4600 prospect avenue cleveland, ohio 44103 800.now.camp © copyright 2004 camp, inc. roadmap for...

4600 Prospect Avenue Cleveland, Ohio 44103 800.NOW.CAMP www.camp.org

©Copyright 2004 CAMP, Inc.

ROADMAP FOR GROWTH FOR MANUFACTURERS

RoadMap to Growth




Today’s session will help you

• Understand why growth planning is so important for your company

• Learn a breakthrough methodology for growth planning that yields results you can implement and sustain profitably

• Learn about companies that have used growth planning successfully to achieve significant results

• With sample tools that you can use to help start your own growth planning process




Demand is the Issue

• Increased Global Competition

• Reduced US market share

• Weak Exports

• Down significantly from their peak

• High Levels of Inventory

• Sales of already manufactured goods reduces production levels

WEAK DEMAND AILS MANUFACTURING NATIONALLY




IN SPITE of…

• The impact of 9/11

• The impact of outsourcing to overseas suppliers

• The 2000 recession

There IS HOPE.

State and Region Led Nation in Unemployed Workers

SOURCE: Council for Economic Opportunities in Greater Cleveland; Ohio Department of Job & Family Services. Cleveland Plain Dealer October 21, 2004

Between 2000 and 2004, of every 100 Americans who lost their jobs 37 were from Ohio

11 were from Northeast Ohio




1. Competitors are cutting prices to gain business

2. New competitors from overseas

3. Customers are in declining markets

4. Customers are going out of business

5. Customers have strategic buying power keeping your prices low (Walmartized)

6. You require a key raw material whose price is volatile

What’s Giving you Pain Today?




• Grow

• Sell (Exit the market)

• Do More of the Same

Choices




Avenues of Growth




Manage Program

New Products

Acquisitions/Divestitures

Partnering/Licensing

Business Agility/Services

New Channels

Capacity/Quality BuildingFinalizeBreakthrough

Plan

Identify Growth

Opportunities

EvaluateBreakthrough

Potential

Set GrowthGoals & Initiate

Program

Breakthrough Growth Planning Methodology

Implement Breakthrough Growth Plan

Market Development / Penetration




How is the Breakthrough Methodology DIFFERENT?

• Focused on SUSTAINABLE GROWTH, not cost cutting

• Driven by CUSTOMERS and POTENTIAL CUSTOMERS not internal perceptions

• COMPREHENSIVE yet covers only what is important

• Designed for manufacturing companies of ALL SIZES

• Focused on IMPLEMENTATION for results

• It’s PROVEN!




New Products




New Channels

Capacity/Quality Building

Market Development/Penetration

FinalizeBreakthrough

Plan

Identify Growth

Opportunities


Potential


Program






A Vision and Plan for Growth


Program

SUCCESSFUL GROWTH COMPANIES…

• PLAN for their future growth

• THINK LONG TERM about where they want to be in 10 years or more

• Use this Vision to DRIVE KEY STRATEGIES AND DECISIONS

• Develop a HARD VISION GOAL – How much and by when?




New Products




New Channels




Plan

Identify Growth

Opportunities


Potential


Program




Potential




6 Questions to Guide Growth Planning

1. Who are your BEST CUSTOMERS now and in the future?

2. Do you use LOST ORDER ANALYSIS to understand the specific reasons you are losing orders to competitors?

3. Do you know if you are making ADEQUATE MARGINS on each product for each customer?

4. Do you know what kinds of PRODUCTS AND SERVICES your best customers want?

5. Can you compare your products and services in every way to your COMPETITORS’ in all the markets you serve?

6. Do you know where your NEXT MARKETS are?


Potential

Viewpoint

Internal

Internal

Internal

External

External

Decision




Where is Your Business Headed?

Victory Roll or Death Spin?Evaluate

BreakthroughPotential




About to crash. Need triage. Must act today.

-

--

Growth options must provide quick, positive results with little investment.+--

Should have started. Some longer-term options may not be possible.+-+

Best time to start growth planning. Longer-term options with higher rewards are possible.

+++

Growth OptionsBalanceSheet

CashFlowIncome


Potential

Confront the Facts: Your Options Depend on Your Position

(Financial)





(Operational)

Technology

Productivity

Control over Sales Channels

Information Systems

Quality

Lead Times

Production Capacity

GoodAdequateInadequateCategory


Potential




Clear Mission: All employees know the mission and have aligned their performance goals to it

High LowDimension

Bench Strength: The company continually invests in developing employees’ skills to align them with the company’s performance needs

Systems to Support Performance Goals: The company clearly defines what and how to accomplish its goals

Effective Communication: Operations and customer service communicate well (and with the outside world)

Medium


Potential


(Organizational)




Know the Profitabilityof your Customers

Re

ven

ue

Cost to Serve Low

High

High

Low

Customer Sales $ Cost $ Sales Cost to Serve Adjusted Adjusted Direction

(000) (000) Margin Factor Cost Margin of Sales

A 1400 1100 21.43% 1 1100 21.43% UP

B 1950 1600 17.95% 1.1 1760 9.74% UP

C 1250 1000 20.00% 1.25 1250 0.00% STEADY

D 1850 1550 16.22% 0.75 1163 37.14% DOWNExample Method


Potential




Cost to ServeLow High

Know the Profitability of your Customers


Potential

Rev

enu

e s

High

GMElectroluxTRW

Wabco




• A combination of CUSTOMER SEGMENTS and GEOGRAPHY

• These segments must be defined by MEANINGFUL VARIATIONS IN BUYING DECISIONS across your customer base

Segments can also be defined by:

• INDUSTRY• FUNCTION & USE• SIZE• SPECIFIC CUSTOMERS

• What makes sense for YOUR company?

What is your MARKET?

Evaluate Breakthrough

Potential




Know Your Markets by Hearing the Voice Of Your Customer

• Our experience shows that a company’s internal view of what is important to its customers is often inaccurate.

• Using inaccurate (internal only) perceptions to drive growth planning is very risky.

• A “best practice” in growth planning is to conduct customer, potential customer and competitor research using a third party doing anonymous interviews


Potential




CompetitorA

You

CompetitorB

Customer6

Customer4

Customer1

Customer3

Customer2

Customer5

• What the market place lookslike to your customer?

• Customer criteria for selecting suppliers?

• Customer approach for selecting suppliers?

• Why are some suppliers used more often than others?

• Customer views of target suppliers?

What To Ask Your Customers…


Potential

You need to understand the factors that drive your customer’s decisions

in the marketplace




Sample Competitor Analysis


Potential

Value Map

10.0

8.0

7.0

10.0 8.0 9.0 7.0 6.0

Price High

(low rating) Low

(high rating)

Val

ue

Low

High

Competitor 4

Competitor 2

Competitor 3

Fair Value Line

Gain Market Share

Lose Market Share

9.0

Competitor 1

XYZ Co.




Process Check-in: Where Are We?

• Set Growth HARD GOALS• Set Growth Planning TIMEFRAME• Establish Growth Planning PROCESS

• Looked at internal capabilities for:FINANCIALS, ORGANIZATION and PROCESSES

• Looked at the situation from the MARKET PLAYERS’ PERSPECTIVE


Potential


Potential


Program




New Products




New Channels




Plan

Identify Growth

Opportunities


Potential


Program




Potential

Identify Growth

Opportunities




Growth Options ToolP

rod

uc

ts

MarketsOld

New

New

Identify Growth

Opportunities

Old




Growth Options ToolStable or Growing Current Markets

Pro

du

cts

MarketsOld

New

New

Identify Growth

Opportunities

Old

RelativelyHigh Risk& HighReturns

RelativelyModerate Risk& ModerateReturns


RelativelyLow Risk& LowReturns

RelativelyLow Risk& LowReturns





Growth Options ToolDeclining Current Markets

Pro

du

cts

MarketsOld

New

New

Identify Growth

Opportunities

Old






Pro

du

cts

MarketsOld

New

New

Growth Options ToolOutdated Technology or Products

Old







New Products


New Channels






Plan

Identify Growth

Opportunities


Potential


Program




Potential

Identify Growth

Opportunities


Plan




Considerations:• Likely cost• Likely benefits

(how do they support my hard goals?)• Timeframe• Risk• Organization’s ability & readiness to deliver

Need to Develop & Test ALTERNATIVE Growth Choices


Plan




Strategy: Increase sales of Existing products to Existing markets. What action could I take?

Many Paths to Achieve ResultsP

rod

uc

ts

Markets

Old

Old

New

New

Implement Breakthrough Growth PlanFinalize

BreakthroughPlan


New Channels






Pro

du

cts

Markets

Old

Old

New

New

Strategy: Sell New products to Existing markets. What action could I take?

Many Paths to Achieve ResultsImplement Breakthrough Growth PlanNew Products




New Channels



Plan





Pro

du

cts

Markets

Old

Old

New

New

Strategy: Sell Existing products to New markets. What action could I take?

Many Paths to Achieve ResultsImplement Breakthrough Growth Plan




New Channels



Plan





Pro

du

cts

Markets

Old

Old

New

New

Strategy: Sell New products to New markets. What action could I take?

Many Paths to Achieve ResultsImplement Breakthrough Growth PlanNew Products




New Channels



Plan





Answer 2 questions

How Do I Decide WHICH Growth Options to Choose?


Plan

1. What do we need that can be filled by a new product, acquisition and/or partnership?

(Needs Analysis)

2. Where can we apply our existing people, processes and technology?

(Exploitation Analysis)




Deciding WHICH Growth Optionsto Choose


Plan Needs Analysis

• Involved in a cyclical or seasonal business

• Rely on a few customers

• Slow / no growth industry

• Quotes are competitive and cost driven

• Rely on sales reps and distributors

Exploitation Analysis

• Highly skilled people and engineered to order products

• New and flexible manufacturing facility with extra capacity

• Large conveniently located warehouse

Example




New Products M-H H M-H H M

Acquisitions H H M-H M-H H

Partnering/Licensing L M M-H M-H L

Business Agility/Services L L-M L L-M M

New Channels L-M L-M L-M L-M M

Capacity/Quality Building L-M L-M L L-M L-M

Market Development/Penetration L-M L-M L L-M L

Growth Options Cost FinancialReturn

Risk LeadTime

OrganizationReadiness


Plan

Growth Option Evaluations




The Process is Iterative

• As you do your work in “Finalize Breakthrough Plan” phase you may find that the growth opportunities you identified need to be adjusted because of cost, timeframe, risk, etc.

• When this occurs you can revisit the “Identify Growth Opportunities” phase to select new options to evaluate.

• This process continues until you approve and then finalize the plan.


Plan

Identify Growth

Opportunities

Identify Growth

Opportunities


Plan




New Products




New Channels




Plan

Identify Growth

Opportunities


Potential


Program




Potential

Identify Growth

Opportunities


Plan

New Products




New Channels






MUSTBE IMPLEMENTEDTO ACHIEVERESULTS!


New Products




New Channels


The BREAKTHROUGH Growth Plan





Why the Roadmap?




Because it is….• Focused on SUSTAINABLE GROWTH, not

cost cutting

• Driven by CUSTOMERS AND POTENTIAL CUSTOMERS not by internal perceptions

• COMPREHENSIVE yet covers only what is important

• Designed for manufacturing companies of ALL SIZES

• Focused on IMPLEMENTATION for results

• PROVEN!




•Take the time to plan...•Get help if you need it...

Doing nothing is really NOTan option, so…

DO SOMETHING!

What Now?




THANK YOU for coming!

4600 prospect avenue cleveland, ohio 44103 800.now.camp © copyright 2004 camp, inc. roadmap for...

Documents

growth opportunities

sustainable growth

prospect avenue cleveland

manufacturers roadmap

growth planning process

manufacturers demand

breakthrough plan

manufacturers todays