GREEN DOT CONSULTING

Building solutions just not promises

ERP Vendor Selection presentation

Preetha SridharMing Fang

Dhanesh GandhiSrini SaravananShyam Rajaram

Executive Summary

Context

Market assessm

ent & review

of strategi

c options

Proposed way

forward

MHS facing declining profits and stalled revenue growth in recent years - $2 million profit shortfall per week

Supplying to three markets segments: parts to aircraft OEMs, spare parts to commercial airlines and overhaul and repair shops.

Growth in commercial airlines around the world, especially low cost carriers

Focusing more on the commercial airlines business is key to helping MHS meet growth aspirations.

Airline industry in long term distress – making over $42 billion losses in the last six years

Significantly improve demand forecasting and lower lead time and supply chain costs for its customers i.e. commercial airlines

Imperative to invest in an ERP system to meet critical success factors Propose selecting GMS Alpha ERP system given its superiority in

planning and forecasting

The context

Our understanding of the context

Our understanding of the context

• MHS with stagnating growth and declining profits in recent years

– Profit shortfall from plan of $2M per week

• Three key customer segments– OEM– Commercial airlines– Repair and overhaul shops

• Several challenges faced by MHS in the market...

– Small customer base– Low customer satisfaction– Increased need for higher availability, lower

costs and longer lead time

• ...along with internal challenges– Inaccurate data and lack of sales

information

Three key objectives for MHSThree key objectives for MHS

• Improve market position as a reliable supplier

• Become a one stop shop for all maintenance and repair needs of MHS customers

• Meet aspirations by bridging the $2M profit shortfall

Review of market

OEM aircraft manufacturersOEM aircraft

manufacturers

• Supply to new and retrofit systems and parts to aircraft manufacturers

Commercial airlinesCommercial airlines

• Supply of spare parts to commercial airlines

MRO servicesMRO services

• Supply of spare parts and related services to overhaul and repair shops

Segment Descriptio

n

Demand Characteri

stics

• Boeing and Airbus account for bulk of the market demand

• Attractive with growing travel demand, however, trend of in-house repairs, substitutes and longer life

• Interested in availability, speed and lower costs

• Airlines in consortiums to increase buying power

• Low loyalty among customers in this segment

• Pricing key lever (i.e. lower margins) in order to get long term contracts and to retain design rights

• Very lucrative business and historically delivered most of the profits

– 100% gross margin

• Typically price sensitive customersExpected

Margins

Supply proprietary parts to OEMs to improve chances

of winning in the commercial airlines market

Increasing sales and lowering costs by 25% each necessary to address $2M shortfall

$M

250

200

150

100

50

0Tota

l

245

19

Increasing sales by

5%

13

Lowering distribution costs by 5%

7

Current gross

margin

245

~8% uplift in profit

$M

25%

150

100

50

030%

127

104

20%

82

15%

60

10%

39

5%

19

Addresses

shortfall

Change in gross margin of spare parts division with 5% change in

sales & distribution costs

Change in gross margin of spare parts division with 5% change in

sales & distribution costs

% change in gross margin with % increase in sales and

decrease in costs

% change in gross margin with % increase in sales and

decrease in costs

Five levers identified to improve profitability

Improveprofitabilit

y

Increase revenue

Lower costs

Increase prices

Increase volume

Unlikely to be lever given competitive intensity in the market

Increase share of wallet

Acquire long term contracts

Expand distribution portfolio

Expand across the maintenance value chain

Lower inventory costs

1

2

3

4

5

Four critical success factors to win in the market and meet growth aspirations

Better demand forecasting tool Customer service Lower supply chain costs for customers Lower lead time

Investing in an ERP system will be critical to succeed in the aviation market

Module prioritization

WEIGHT

MODULES

GMA Alpha System and Vision Beta System evaluated on the basis of critical success factors

Implementation plan…

Strategi

c Planning

•Assign a project team•Examine current business •Set objectives•Develop a project plan

Procedure review

•Review software capabilities•Identify manual processes•Develop standard operating procedures

Data

collection and cleanup

•Convert data•Collect new data•Review all data input•Clean up data

Training

and testing

•Pre test the database•Verify the testing•Train and test

Go live and evaluation

•Develop a final Go-Live Checklist•Evaluate the solution

…Implementation plan

Short Term Solution

Inventory Count

DatabaseCleaning

Prioritize module

implementation

Asset tracking and valuation Managing stock levels

Data – the most important asset of any organization Update excel sheets Share data across departments Record sales information

Inventory/warehouse module Order fulfillment Inventory forecasting

Automating and streamlining

process

Differentiation: ModerateCost: Moderate

Making process automated and transparent to easily manage the logistics

Road to stay competitive

Customer relationship

Differentiation: Very HighCost: Moderate

Electronic Data Interchange, Vendor Managed Inventory, Targeted marketing

Green IT

Differentiation: HighCost: High

Better waste management, and leverage incentive options