITsys tems andplatforms
Rational izecustomer portfolio
Improveresponsiveness tocustomer requestsand inquir ies
Improve tracking ofcustomer interactions(purchases, supportrequests, etc.)
Improve identificationof valuable customerrelationships
Refocus and/or refineretention priorities andstrategies
Create barriers toswitching
Sol icit and respond tocustomer feedback
Implement affinityprograms
Increase emphasison differentiatedproducts and services
Improve demandforecasting
Improveunderstanding ofcustomer, productand channelprofitabili ty
Consolidate oroutsource serv ice andsupport operations
Differentiate servicetreatment ofcus tomers/segments
Prov ide staff w ithbetter produc t andservice information
Improve financialrisk managementprocesses
Increase use of lower-cost del ivery/ins tallation channels(se lf-servic e, partners, etc. )
Increase use of lower-cost bill ing channels(automated, self-service,etc. )
Differentiate treatmentof customers/segments
Improve emphasis ondesign for pack ing/shipping efficiency
Consolidate oroutsource orderfulfil lment functions(p ic k, pack and sh ip ,insta ll, provision , e tc.)
Consolidate oroutsource billingoperations
Consol idate oroutsource design,development anddeployment serv ices
Consol idate oroutsource operationsand maintenanceservices
Consol idate oroutsource end-usersupport
Consolidate companyreal estate/facili ties
Consolidate oroutsource design anddevelopmentfunctions
Rationalize ITapplication portfol io
Consolidate oroutsourceimprovement anddeployment
Consolidate oroutsource propertymanagementfunctions
Increase use of lower-cost real estate andfaci lities / Relocatebusiness operations
Consolidate oroutsource benefi tsadminis trationfunctions
Consolidate oroutsource payrol lfunctions
Consolidate oroutsource recruitmentfunctions
Refine vendors trategies
Standardize productcatalogs(equ ipment , of fice supplies,promotiona l materials, etc. )
Consolidate oroutsourceprocurement func tions
Consolidate and/oralign businessplanning,management andreporting functions
Improve al ignment oforganization struc-tures and governancemodels with businessstrategies
Consol idate and/oralign financialplanning,management andreporting functions
Consol idate and/oralign financialaccounting andanalysis functions
Improve incentivesaround procurementeffic iency
Inc rease emphasis ondesign for productionefficiency
Consolidate oroutsource productionfunctions
Refine/alignlogistics anddistr ibution strategies
Increase focus onhigher-value productsand partners
Consolidate/outsource logis ticsand distributionfunc tions
Rationalize and/orrefocus product andservice portfolios
Consol idate oroutsource productdevelopmentfunctions
Inc rease emphasis onmodular, extensible,scalable designs
ConsolidateIT systems,production lines andservice mechanisms
Increase emphasis onhigh-turn products
Increase emphas is ondesigning formanufac turingefficiency
Improvecol laboration withvendors /partners
Increase emphas is ondesigning formaterials effic iency
Inc rease focus onvendors withfavorable paymentterms
Increase emphas ison risk-informed,scenario-basedplanning
Increase emphasis onenterprise-wideprogram planning andcollaborative programdelivery
Increase emphasison continuous,proactive perform-ance management
Improvedetermination of keyperformance metricsand targets
Es tablish a culturecentered onoperationalexcellence
Increase focus onpartnership, mergerand acquis itionopportunities
Increase focus onstakeholderrelationships
Es tablish processimprovement andinnovation as keycompetencies
Establ ishmanagement of keystakeholderrelationships asorganizational priori ty
Increase focus onbus iness agi lity andflexibili ty
Establish agility andflexibili ty as keycompetencies
Increase integration ofbusiness processesacross organizationalboundaries
Improvepartnership andcol laboration skil ls ofstaff
Improve util ization ofsales staff
Improve utilization ofservice staff
Provide staff withbetter product, serviceand competitiveinformation
Implement integratedapplications acrossorganizationalboundaries
Consol idate IT ,telecom and networkequipment andfac ilities
Utilize moreefficient produc tionequipment
Improve quality andconsistency ofmanufacturingmaterials
© 2004. All rights reserved. Confidential. 0104
Improve value /Decrease prices
Improve assessmentand benchmark ing ofbusiness processperformance
Improve sharing ofknowledge acrossorganizationalboundaries
Improve sharing ofknowledge ac rossorganizationalboundaries
Improve businesscontinuity planningand disaster recoverycapabi lities
Improve ability todevelop and spin-offnew bus inesses
Increase focus on riskmanagement andregulatory compliance
Improve focus onprice-insensitivecustomer segments
Increase emphasis ondifferentiated pricingacross customersegments
Improveunderstanding ofcustomer pricesens itivity
Align advertising withpric ing strategies
Improve tai loring ofofferings to customerneeds
Increase use ofdifferential pricingmechanisms (based oncustomer va lue, risk, e tc.)
Increase emphasison preventiveequipmentmaintenance
Defer/change timingof capital investments
Increase utilization ofproduction equipment
Increase focus onmanagerial, forward-looking information
Improveunderstanding ofproduct/service valueto customers
Increase focus onpricing effectiveness/price optimization
Inc rease focus onR&D, productinnovation, andproduct leadership
Broaden product andservice offerings
Improve produc t/service R&Dand deploymentcapabilities
Adapt currentproducts and servicesfor new segments/channels
Improve produc t- andservice-innovationski lls of staff
Inc rease emphasis onservice prevention /Reduce need forservice
Inc rease emphasis ondesigning for serviceefficiency and self-service
Route low-valuetransactions to lower-cost sales channels
Improve routing ofservice requests toappropriate servicechannels
Inc rease use ofcheaper serv icechannels
Improve serviceperformancemanagementmethods and tools
Improve workforceplanning, dispatchand ass ignmentprocessesand tools
Improve capacity/demand planningprocesses, ski lls andtools
Improve service andsupport processes
Improve skills ofservice staff
Provide staff withbetter customerinformation(profiles, transac tionhistories, e tc.)
Improve staffincentives aroundservice efficiency
Improve terms withservice providers(outsourc ed services,network services,information services, etc.)
Improve terms onleased service assets(computers, veh icles, e tc.)
Consol idate oroutsource serviceoperations
Differentiate treatmentof customers/segments
Provide staff withbetter product, serviceand contractinformation
Rationalize and/orrefocus servicesoffered
Improve util ization ofservice staff
Improve focus onhigher-value customerrelationships
Convert free servicesto fee-based services
Align product andservice prices w ithvalue to cus tomers
Establish product,service and processinnovation as keycompetencies
Improve productinnovation processes
Improve product,service and processinnovation sk ills ofstaff
Improve assignmentof accountabi lity andauthority
Improve effectivenessof organizationalstructures
Dynamically cancel orredirect ineffective/obsolete programsand projects
Improve tracking andcommunication ofprogram/projec tprogress
Improve assignmentof resources toprojects
Improve program/project managementskills of staff
Improve managementof vendors/serviceproviders
Establ ish program/project delivery as akey competency
Improve alignment ofcus tomer, product,advertising, sales,service, support, andfulfi llment strategies
Develop, spin-off andsel l new bus inesses
Improve investmentreturns on cash/treasury funds
License or sellintellectual capital toother enterprises
Improve brandstrength and good wi ll
Improve brandstrength and good wil l
Sell appreciatedassets
Increase emphas is ongenerating revenuefrom company assets
Increase focus ondeveloping andprotecting intel lec tualcapital
Increase focus oncreditworthy customersegments
Improve col lectionsprocesses
Improve andstandardize c reditassessmentprocesses
Differentiate credittreatment ofcustomers/segments
Improveunderstanding ofcustomer needs
Increase focus onexpansion ofcustomerrelationships
Improve product andservice w ithdrawaland retirementprocesses
Acquire competitors
Improveestablishment of andadherence to service-level targets
Increase use ofdis tance/on-linelearning
Establish customercommunities
Improve cross-sel land up-sel lapproaches/models
Apply brand to newand unbrandedproducts
Develop and leveragestrong/unique partnerrelationships
Develop and leveragestrong brand
Develop strongcustomerrelationships andcommunities
Develop and uti lizeunique physicalresources(facilities, land, etc. )
Develop and uti lizeunique humanresources(thought leaders, managers,sub ject matter experts, etc. )
Develop and leverageintel lec tual capital(copyrights, pa tents,trademarks, etc. )
Inc rease focus onstrategic assets
Improve assetdevelopment skil ls ofmanagement andstaff
Improve incentivesaround assetdevelopment
Establishdevelopment ofstrategic assets as akey competency
Inc rease emphasis onleveraging strategicassets
Shorten productioncycles
Improve developmentand analysis ofbusiness cases
Improve securi ty ofapplications, sys temsand data
Improve cos taccounting andallocation of shared/overhead costs
Improve rec ruitingeffectiveness
Improve relationshipmanagementstrategies for keystakeholder groups
Improve valuedelivered toshareholders
Rationalize and/orrefocus product andservice portfolios
Rationalize and/orrefocus product andservice portfolios
Improve physicalsecurity of people
Improvecommunication andknowledge transferacross organizationalboundaries
Consolidate oroutsource learningand developmentfunctions
Increase emphasison people/talentdevelopment
Improve talentmanagement modelsand programs
Improve identificationof stakeholder groupsand establishment ofpriorities
Improve valuedelivered to otherstakeholders(public, alumni, analysts,e tc.)
Shorten order-to-del ivery cycle time /Improve product andservice availabi lity
Inc rease emphasison design forconfigurabi lity/customization
Improve platform andportfolio strategies forproducts and services
Inc rease emphasis ontime-to-market andtime-to-production-volume
Inc rease number andquality of produc t andservice launches
Inc rease uti lization ofmodular, reusabledesigns
Improve col laborationwith design,development andproduction partners
Improve reuse ofproduct and servicecomponents
Improve managementof product li fecyc les(launch through ret irement)
Increase emphasis onaccount/relationshipdevelopment
Improve accountmanagement skills ofs taff
Improve incentives forproduct developmentand innovation
Improve incentives foraccount/relationshipdevelopment
Improve accountmanagements trategies
Shorten order-to-del ivery cyc le time /Improve product andservice availabi lity
Improve totalcustomer experience(purchasing, fu lf illment ,usage, support , service ,e tc.)
Improve execution ofmarket- and supply -driven promotions
Improve structuringand pricing ofpromotions
Improve coordinationwith suppliers andsales channels
Improve use ofsupply - and capacity-driven promotions
Increase use ofpromotions
Rationalize and/orrefocus product andservice portfol ios
Improve focus onsegments with loweraverage cost-to-serve
Improve col laborationwith partners andcustomers
Increase use ofvendor-managed/vendor-warehousedinventory
Improve due-daterel iabil ity
Manage procurementon a national/globalbasis
Utilize national/globalpurchasing power
Increase focus oncomponent reuse
Reduce procurementcycle times
Improve collaborationwith vendors
Improve design/structure ofdistr ibution networks
Align produc tion andmerchandise orderingschedules withdistr ibution schedules
Improve retrievalprocesses
Manage purchas ingon a national/globalbasis
Refine and/or alignmerchandis ingstrategies(central vs. loca lmerchand ising, etc.)
Improve use ofnational/globalpurchasing power
Increase use ofvendor-managed/vendor-warehousedinventory
Increase use ofvendor-managed/vendor-warehousedinventory
Increase use ofvendor-managed/vendor-warehousedinventory
Improve produc t andservice introduction/launch processes
Rationalizeproduc tion fac ilities
Rationalize productionquantities and timing
Rationalizemerchandise orderquantities and timing
Increase use ofvendor-managed/vendor-warehousedinventory
Rational ize produc tionquantities and timing
Increase emphas is onuse of commoncomponents
Increase utilizationof standardizedcomponents
Manage materialssourcing on anational/global basis
Increase use ofvendor-managed/vendor-warehousedinventory
Increase emphasis oncustomer retention
Proactively managetransition points(lif e events, ends o fcontracts and leases, e tc.)
Offer value-addingproduct and servicebundles
Improve focus onemployee retention
Improve employeeretention programs
Utilize more efficientIT systems
Utilize moreflexible/expandable ITsystems
Improve maintenanceof IT systems
Increase utilization ofIT systems
Divest low-utilizationIT systems
Improve terms onproduction equipment
Improve focus ofcompany resourceson high-priori tyinitiatives
Increase emphasis oncross-business -unitand c ross-companycol laboration
Increase proactivepursuit ofpartnerships, mergersand acquis itions
Increase emphasis oncustomer satisfaction
Improve qualityassurance programs
Sell or lease excesscapac ity to otherenterprises(production capacit y, servicecapacity, etc. )
Coordinate pricing ofcomplementaryproducts and services(razors v. blades / p roduct v.sh ipping charges, etc. )
Improve price/marginknowledge of staff
Bui ld productmargins/profitabili tyinto sales incentives
Rationalize portfolio offinancial servicesproviders
Improve audit andcompliancemanagementprocesses
Improve businesscase developmentand analysisprocesses
Improve breadth,depth and quality offinancial information(asset, budget, price/cost,treasury, debtor/credito r,performance, tax, risk, etc.)
Improve budgetingand forecastingcapabilities
Improve financialreporting efficiency
Improve assetmanagementprocesses(fixed and variab le assets)
Improve integration ofIT systems acrosspartner networks
Increase emphas is onoperational integrationwith partners
Remove barriers toswitching
Improve contractmanagementprocesses(negotia tion , execution andcompliance)
Refine vendor/supplier s trategies
Consol idate oroutsourcemerchandis ingfunctions
Establishcross-companycol laboration as a keycompetency
Improve performanceand rel iabil ity of ITsystems/platforms(app lica tions, equ ipment,networks, e tc.)
Improve breadth,depth, quality andtimeliness of businessinformation
Improve access toand distr ibution ofbusiness information
Develop and uti lizeunique IT resources(applications, networks, e tc.)
Improveunderstanding ofcurrent customersatisfaction
Improve visibi lity ofcustomerrelationships andinteractions across allchannels
Improve adherence tocontracts andagreements
Increase focus onhigher-value produc tsand services
Improve focus onhigher-valueadvertising channels/media
Focus sales efforts onhigher-marginproducts and services
Inc rease use of lower-cost sales channels(telesales, outlets, se lf -service, etc.)
Improve focus onhigher-valuecustomers/segments
Rationalize and/orrefocus product andservice portfolios
Bypass currentchannels / Selldirectly to customers
Rationalize targetedmarkets and customersegments
Improve analyticalprocesses and tools
Improve channelmanagementprocesses and tools
Outsource propertytax administrationac tivities(c ompliance, assessment,negotiations, etc .)
Improve businessperformance reportingprocesses
Improve alignment ofHR and technologystrategies withbusiness strategies
Improve manage-ment of regulatorycompliance
Develop and leveragepoli tical relationshipsand al liances
Develop and cultivategood w ill
Improve anticipationand understanding ofcurrent and potentialregulations/legislation
Improve effec tivenessof legislative/lobbyingefforts
Acquire companies intargeted geographies
Acquire companieswith relationships intargeted customersegments
Improve methods andtools for managingsales and marketingperformance
Acquire companiesaligned w ith productstrategies
Improve methods andtools for managinginnovationperformance
Increase focus ondivestiture andreinvestment
Divest non-performingand non-s trategicbusiness units
Align M&A s trategieswith bus inessobjectives
Improve/standardizeM&A processes
Improveunders tanding ofinternal value andmarket value ofbusiness units
Increase considera-tion of M&A anddivesti ture options
Improve accountmanagementmethods and tools
Improve salesperformancemanagementmethods and tools
Improve retentionperformancemanagementmethods and tools
Improve managerialmethods and tools
Improve methods andtools for managingdemand/supplyperformance
Improve methods andtools for managingpricing performance
Improve marketingand advertisingperformancemanagementmethods and tools
Improve salesperformancemanagementmethods and tools
Improve service andsupport performancemanagementmethods and tools
Improve ordermanagementmethods and tools
Improve procurementperformancemanagementmethods and tools
Improve real estateperformancemanagementmethods and tools
Improve HRperformancemanagementmethods and tools
Improve/consolidateIT performancemanagementmethods and tools(utilizat ion, performance,capacit y plann ing, etc .)
Improve produc tdevelopmentperformancemanagementmethods and tools
Improveunderstanding ofbusiness unitperformance andmarket values
Consol idate devicemanagementinformation and tools
Improve al ignment ofcapital budgets andprogram plans withbus iness priori ties
Improve al ignment ofbus iness unitstrategies w ithenterprise strategies
Improve al ignment offinancial strategieswith corporatestrategies
Strengthenenterprise-w idefinancial reportingstandards
Increase focus onbusiness insight andforward-lookinginformation
Improve integration ofshort- and long-termbusiness planning
Improve leadershipand managementskills of executives
Increase emphasis oncontinuous , proactivemanagement ofinvestment portfolios
Improve vendormanagement skills ofs taff
Improve involvementof operational staff inproject delivery
Improveaccountabi lity/authority of programand project resources
Improve effectivenessof program/projectgovernance models
Increase focus on keyperformance metrics
Increase focus onbusiness continuityplanning
Increase focus onproject quality andrisk management
Increase focus onrealization of targetedbusiness benefits
Improve identificationand management ofprogram/projec t r isks
Continuously trackand manage therealization of projec tbenefits
Structure programs/projects to deliverbenefits progressively
Improve access toand distribution ofperformanceinformation
Improveunderstanding ofpartner s trengths,weaknesses andinterests
Improve abi lity tostructure andimplement durable,mutually beneficialpartnerships
Improve agil ity andflexibili ty of partnerorganizations andnetworks
Develop and uti lizeunique productionresources(methods, equipment,facilities, e tc.)
Rationalize/consolidate vendorportfolio
Improve coordinationof payments acrossbusiness units
Improve assessmentand benchmarking ofA/P performance
Refine days -outstanding strategy
Improve alignment ofA/P sys tems andprocesses w ith days-outstanding strategy
Refine credit/days -receivable strategy
Improve managementof c redit r isk acrossbusiness units
Improve managementof c redit/loan portfolio
How Value is Created(Value Drivers)
What You Can Do(Improvement Levers: Business Processes,Assets and Organizational Capabilities)
Other Shared / Corporate Services(Real Estate, Procurement and Other)
Human Capital Strategy and Management(Rec ruitment, Development, Administration andPerformance Management)
IT Strategy and Management(Des ign, Development, Deployment, Operations andPerformance Management)
Business Strategy and Managem ent(Business and F inancial Strategy , Mergers and Acquisitions , TaxManagement, Risk Management, Compliance Management, ProgramManagement and Performance Management)
Customer Strategy, Relationships and Interactions(Marketing, Sales, Delivery/Provisioning, Bi lling and Service)
Product Strategy, Development and Production(Innovation and Design, Supply Chain Management, Produc tionOperations and Logistics)
BUSINESS PROCESS GROUPINGS
All Process Groupings(Action may apply to all processes)
Change What You Do
- What you provide- Whom you target and serve- How you compete- Where you deploy resources- Which operations you outsource
Do What You Do Better
- Strengthen governance approaches- Align resources with strategies- Improve business processes- Hone strategic capabilities- Manage tax impacts and opportunities- Improve control / reduce risk- Collaborate more effectively- Satisfy customers, employees and
other stakeholders
Note: Many actions could logically be associated withother or multiple process groupings. For example,many customer and product actions are likely to haveheavy IT and HR components.
Acquire New Customers Retain and Grow CurrentCustomers
Leverage Income-Generating Assets Strengthen Pricing
ImproveCustomer Interaction
Efficiency
ImproveCorporate/Shared Services
Efficiency
ImproveDevelopment & Production
Efficiency
ImproveLogistics & Service
ProvisionEfficiency
ImprovePP&E
Efficiency
ImproveInventoryEfficiency
ImproveReceivables & Payables
Efficiency
ImproveManagement & Governance
EffectivenessImprove
Execution Capabilities
Marketing &Sales
AccountManagement
Cross-Sell/Up-Sell Retention
Demand &Supply
ManagementPrice
OptimizationMarketing &Advertising Sales
CustomerService &Support
OrderFulfillment &
BillingIT, Telecom &
Networking Real Estate HumanResources
Procurement(Excluding Production
Materials &Merchandise)
BusinessManagement
FinancialManagement Materials Production MerchandisingLogistics &
DistributionProduct
DevelopmentReal Estate &Infrastructure
Equipment &Systems
FinishedGoods
Work inProcess &
Raw Materials
Accounts,Notes &Interest
Receivable
Accounts,Notes &InterestPayable
BusinessPlanning
ProgramDelivery
BusinessPerformanceManagement
OperationalExcellence
Partnership &Collaboration
RelationshipStrength
Agility &Flexibility
Product &Service
InnovationService
DeliveryCash/Asset
ManagementStrategic
Assets
Volume Price RealizationSelling, General &
Administrative(SG&A)
Cost of Goods Sold(COGS)
Property, Plant &Equipment
(PP&E)Inventory Receivables
& Payables Company Strengths External Factors
Revenue Growth Operating Margin(after taxes)
Asset Efficiency Expectations
S h a r e h o l d e r V a l u e
Improve cus tomerincentives foraccelerated/on-timepayment
Improve cross-selling/up-sellingski lls of staff
Improve customerservice and retentionskil ls of s taff
Increase focus onproduct innovation
Improve managementof trade/indirect taxes(sales/use, VAT, GST, e tc.)
Improve tax collectionand remittanceprocesses
Improve managementof international staffcos ts(immigra tion , payroll, staffsupport, international equ it y,etc. )
Utilize availablefederal, s tate andlocal employment/training incentives
Improve technologyand data r iskmanagementprocesses
Improve compliancemanagementprocesses
Improve tax manage-ment processes(direct and indirect taxmanagement )
Optimize tax benefitsassociated w ith self-constructed assets(p lant, facilities, in ternally-used software , e tc.)
Improve managementof transfer pricing
Improve managementof trade and indirecttaxes (sales/use , VAT,GST, etc. )
Improve managementof transfer pricing
Improve incorporationof risk analysis inbusiness planning(in ternal and externa l risk)
Integrate tax oppor-tunities and issuesinto business planningprocesses
Improve identi ficationand mitigation ofoperational risk(people , p rocess, tech-no logy, data , e tc.)
Improve quality ofinformation providedto stakeholders(accuracy, time liness,t ransparency &predictab ility)
Develop and uti lizeunique informationresources (cus tomer,product, market, e tc.)
Improve managementof organizationalchange in support ofini tiatives
Improve operationalr isk managementprocesses
Improve considerationof tax implications inthe acquisition anddisposition of assets
Maximize tax benefitsassociated w ith majorbusiness decis ions(M&A, consolida tion , out-sourcing, site s elect ion, etc.)
Increase emphasis onpermanently loweringthe company'seffective tax rate
Improve accuracy andtimeliness of taxprovision and cashoutflow forecasts
Improve focus of taxfunction/departmenton proactive taxplanning
Integrate tax oppor-tunities and issuesinto business planningprocesses
Optimize accountingmethods and selec-tion of accountingperiods
Migrate income tolow-tax jurisdic tions
Util ize internationalfinancing opportuni-ties to minimize after-tax borrowing cos ts
Optimize expense vs.capitalization of costs(M&A costs, R& D costs,etc. )
Improve identi ficationand application ofR&D tax incentives
Improve ability toutil ize offshore cash/assets and movebetween geographies
Improve abi lity toutil ize offshore cash/assets and movebetween geographies
Improve managementof transfer pricing
Improve abili ty toutilize offshore cash/assets and movebetween geographies
Ensure propervaluation of propertyfor tax purposes
Build tax opportunitiesinto real estatetransactions(income deferra l, locationcredits and incentives,leas ing terms, etc.)
Improve tax benefi tsof compensation andbenefit programs(deferred and equ ity-basedcomp; re tirement andhealthcare benefits, e tc.)
Manage payrol l taximpacts of businessini tiatives(M&A, consolida tion ,restructuring, relocation e tc.)
Optimize utilization ofavailable sales/usetax exemptions
Improve managementof indirec t taxes(sa les/use, VAT, customsdut ies, e tc.)
Ensure adequatedocumentation ofsignificant taxpositions(earn ings & pro fits, t ransferpricing, tax op inions, e tc.)
Accelerate or deferincome/expenses
Clari fy governanceroles and respons i-bi lities (delegation ofauthorit y, segregat ion ofduties, etc.)
Implement/enhanceanonymous employeereporting and feed-back mechanisms
Align compensationand incentive systemswith strategies, valuesand ethics
Improve under-standing of regulatoryrequirements
Strengthen corporategovernance structures(composit ion, selection ,roles, etc.)
Strengthen training/education of boardand audit committees
Strengthen andcommunicate mission,vision, values andethics
Improve focus oninternal controls andregulatory compliance
Build values andethics into corporateculture
Inc rease emphasis onrisk identification andmanagement
Improve risk planning,mitigation and controlapproaches
Improve monitoringand management ofregulatory compliance
Improve company-wide monitoring andmanagement of r isks
Improve identi ficationand assessment ofrisk (stra teg ic, opera tional,investment , financia l, com-pliance, data /privacy, etc.)
Improve monitoringand management ofrisk and compliance(strategic, operat iona l andfinancia l risks ; regulatoryand tax compliance)
D e l o i t t e E n t e r p r i s e V a l u e M a p T M
(Practical paths to increase shareholder value)It’s easy to say shareholder value is important.Not so easy to make it influence the decisionsthat are made every day: where to spend timeand resources, how best to get things done, and,ultimately, how to win in the competitivemarketplace.
This Map is designed to accelerate theconnection between actions you can take andshareholder value. It is not rocket science and itis not complete, but it can jump-start theprocess of focusing on the things that mattermost and then choosing practical ways to getthem done.
Here are two simple ways to use it:
Start at the top. Working your way down,at each step ask yourself, How will weimprove this? This will help ensure that yourtactics support your objectives.
Start at the bottom. Working your way up,at each step ask yourself, Why are we doingthis? This will help ensure that every tacticleads to shareholder value.
Improve breadth,depth, quality andtimeliness of manag-erial information
Improve/implementinternal controlframeworks andpolicies
Strengthen andcommunicategovernance policiesand procedures
Align internal auditprac tices withbusiness and riskobjectives
Improve communi-cation between theboard, management,shareholders and thepublic
Improve mechanismsfor col lec ting andimplementingemployee ideas
Build innovation andimprovement intorewards andincentives
Improve mechanismsfor solic iting andaddressingstakeholder feedback
Develop/integrateglobal HR practices(in terna l/externa l, onshore/off shore , e tc.)
Income Taxes
ImproveIncome Tax
Efficiency
Income TaxManagement Governance
Improve util ization oftelecom tax incentives(credits, exemptions, e tc.)
Improve profitabi lity ofR&D efforts throughuti lization of tax andeconomic develop-ment incentives
Improve profitabi lity ofR&D efforts throughuti lization of tax andeconomic develop-ment incentives
Improve tracking andrecovery of indirecttaxes (sa les/use, VAT,GST, e tc.)
Ensure tax planningac tivities and taxfilings comply withregulatory environ-ment
Increase account-abi lity of businessunit leaders for taximpact of decisions
Improve coordinationof operational, inves t-ment, financial, M&A,and tax strategiesacross business units
Util ize tax-effec tivecorporate s truc turesfor ownership/licens -ing of intangibleassets (patents, t radenames, IP , e tc.)
Improve benchmark-ing of global effectivetax rate againstindustry peer group
Utilize tax opportuni-ties around risk man-agement ac tivities(hedging transactions,commodities trading, etc. )
Defer and reducefederal, state andlocal quarterly esti-mated tax payments
Cons ider taxincentives in locationand selection offaci lities
Increase focus onpost-merger synergyand cost reduc tionprograms
Improve breadth,depth, quali ty andtimel iness of businessplanning information
Uti lize tax-effectivecorporate structuresfor ownership/licens-ing of intangibleassets (patents, tradenames, IP, e tc.)
Develop and uti lizeunique tax expertise
Proceso de Modelamiento de Indicadores de Valor
©2008 Deloitte Chile.Pablo Morales, Rodrigo Rodriguez - Consulting
Proceso de Modelamiento de Indicadores de Valor
Shareholder Value
Account management
Retention
Cross-Sell / Up-Sell
Demand & Supply
Management
Contract pricing
Sales, Marketing & Advertising
Service Fulfillment &
Billing
Communication & network
development
Human resources
Procurement(Excluding Production
Materials & Merchandise)
Financial management
Critical consumables and
raw material
Scheduling, Routing &
Dispatching
Tenement management
Stockpile conversion
Reduce shrinkage
Accounts, Notes & Interest Receivable
Strategy & Performance Management
Program Delivery
Safety
Operational excellence
Partnership & Collaboration
Relationship strength
Improve Logistics &
Service ProvisionEfficiency
Improve Mine & Process
Efficiency (decrease
variability)
Improve Administrative
Efficiency
Improve Customer InteractionEfficiency
Strengthen Pricing
Volume Commodity Price
Selling, General &
Administrative(SG&A)
Production Cost
Property & Mineral Reserves
Inventory Receivables & Payables
Company Strengths
Business Continuity
Revenue Growth Asset Efficiency Sustainability
Marketing & sales Governance
Agility & flexibility
Acquire, Retain & Grow Current
Customers
Improve Receivables &
PayablesEfficiency
Improve InventoryEfficiency
Increase Certain of Mineral Reserves
Operating Margin
Risk management
World class assets
Partnership & collaboration
Program Management
Improve Execution
Capabilities
Improve Managerial & Governance
Effectiveness
Maximize Key StakeholdersWellbeing
Labour Utilisation
Stock availability
Effective hedging strategy
Asset Management
Supply Chain Infrastructure
Leverage Income-
Generating Assets
Regulatory approvals
Integration
Deal execution
Target identification
Merge & Acquire New Operations
Logistical management
Technical staff deployment
Project management &
governance
Greenfield exploration activities
Develop New Mining Operations or Expansions
Economical issues
Deal structuring
Process control
Support equipment utilization
Manage intra-process
inventory
Increase stock turnover
Spot vs Contract Strategy
Trading effectiveness
Mineralization Inventory
Optimise stockpile levels
Decrease Risk of Business Continuity
Interruption
External Factors
Health
Community relationships
Environmental
Security & emergency
management
Knowledgesharing
managament
Decrease negative
impacts of external issues
Political issues
Social issuesOperational integration
Global market downturn
Availability of critical inputs
(water, energy)
Accounts, Notes & Interest Payable
Maintenance
Plant & Equipment
(P&E)
Mining Equipment requirement
Improve availability of
P&E
Rental/leasing contract
management
Fixed assets reconciliation
End to end mine
management
Improvement infrastructure
planing
Funds
Improve cash Management
Efficiency
Cash management
Capital investment
management
Control inventory
critical items
Spare parts stock
optimization
Income Tax
Improve Income taxEfficiency
Tax planning
Valuation and costing methods
Transfer pricing
management
Tax benefits and incentives
Short and middle term
mine planning
Equipment Utilisation
Energy & water provision
Increase Operational Innovation
Effectiveness
R&D implementation
Pipeline and transport system
availability
By- product credit
Production process
innovation
Equipment innovation
Information technology
management
Automation
Suplier relationship management
Contractor management
Quality and precision of geological
information
Reserves certification
Optimize Product Grade
By-product production
Production base on cut off
grade
Feasibility study
Road maintenance
Financial modelling
Geological modelling
Economical modelling
Long-term Mine planing
Optimize Life of Mine
Metallurgic modelling
Blend management
Order processing
Energy and water
consumption
Mine closure
Tax aligned to supply chain
Talent management
Wellbeing
Labour/skillsavailability
Social responsability
Capacity
Brownfield exploration activities
Construction
New processing
technologies
Asset portfolio diversification
Customer diversification
Resource and land tenure
management
Resource owner relationship management
Exploration, technical and economical evaluation
Disinvestment management
Currency exposure
Rehabilitation
Government parnership
Union and labour
relationship management
Shortage of essential
equipment
©2008 Deloitte Chile.Pablo Morales, Rodrigo Rodriguez - Consulting
Proceso de Modelamiento de Indicadores de Valor
Service fulfillment &
billing
Communication & network
development
Human resources
management
Procurement(excluding production
materials & merchandise)
Financial management
Critical consumables and
raw material
Scheduling, routing &
dispatching
Improve Logistics &
Service ProvisionEfficiency
Improve Mining & Processing
Efficiency (DecreaseVariability)
Improve Administrative
Efficiency
Improve Customer InteractionEfficiency
Selling, General &
Administrative(SG&A)
Production Cost
Operating Margin
Labour utilisation
Process control
Support equipment utilisation
End to end mine
management
Income Tax
Improve Income TaxEfficiency
Tax planning
Valuation and costing methods
Transfer pricing
management
Tax benefits and incentives
Short and medium term mine planning
Equipment utilisation
Energy & water provision
Increase Operational Innovation
Pipeline and transport system
availability
By- product credit
Production process
innovation
Equipment innovation
Information technology
management
Automation
Supplier relationship management
Contractor management
Quality and precision of geological
information
Road maintenance
Order processing
Energy and water
consumption
Mine closure
Tax alignedsupply chain
Logistics & execution
billing
Customer service & support
Equipment availability
Local accounting
policies
Sales & marketing
Demand planning
Customer inbound supply
chain integration
Outbound supply chain integration
Distribution management
Chartering and fleet
management
©2008 Deloitte Chile.Pablo Morales, Rodrigo Rodriguez - Consulting
Value Driver Model para Permitir el Mejoramiento de Procesos
El roll-out distingue dos fases:
1. Testeo de Hipótesis, y orientación al objetivo
2. Identificación de oportunidades, desarrollo de proyectos y planeamiento de laimplementación de las oportunidades identificadas.
“Pasando del modelo a las acciones”
©2008 Deloitte Chile.Pablo Morales, Rodrigo Rodriguez - Consulting
Value Driver Model para Permitir el Mejoramiento de Procesos
• Desarrollo de Iniciativas de Valor:• Este modelo nos permite hacer hipótesis de pruebas así como el análisis de las distintas
opciones. Esto representa el “qué” de la ecuación de mejora. El "cómo" es un proceso estructurado como fuente de ideas de mejoramiento.
• Aquí los Indicadores operacionales son usados para determinar el impacto de las ideas de mejoramiento en los Indicadores financieros de alto nivel (EBIT, EVA, ROCE, etc.). Este paso es parte del proceso como un todo:
Idea Filtering & Testing
Can the price of gold be increased?
Can the profitability
of Tshepong be raised?
Can the costs be lowered?
Can volumes be raised? Can more
tons be hoisted
Can more tons reach the hoists
Are the carriages operating to capacity?
Can the hoist cycle times be increased?
Can a hoist scheduling system be developed?
Should another hoist be installed?
Targeting identified
volume as a key driver
Can the ore transport improve
Can the more tons be mined?
Is the passage blocked?
Are the trams to
slow?
Are the trams full?
Root Cause AnalysisTracking & Sharing
12
3 4 5
6
Focus on Value
R 4
40
R 4
30
R 4
27
R 4
06
R 4
00
R 3
78
R 3
56
R 3
52
R 440R 430 R 429
R 423
R 408 R 407 R 406
R 410
R 389R 386
R 440
R 417
R 315300
320
340
360
380
400
420
440
Sep-06 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep-07
Impact of Combined Opportunities Current R440/TonCosts Reduction Opportunities Tons Increase OpportunitiesNameplate R315/Ton
Project Development &Implementation Planning Project Execution & Closure
Value Driver Modelling
EBIT
Revenue
Cash Costs
Tons Sold
Price per Ton
Saleable Tons
Sold:Saleable Ratio
ROM Tons
Yield
Labour
Coal Purchase Raw
Contractors
Overheads
Plant
Engineering
Mining
Other++
Other Costs
X
X
X
־
+High Level Focus Areas
Detail Focus Areas
4%
2%Improvement
Envisaged
Legend
1.5%
©2008 Deloitte Chile.Pablo Morales, Rodrigo Rodriguez - Consulting
Value Driver Model para Permitir el Mejoramiento de Procesos• Desarrollo de Iniciativas de Valor:• La identificación, selección y ejecución de las iniciativas debe seguir un proceso definido,
generando un pipeline focalizado en la identificación de oportunidades y que genere el momentum para el cambio cultural.
Initiative Tracking System Opportunity Pipeline
“para gestionar el progreso en el pipeline” “para gestionar el valor en el pipeline”
©2008 Deloitte Chile.Pablo Morales, Rodrigo Rodriguez - Consulting
Value Driver Model para Permitir el Mejoramiento de Procesos• Desarrollo de Iniciativas de Valor:• La identificación, selección y ejecución de las iniciativas debe seguir un proceso definido,
generando un pipeline focalizado en la identificación de oportunidades y que genere el momentum para el cambio cultural.
• All processes perform at average productivity, availability and utilisation throughout the year
• Open cut mine produces maximum possible until CPP reaches 6.5Mt capacity
• Increase contractor truck/shovel• Increase contractor drill
• Availability of mains conveyor system increased by 5%• 1 additional supervisor; 1 additional fitter; 1 additional admin
support• 8 additional contractor shifts per weekend (96 hours)
• Productivity increased by 50%• Contract cost: $3,600 per metre• All continuous miner operating and maintenance costs
avoided
• Replaces worst existing continuous miner• Productivity increased to 4m/h• Availability increased to 92%• Purchase cost $4.5m
• 2 additional crews; 1 additional supervisor• All pay increases to 7 day roster rates• Overtime reduced by 50%• Planned maintenance downtime: 2x12 hour weekday shifts• Maintenance OEM rates halved; OEM contractors doubled
Assumptions Modelled
+7,650,808Consistent performance across mine
F
+15,025,002Open cut at full capacityE
+18,717,889Planned maintenance of conveyors
D
(to follow)Contract development driveage
C
0New continuous minerB
-3,139,888Development 7 day rosterAChange in EBIT ($)2Initiative
• All processes perform at average productivity, availability and utilisation throughout the year
• Open cut mine produces maximum possible until CPP reaches 6.5Mt capacity
• Increase contractor truck/shovel• Increase contractor drill
• Availability of mains conveyor system increased by 5%• 1 additional supervisor; 1 additional fitter; 1 additional admin
support• 8 additional contractor shifts per weekend (96 hours)
• Productivity increased by 50%• Contract cost: $3,600 per metre• All continuous miner operating and maintenance costs
avoided
• Replaces worst existing continuous miner• Productivity increased to 4m/h• Availability increased to 92%• Purchase cost $4.5m
• 2 additional crews; 1 additional supervisor• All pay increases to 7 day roster rates• Overtime reduced by 50%• Planned maintenance downtime: 2x12 hour weekday shifts• Maintenance OEM rates halved; OEM contractors doubled
Assumptions Modelled
+7,650,808Consistent performance across mine
F
+15,025,002Open cut at full capacityE
+18,717,889Planned maintenance of conveyors
D
(to follow)Contract development driveage
C
0New continuous minerB
-3,139,888Development 7 day rosterAChange in EBIT ($)2Initiative
EJEMPLO
©2008 Deloitte Chile.Pablo Morales, Rodrigo Rodriguez - Consulting
El Cambio Cultural y la Gestión del Cambio
• El mejoramiento de procesos es un proceso guiado por personas. Alcanzar las mejoras identificadas requiere de una componente de Gestión de Cambio.
• El proceso de intervención de considerar:Comunicación para el entendimiento de las necesidades y razones para el mejoramiento
Convicción de poder alcanzar las mejoras
Movilizar hacia la capitalización y transferencia del conocimiento del proceso
Enfoque hacia la contribución a la creación de valor al negocio
Tiempo
Análisis de la situación Actual
Positiva
ConocimientoContactoEntendimiento
Percepción
Adopción
Institucionalización
Convicción
Positiva
ConocimientoContactoEntendimiento
Percepción
Adopción
Institucionalización
Convicción
ConocimientoContactoEntendimiento
Percepción
Adopción
Institucionalización
Convicción
DesconocimientoDesconocimiento ConfusiónConfusión PercepciónNegativa
PercepciónNegativa
Decisión de no Soportar el Cambio
Decisión de no Soportar el Cambio
Decisión De retirarse
Después Del Uso
Decisión De retirarse
Después Del Uso
Conformidadobediencia
Conformidadobediencia
Cae el Compromiso
Cae el Compromiso
Niv
el d
e In
volu
cram
ient
o
Fases deapoyo al cambio
Preparación
Movilización
Compromiso
©2008 Deloitte Chile.Pablo Morales, Rodrigo Rodriguez - Consulting
• El mejoramiento de procesos es un proceso guiado por personas. Alcanzar las mejoras identificadas requiere de una componente de Gestión de Cambio.
• El proceso de intervención de considerar:Comunicación para el entendimiento de las necesidades y razones para el mejoramiento
Convicción de poder alcanzar las mejoras
Movilizar hacia la capitalización y transferencia del conocimiento del proceso
Enfoque hacia la contribución a la creación de valor al negocio
Mine Overseers / Superintendents Shift Overseers / Foremen
Miners / Artisans / Plant Operators CAT 4 – 8
Positive/Aware/Enthusiastic
Reason N
eed
Believe
Believe
Equipped
Believe
Equipped
Believe
Equipped
Equipped
Reason N
eed
Reason N
eed
Reason N
eed
Equipped
Believe
Reason N
eed
Survace 2
Op’s / Ass’s
MO / Sup
SB / FM
Min / Art
PO’s
ServicesOpen CastSurface 1UndergroundStakeholder G
roups
Reason N
eed
Believe
Believe
Equipped
Believe
Equipped
Believe
Equipped
Equipped
Reason N
eed
Reason N
eed
Reason N
eed
Equipped
Believe
Reason N
eed
Survace 2
Op’s / Ass’s
MO / Sup
SB / FM
Min / Art
PO’s
ServicesOpen CastSurface 1UndergroundStakeholder G
roups
Neutral/Luke Warm Negative/Problem Area
Analyse (Qualitative & Quantitative) Interpret, work-shop, feedback & ideate 1 2
Improvement fails because we have ideas but we don’t properly
implement.
Innovation is possible if we are prepared to
work together as employees
Ideas goes where? We need to understand the process/platform
EJEMPLO
El Cambio Cultural y la Gestión del Cambio
©2008 Deloitte Chile.Pablo Morales, Rodrigo Rodriguez - Consulting
• El mejoramiento de procesos es un proceso guiado por personas. Alcanzar las mejoras identificadas requiere de una componente de Gestión de Cambio.
• El proceso de intervención de considerar:Comunicación para el entendimiento de las necesidades y razones para el mejoramiento
Convicción de poder alcanzar las mejoras
Movilizar hacia la capitalización y transferencia del conocimiento del proceso
Enfoque hacia la contribución a la creación de valor al negocio
Communication and skill interventions3 Tracking the progress – culture barometer4
Where are we now?
Why are we
here?
What do we need to do?
Exsiting Communication Channels• Monthly Joint Forums• Toolbox Talks Meetings (U/G)• Complex Meetings• Corporate Communication Newsletter
Exsiting Communication Channels• Monthly Joint Forums• Toolbox Talks Meetings (U/G)• Complex Meetings• Corporate Communication Newsletter
“Communication will be done through existing channels and new ideas for communication will be launched through the platform”
“Facilitated storyboarding is
used as a communication tool to ensure
understanding of the process”
EJEMPLO
El Cambio Cultural y la Gestión del Cambio
©2008 Deloitte Chile.Pablo Morales, Rodrigo Rodriguez - Consulting
Conclusiones y Lecciones Aprendidas
Lecciones aprendidas:
• Liderazgo e involucramiento de los Gerentes y usuarios claves y una clara definición de responsabilidades en el proceso, tanto de los niveles ejecutivos como de las áreas operacionales.
• Lograr una visión holística del proceso (End to End).
• No desmerecer el cambio cultural y generar el momentum adecuado.– Sponsorship de los Gerentes de Operaciones, Gerentes de Mina y Gerentes de Planta.
– La Comunicación hacia los niveles operacionales debe partir en forma temprana a modo de asegurar su involucramiento
• Focalizarse en iniciativas que puedan ser monitoreadas y medibles claramente con los KPI’s
• Foco a los Quick Wins tempranamente.
• Entender que las oportunidades pueden justificar un requerimiento de recursos mayor
• Asegurar un balance adecuado en el mix de iniciativas de corto, mediano y largo plazo, asimismo entre las de bajo y alto presupuesto.
• Asegurarse de capitalizar el conocimiento utilizado y obtenido en el proceso.
El enfoque ofrece un camino práctico para la identificación de proyectos de mejora e innovación, pudiendo soportar la valoración cuantitativa de las iniciativas.
A concretar: un modelo para la identificación y priorización de las ideas de mejora y en general la gestión de un portafolio de iniciativas de innovación, incluyendo el tracking y
gestión de la ejecución de dichas iniciativas o proyectos, traduciéndose en resultados de ahorro, mejoras de productividad u otras mejoras concretas para el negocio.
©2008 Deloitte Chile.Pablo Morales, Rodrigo Rodriguez - Consulting
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