whirlpool all four zone - capex

Doc. Classification: GeneralCreated by: 500186 Date: 27-10-2015

ERP Project AtlanticWhirlpool Case Facts

European Market Share 13%Stake 53%Payment 470From Philips 47%Paid to Philips 600Produced 6900

Phased ApproachCountry Grouping Waves

Sales of Inventory 51Reserved 8Transit 9Reduction by 12

Product avalability 92%Gross margin increase by 0.25%Increase in unit sales 25%

Employee cost reduction 18%Per eployee per annum reduction 40000Nos of employee reduced 79

B 3160000Finance cost reduction 15%Nos of Finance employee reduction 60Per eployee per annum reduction in finance 45000

C Finance cost reduction in $ 2700000

Space saving annually @ 40Total space saved 7200

D Savings 288000Return % 3%Per unit 30Total Units returned

E Savings on customer returns

Cost of capital 9%Tax Rate 40%

Implementation / Training 50Implementation / Training Cost 45000Consultants 19Consultants 9Consultants 7Consultants 4Monthly cost 15400Cost on 3 person Task Force 600000


2000

Units (west) 2271.14Additional 35.73

2306.87

Margin 12.3%Incremental margin 12.3600%Revised margin in Rs 60039

Revenue 485656Cost 425617Margin 60039

DSI 45DSI Revised 42Inventory New Level 48975.1Inventory Old Level 51648.29Saving in Inventory 2673.19

2000

Units (South) 1415.95Additional 0.00

1415.95

Margin 16.31%16.3%

Revised margin in Rs 46231


DSI 51DSI Revised 51Inventory New Level 33168.7Inventory Old Level 33158.1Saving in Inventory 0

2000


Units (Central) 977.67Additional 0.00

978

Margin 23.53%23.53%



DSI 67DSI Revised 67Inventory New Level 26022.0Inventory Old Level 26056.02Saving in Inventory 34

2000

Units (North) 1443.156Additional 0.00

1443

Margin 10.62%10.62%



DSI 55DSI Revised 55Inventory New Level 37834Inventory Old Level 37834Saving in Inventory 0

Consolidated Statement1999 2000

Units 6108Additional units 35.73


Cumulative 36

Stock 2708Incremental Stock 2708

Revenue 1235610Existing Revenue 1227859Incremental Revenue 7751

COGS 1055843Existing 1049263Incremental 6580

Incremental Margin 1172

Employee cost 2250 2250Training cost of consultant 3511.2 1663.2Compliance cost 300Manage & Maintain 600 1200Licence maintenance 100Total Implimenatation Expense 6361.2 5513.2Other Savings 621Incremental Operating Expense 6361.2 4892.2

Capital cost on Hardware 4300 8600Capital cost on Software 600 300Total CAPEX 4900 8900

Depretiation 980

Revenue - 7,751.23 COGS - 6,579.51 Operating Expense 6,361.20 4,892.20 Depretiation - 980.00 EBIT (6,361.20) (4,700.48)Tax @ 40% (2,544.48) (1,880.19)EAT (3,816.72) (2,820.29)

Depretiation 0 980CAPEX 4900 8900NWC 0 2707.7Cash Flow CF -8716.7 -8032.6PV 1.00 0.92NPV (8,716.72) (7,369.38)

22,419.68


DSIWest 45

million South 51Central 67

million North 55SKUs

days Cumulative Margin Improvement by Year by Wave2000

West 0.06%days South

CentralNorth

product availability improvementForecasted Other Expenses Savings by Year (000s US$)

2000$ Order Desk Headcount 0Nos Finance Headcount 81

Warehouse space 18Bad Debt Expense 102Information Systems 420

621

Capital Expenditure

by 15%$

$ Software Licenses

Depreciation years

NoseachNos in 1999Nos in 2000Nos in 2001Nos in 2002eacheach year


2001 2002 2003 2004 2005

2271.14 2271.14 2271.14 2271.14 2271.1457.16 50.02

2364.03 2414.05 2414.05 2414.05 2414.05

12.3% 12.3% 12.3% 12.3% 12.3%12.57% 12.57% 12.57% 12.57% 12.57%

62471 63793 63793 63793 63793

498635 509185 509185 509185 509185436164 445392 445392 445392 445392

62471 63793 63793 63793 63793

45 45 45 45 4537 33 33 33 33

44213.9 40268.4 40268.4 40268.4 40268.451648.29 51648.29 51648.29 51648.29 51648.29

7434.42 11379.94 11379.94 11379.94 11379.94

2001 2002 2003 2004 2005

1415.949 1415.949 1415.949 1415.949 1415.94913.26 15.15 9.47

1429.21 1444.36 1453.83 1453.83 1453.83

16.31% 16.31% 16.31% 16.31% 16.31%16.41% 16.56% 16.56% 16.56% 16.56%

46950 47881 48195 48195 48195

286556 290028 291929 291929 291929239606 242146 243734 243734 243734

46950 47881 48195 48195 48195

51 51 51 51 5146.8 42 39 39 39

30722.1 27863.4 26042.8 26042.8 26042.833158.10 33158.10 33158.10 33158.10 33158.10

2435.97 5294.69 7115.31 7115.31 7115.31

2001 2002 2003 2004 2005


977.67 977.67 977.67 977.67 977.670 19 19.348 9.674 0.000

978 997 1016 1026 1026

23.53% 23.53% 23.5% 23.5% 23.5%23.53% 23.66% 23.78% 23.78% 23.78%

43682 44793 45893 46330 46330

185443 189360 193266 195105 195105141761 144567 147372 148775 148775

43682 44793 45893 46330 46330

67 67 67 67 6767 62.2 57.4 55 55

26022.0 24635.8 23175.8 22418.2 22418.226056.02 26056.02 26056.02 26056.02 26056.02

34 1420.24 2880.21 3637.86 3637.86

2001 2002 2003 2004 2005

1443.156 1443.156 1443.156 1443.156 1443.1560 0 15.254 15.254 7.627

1443 1443 1458 1474 1481

10.62% 10.62% 10.62% 10.62% 10.62%10.62% 10.62% 10.75% 10.87% 10.87%

29816 29816 30500 31163 31324

280896 280896 284234 287551 289039251080 251080 253734 256388 257715

29816 29816 30500 31163 31324

55 55 55 55 5555 55 50.2 45.4 43

37834 37834 34897 31890 3036137834 37834 37834 37834 37834

0 0 2937 5944 7473

12278592001 2002 2003 2004 20056108 6108 6108 6108 6108

70.42 84.52 44.07 24.93 7.63


106 191 235 260 267

9905 18095 24313 28077 296077197 8190 6217 3764 1530

1251530 1269468 1278614 1283771 12852591227859 1227859 1227859 1227859 1227859

23671 41609 50755 55912 57400

1068612 1083186 1090233 1094289 10956161049263 1049263 1049263 1049263 1049263

19349 33923 40970 45026 46353

4322 7686 9785 10885 11046

2250 22501293.6 739.2

600 600 600 3001800 2400 3000 3000 3000

200 300 400 400 4006143.6 6289.2 4000 3700 3400

1749 2544 3300 3457 35034394.6 3745.2 700 243 -103

6900 4100

6900 4100

2760 4140 4960 4960 3980

23,671.26 41,609.08 50,754.85 55,911.52 57,399.76 19,348.91 33,922.90 40,969.78 45,026.43 46,353.39 4,394.60 3,745.20 700.00 243.00 (103.00) 2,760.00 4,140.00 4,960.00 4,960.00 3,980.00 (2,832.25) (199.02) 4,125.07 5,682.09 7,169.37 (1,132.90) (79.61) 1,650.03 2,272.83 2,867.75 (1,699.35) (119.41) 2,475.04 3,409.25 4,301.62

2760 4140 4960 4960 39806900 4100 0 0 0

7197.2 8190.4 6217.5 3764.3 1529.51357.9 8111.0 13652.5 12133.6 9811.1

0.84 0.77 0.71 0.65 0.60 1,142.88 6,263.18 9,671.78 7,885.99 5,850.06


Product Availability Units Sold Revenues Margins Margin/Unit Revenue/Unit73.50% 2271139 477784 58859 25.92 210.3783.10% 1415949 283549 46241 32.66 200.2576.80% 977665 185625 43678 44.68 189.8783.20% 1443156 280901 29818 20.66 194.64

1227859 178596

Cumulative Margin Improvement by Year by Wave2001 2002 2003 2004 2005

0.25% 0.25% 0.25% 0.25% 0.25%0.10% 0.25% 0.25% 0.25% 0.25%

0.13% 0.25% 0.25% 0.25%0.13% 0.25% 0.25%

Forecasted Other Expenses Savings by Year (000s US$)2001 2002 2003 2004 2005 2006

190 411 442 474 506 537135 216 324 405 405 405

72 155 230 274 288 288512 922 1024 1024 1024 1024840 840 1280 1280 1280 1280

1749 2544 3300 3457 3503 3534

4.3 million in 19998.6 million in 20006.9 million in 20014.1 million in 2002

0.6 million $ in 19990.3 million $ in 2000

5 Years0.86 in 20002.58 in 20013.96 in 20024.78 in 20034.78 in 20043.92 in 20052.20 in 20060.82 in 2007


2006 2007


57400 57400

46353 46353

3000 3000400 400

3400 34003534 3566-134 -166

2200 820

57,399.76 57,399.76 46,353.39 46,353.39 (134.00) (166.00) 2,200.00 820.00 8,980.37 10,392.37 3,592.15 4,156.95 5,388.22 6,235.42

2200 820.00 0 00 0

7588.2 7055.40.55 0.50

4,151.02 3,540.88


Cost/Unit Cost184.46 418925167.60 237308145.19 141947173.98 251083

1049263

2007569405288

102412803566

X x-x' (x-x')^2CF P CF * P CF-Sum(CF*P) (CF-CF*P)^2

12 0.1 1.2 -4 1614 0.2 2.8 -2 416 0.4 6.4 0 018 0.2 3.6 2 420 0.1 2 4 16

16

SD

X x-x' (x-x')^2NPV estim P NPV * P NPV-Sum(CF*P) (NPV-NPV*P)^2

3000 0.1 300 -6000 360000006000 0.4 2400 -3000 9000000

12000 0.4 4800 3000 900000015000 0.1 1500 6000 36000000

CF 9000

Present CF 30000 SD

profitablity Index Cash Inflow/ Cash outflow1.3

Co-efficient of variance 42%

(x-x')^2*P Y x-x'(CF-CF*P)*P CF P CF * P CF-Sum(CF*P)

1.6 8 0.1 0.8 -80.8 12 0.25 3 -4

0 16 0.3 4.8 00.8 20 0.25 5 41.6 24 0.1 2.4 84.8 Variance X' = 16

2.191 Lakhsloss

(x-x')^2*P Y x-x'(NPV-NPV*P)*P NPV estim P NPV * P NPV-Sum(CF*P)

3600000 3000 0.2 600 -60003600000 6000 0.3 1800 -30003600000 12000 0.3 3600 30003600000 15000 0.2 3000 6000

14400000 Variance X' = 9000

3794.733 Lakhs Present CF 36000

profitablity Index Cash Inflow/ Cash outflow1.25

Co-efficient of variance 49%

(x-x')^2 (x-x')^2*P(CF-CF*P)^2 (CF-CF*P)*P

64 6.416 4

0 016 464 6.4

20.8 Variance

SD 4.6 Lakhsloss

(x-x')^2 (x-x')^2*P(NPV-NPV*P)^2 (NPV-NPV*P)*P

36000000 72000009000000 27000009000000 2700000

36000000 7200000

19800000 Variance

SD 4449.7 Lakhsloss

whirlpool all four zone - capex

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