Buss Op Reeng Profile F

Business OperationsBusiness OperationsStrategy and ReStrategy and Re--engineeringengineering

20 NASSAU STREET, SUITE 244

PRINCETON, NEW JERSEY 08542

Keys to Increased Business Keys to Increased Business ProfitabilityProfitability

A Profile of REM Associates of Princeton, Inc. Resources and Capabilities

A S S O C I A T E S

MANAGEMENT CONSULTANTS

Copyright Copyright ®® REM AssociatesREM Associates Page 2

REM Associates ProfileREM Associates Profile

nn Business Operations Strategy and ReBusiness Operations Strategy and Re--engineeringengineering

nn Profile of REM AssociatesProfile of REM Associatesnn The REM Associates NetworkThe REM Associates Network

nn Functional Areas of ConsultingFunctional Areas of Consultingnn Client Industry ProfileClient Industry Profile

nn Partial Listing of ClientsPartial Listing of Clientsnn REM Associates Relevant ExperienceREM Associates Relevant Experience

nn Our Approach to Clients:Our Approach to Clients:–– AssessmentAssessment

–– Issues and ConcernsIssues and Concerns

–– Path ForwardPath Forward

nn Overview of The Business Operations Strategic Planning Process.Overview of The Business Operations Strategic Planning Process.

Our business operations strategy and re-engineering profile includes . . . .


Business Operations StrategyBusiness Operations Strategyand Reand Re--engineeringengineering

nn Intensified product, service, and market competitionIntensified product, service, and market competitionnn Innovative pricing strategiesInnovative pricing strategiesnn A constantly changing government regulatory environmentA constantly changing government regulatory environmentnn Greater emphasis on operational and working capital cost reductiGreater emphasis on operational and working capital cost reductionon

Today’s business management faces increasingly complex challenges from a variety of sources, including . . . .

In addition, increasing business pressures require management focus, decision making, and action plans directed at . . . .

nn Business technology issuesBusiness technology issuesnn Political, regulatory, and external controlsPolitical, regulatory, and external controlsnn Sociological and cultural changeSociological and cultural changenn Investment community emphasis on Investment community emphasis on ““realreal”” earnings and growth.earnings and growth.

Increasing the need for managing a company with in-depth understanding, improved knowledge, and skills not previously required in business management.



Recent assignments found that inefficiencies in business operations waste as much as 25% of an organization’s operating costs. With profit margins of 3 to 4%, even a 5% reduction in waste can double a company’s profitability. Key drivers of this value creation include . . . .

By lowering costs and increasing asset utilization, business operations can free up cash.

nn Revenue Revenue -- capacity utilization, product speed to market, stockcapacity utilization, product speed to market, stock--outs, and outs, and service to customersservice to customers

nn ExpensesExpenses -- inventory carrying costs, production and distribution costs, inventory carrying costs, production and distribution costs, transportation costs, logistics productivity, outsourcing, and atransportation costs, logistics productivity, outsourcing, and asset utilizationsset utilization

nn Capital UtilizationCapital Utilization -- working capital (inventory turns, order cycle time) and working capital (inventory turns, order cycle time) and fixed assets (plants/DC locations, fleet utilization, strategic fixed assets (plants/DC locations, fleet utilization, strategic outsourcing)outsourcing)



nn Operations and process assessmentsOperations and process assessmentsnn Data and information flows and linkagesData and information flows and linkagesnn Policies, procedures, and practices completeness, consistency, aPolicies, procedures, and practices completeness, consistency, and nd

effectivenesseffectivenessnn Organization structure and responsibilities Organization structure and responsibilities –– ownership.ownership.

Business strategy deals with planning the intermediate and longer-term direction of the business, including . . . .

Business re-engineering is directed at assessing and improving policies, procedures, and practices to improve costs, customer service, and business effectiveness, including . . . .

nn Business missionBusiness missionnn Key strategic thrustsKey strategic thrustsnn Business goals and objectivesBusiness goals and objectivesnn Action plans aimed at strategy implementation.Action plans aimed at strategy implementation.


Profile of REM AssociatesProfile of REM Associates

nn Advice and counsel in Advice and counsel in ““Business OperationsBusiness Operations””

nn Consumer and industrial companies as well as governmental organiConsumer and industrial companies as well as governmental organizationszations

nn Strategic, tactical, and contingency planningStrategic, tactical, and contingency planning

nn Operations evaluations directed at improvements:Operations evaluations directed at improvements:

–– Profit improvementProfit improvement

–– Facility operations analysis and planningFacility operations analysis and planning

–– Cost reduction and productivity improvementCost reduction and productivity improvement

–– ABC inventory costing and evaluationABC inventory costing and evaluation

–– Functional outsourcingFunctional outsourcing

–– Customer serviceCustomer service

–– Organization structure and performance.Organization structure and performance.

REM Associates, started in 1984, is now in its eighteenth year serving business clients . . . .


Profile of REM AssociatesProfile of REM Associates

nn Senior experienced business personnelSenior experienced business personnel

nn Most with over 25 years of experienceMost with over 25 years of experience

nn Careers in both consulting and business operationsCareers in both consulting and business operations

nn Variety of business disciplines Variety of business disciplines

nn Broad range of industry backgroundsBroad range of industry backgrounds

nn Strong interStrong inter--personal skillspersonal skills

nn Commitment to positive resultsCommitment to positive results

nn Support from analysis through implementation.Support from analysis through implementation.

REM Associates represents a network of over sixty experienced professionals worldwide . . . .


StockbridgeAssociates

StockbridgeAssociates

The REM Associates NetworkThe REM Associates NetworkREM Associates Network represents key business operations organizations and companies. A partial list includes . . . .

MiamiUniversity

of Ohio

MiamiUniversity

of Ohio

Bernard J.La Londe -Ohio StateUniversity

Bernard J.La Londe -Ohio StateUniversity

JosephAndraski

Group

JosephAndraski

Group

Gross&

Associates

Gross&

Associates

CGRAssociates

CGRAssociates

PrincetonComputer

Consulting

PrincetonComputer

Consulting

UniversityOf

Pennsylvania

REM AssociatesNetwork

REM AssociatesNetwork

PrincetonUniversity

PrincetonUniversity


The REM Associates NetworkThe REM Associates NetworkREM Associates provides virtually turn-key management . . . .

Policies,Procedures,

and Practices

Policies,Procedures,

and Practices

ProjectManagement

ProjectManagement

SettingGoals and Objectives

SettingGoals and Objectives

OperationsAssessment

OperationsAssessment

InventoryStrategy

InventoryStrategy

ActivityBased

Costing

ActivityBased

Costing

OrganizationAnd

Staffing

OrganizationAnd

Staffing

DistributionNetworkDesign

DistributionNetworkDesign

StrategyPlanning ThroughImplementation


Functional Areas of ConsultingFunctional Areas of Consulting

REM Associates represents a broad range of business operations skills and backgrounds . . . .

OperationsManagement

OperationsManagement

FinancialAnalysis andEvaluation

FinancialAnalysis andEvaluation

ResourceUtilization

ResourceUtilization

OrganizationalStaffing

OrganizationalStaffing

InformationSystems

InformationSystems

ForecastingAnd ProductMarketing

ForecastingAnd ProductMarketing

QualityAssurance

QualityAssurance

Outsourcingand

Alliances

Outsourcingand

Alliances

Strategicand Tactical

Planning

Strategicand Tactical

Planning



Specifically, within business operations and related functions, we are experienced in . . . .

Business Operations Management

Sourcing and Purchasing

Customer Service and Order Processing and Related Systems

Transportation Operations and Management

Warehousing & Distribution Operations

Facilities and Network Design

Production and Inventory Management

Forecasting and Sales Planning



nn Assessment, evaluation, and planning of business operations funcAssessment, evaluation, and planning of business operations functionstions

nn Evaluation of supply/demand chain functions, linkages, and strucEvaluation of supply/demand chain functions, linkages, and structureture

nn Assessment of forecasting, demand planning, and inventory manageAssessment of forecasting, demand planning, and inventory managementment

nn Development and positioning of organizational structures to suppDevelopment and positioning of organizational structures to support business ort business

operations functions and processesoperations functions and processes

nn Diagnosis and evaluation of functions and personnelDiagnosis and evaluation of functions and personnel

nn Development and specifications of operating systems requirementsDevelopment and specifications of operating systems requirements

nn Development of effective performance measurements and benchmarkiDevelopment of effective performance measurements and benchmarkingng

nn Assistance in implementation of recommendations and changes in oAssistance in implementation of recommendations and changes in operations perations

directed at cost effective improvements.directed at cost effective improvements.

We have worked for a number of manufacturers, distributors and distributor organizations. Our work has included . . . .


Client Industry ProfileClient Industry ProfileREM Associates has worked with manufacturers, wholesalers, and distributors representing a wide variety of industries . . . .

ManufacturingService and

Industry Associations

ManufacturingService and

Industry Associations

Consumer ProductsConsumer Products

nn FoodFood

nn RetailingRetailing

nn WholesalingWholesaling

nn PharmaceuticalPharmaceutical

nn PaperPaper

nn NewspaperNewspaper

nn TobaccoTobacco

nn Wines, Spirits, and Wines, Spirits, and BeveragesBeverages

Industrial ProductsIndustrial Products

nn Chemical ProductsChemical Productsnn Clay ProductsClay Productsnn Mining Mining nn Precious MetalsPrecious Metalsnn ElectronicsElectronics


Client Industry ProfileClient Industry Profile

nn The State of North CarolinaThe State of North Carolinann The State of MichiganThe State of Michigannn The County of Los AngelesThe County of Los Angeles

In addition, our work and business relationships have been international in scope, including government clients and agencies such as . . . .

Our state, city, public, and local government work has included . . . .

nn IndonesiaIndonesiann RussiaRussiann ChinaChinann TaiwanTaiwannn PhilippinesPhilippines

nn United KingdomUnited Kingdomnn IndiaIndiann PakistanPakistannn South AfricaSouth Africann MalaysiaMalaysia

nn MexicoMexiconn ArgentinaArgentinann PanamaPanamann Costa RicaCosta Ricann Etc.Etc.

Our international exposure has included countries such as . . . .

nn The City of New YorkThe City of New Yorknn The University of MissouriThe University of Missourinn Princeton University.Princeton University.


A partial listing of our clients for whom we have worked in the past include . . . .

Partial Listing of ClientsPartial Listing of Clients

nn American Stores CorporationAmerican Stores Corporationnn AnheuserAnheuser--Busch companies, Inc.Busch companies, Inc.nn Avon Products CompanyAvon Products Companynn Bankers Trust CompanyBankers Trust Companynn Becton Dickinson & CompanyBecton Dickinson & Companynn Ben & JerryBen & Jerry’’ssnn Borden CompanyBorden Companynn BristolBristol--Myers Squibb CorporationMyers Squibb Corporationnn Engelhard CorporationEngelhard Corporationnn G A F CorporationG A F Corporationnn General Electric CompanyGeneral Electric Companynn General Mills CompanyGeneral Mills Companynn GlaxoSmithKline plcGlaxoSmithKline plcnn Gulf & Western CorporationGulf & Western Corporationnn Hermes of ParisHermes of Parisnn HewlettHewlett--Packard CompanyPackard Companynn Hoechst Celanese CorporationHoechst Celanese Corporationnn Home Base CompaniesHome Base Companiesnn John Hancock Life Insurance Co.John Hancock Life Insurance Co.

nn Honeywell CorporationHoneywell Corporationnn John Morrell and CompanyJohn Morrell and Companynn KimberlyKimberly--Clark CorporationClark Corporationnn Kraft Foods CorporationKraft Foods Corporationnn Land OLand O’’ Lakes IncorporatedLakes Incorporatednn Lea & Perrins CompanyLea & Perrins Companynn Leiner Health ProductsLeiner Health Productsnn Merrill Lynch & CompanyMerrill Lynch & Companynn Milton Hershey SchoolMilton Hershey Schoolnn Nabisco Brands IncorporatedNabisco Brands Incorporatednn PepsiPepsi--Cola IncorporatedCola Incorporatednn Philip Morris CompanyPhilip Morris Companynn Princeton UniversityPrinceton Universitynn R. C. Bigelow Tea CompanyR. C. Bigelow Tea Companynn Sears Roebuck & CompanySears Roebuck & Companynn Southland CorporationSouthland Corporationnn USA TodayUSA Todaynn University of MissouriUniversity of Missourinn WarnerWarner--Lambert CompanyLambert Companynn W R Grace & CompanyW R Grace & Company


REM Associates Relevant ExperienceREM Associates Relevant Experience

nn Assessment of existing functions, processes, facilities, and opeAssessment of existing functions, processes, facilities, and operations aimed at rations aimed at costs and productivity improvementscosts and productivity improvements

nn Analysis and evaluation of functions, organization and structureAnalysis and evaluation of functions, organization and structure, linkages, and , linkages, and positioning of supply/demand chain activities to support businespositioning of supply/demand chain activities to support business goalss goals

nn Assessment and evaluation of forecasting , sales planning, and iAssessment and evaluation of forecasting , sales planning, and inventory nventory management to support distribution costs and required levels of management to support distribution costs and required levels of serviceservice

nn Evaluation of customer service functions and activities to deterEvaluation of customer service functions and activities to determine effective mine effective levels of service based on demand, cost, and business positioninlevels of service based on demand, cost, and business positioningg

nn Development of systems requirements and measures to monitor, conDevelopment of systems requirements and measures to monitor, control, and trol, and manage supply/demand chain activitiesmanage supply/demand chain activities

nn Management of implementation programs to meet timetables and milManagement of implementation programs to meet timetables and milestones estones directed at on time completion.directed at on time completion.

The scope of our engagements range from single to multiple functions beginning with assessment and planning through implementation . . . .



nn For a Major West Coast Pharmaceutical Manufacturer:For a Major West Coast Pharmaceutical Manufacturer:–– Assessed business operations to:Assessed business operations to:

»» Improve product and customer demand forecasting, including promoImprove product and customer demand forecasting, including promotional tional activityactivity

»» Reduce operational costs of functional activitiesReduce operational costs of functional activities»» Improve service to all customers, including retail, wholesale, aImprove service to all customers, including retail, wholesale, and militarynd military»» Reduce inventories and related business investments at all levelReduce inventories and related business investments at all levels, including s, including

raw materials, WIP, and finished goods.raw materials, WIP, and finished goods.–– Results of this work included:Results of this work included:

»» Inventory reduction of over 35%Inventory reduction of over 35%»» Improved customer service to over 96%Improved customer service to over 96%»» Increased major customer inIncreased major customer in--stock position to over 97%stock position to over 97%»» Reorganized key management functions and responsibilities while Reorganized key management functions and responsibilities while

significantly improved communications, decision making, and timesignificantly improved communications, decision making, and timeliness of liness of management actions.management actions.

A sampling of our client engagements includes . . . .



nn A Large Consumer Product CompanyA Large Consumer Product Company::–– Assessed and evaluated business operations functions, linkages, Assessed and evaluated business operations functions, linkages, tasks, and activitiestasks, and activities

–– Developed an integrated business operations strategy directed atDeveloped an integrated business operations strategy directed at reduced costs and increased reduced costs and increased customer service levelscustomer service levels

–– Positioned sourcing, sales, manufacturing, and distribution to ePositioned sourcing, sales, manufacturing, and distribution to effectively support market and ffectively support market and customer focuscustomer focus

–– Evaluated deployment of inventories based on forecasted demand pEvaluated deployment of inventories based on forecasted demand pull to the marketplace in ull to the marketplace in order to strengthen support services to customersorder to strengthen support services to customers

–– Recommended and planned implementation for an integrated supply Recommended and planned implementation for an integrated supply chain strategy.chain strategy.

nn A Fortune 100 Pharmaceutical CompanyA Fortune 100 Pharmaceutical Company::–– Set up multiSet up multi--country (14) teams for implementing production and resource plancountry (14) teams for implementing production and resource planningning

–– Worked with inWorked with in--country company teams to implement planned changescountry company teams to implement planned changes

–– Evaluated and recommended operations improvements within countriEvaluated and recommended operations improvements within countrieses

–– Monitored and directed progress toward program goals and objectiMonitored and directed progress toward program goals and objectivesves

–– Conducted and managed program reviews to make sure timelines werConducted and managed program reviews to make sure timelines were mete met

–– Completed almost two year program ahead of schedule.Completed almost two year program ahead of schedule.

In addition, a sampling of our client engagements includes . . . .


Our Approach to Clients Our Approach to Clients –– 1. Assessment1. Assessment

nn Client operations size and basic structureClient operations size and basic structure

nn Classes of products, facilities, and customers servedClasses of products, facilities, and customers served

nn Key business strategic issues and concernsKey business strategic issues and concerns

nn Operations network including sales, distribution, customer serviOperations network including sales, distribution, customer service, and related ce, and related

functionsfunctions

nn Customer service goals and objectivesCustomer service goals and objectives

nn Operations goals and objectives.Operations goals and objectives.

Our initial approach to clients begins with an assessment. In order to form a solid base of understanding, we determine critical characteristics of our client’s business in terms of . . . .


Our Approach to Clients Our Approach to Clients –– 2. Issues and Concerns2. Issues and Concerns

nn Present and planned business initiativesPresent and planned business initiatives

nn Specific operations issues:Specific operations issues:

–– Forecasting and sales demand planningForecasting and sales demand planning

–– Inventory managementInventory management

–– Warehousing and TransportationWarehousing and Transportation

–– Other operations related issuesOther operations related issues

nn Current key projects within operating functionsCurrent key projects within operating functions

nn Priority, sequence, and timing of implementation of near and lonPriority, sequence, and timing of implementation of near and longerger--

term initiatives.term initiatives.

In order to focus our response and meet client specific needs, we need to understand company issues and concerns. For example . . . .


Our Approach to Clients Our Approach to Clients –– 3. Path Forward3. Path Forward

nn Goals and objectives of REM Associates assistanceGoals and objectives of REM Associates assistance

nn Structure and content of a proposal to respond to your needsStructure and content of a proposal to respond to your needs

nn Requirement for site and/or functional visitsRequirement for site and/or functional visits

nn Data needed in order to understand and scope the detail of workData needed in order to understand and scope the detail of work

nn Point person for questions and clarificationPoint person for questions and clarification

nn Timetable for decision making and program completion.Timetable for decision making and program completion.

As a result of initial meetings, we form an understanding and plan a path forward in response to your needs, concerns, and plans . . . .

Overview of The Business Overview of The Business Operations Strategic Planning Operations Strategic Planning

ProcessProcess


The logic of business operations strategy relates directly to the flow of products, information, and costs through the business and to thecustomer . . . .

Overview of The Business Operations Overview of The Business Operations Strategic Planning ProcessStrategic Planning Process

Manufacturing Sales & Distribution Customer

Products

Information

Costs

Revenue

Flows:

Sourcing


There are several levels of business logistics between the product source and the customer . . . .


CustomerPlant

Primary

Distribution

Secondary

Distribution

Tertiary

Distribution

Direct Distribution Large

Chains

Small

Independents

Sourcing


Strategic planning issues are generally of a broader scope than those of day-to-day operations issues . . . .

Business Mix

Market

Definition

Customer

Mix

Product

Mix

Operations

& Service

Mix

For

ecas

t D

eman

d by

Pro

duct

For

ecas

t V

aria

tion

Serv

ice

by C

lass

of

Cus

tom

er

S K

Us

Pro

duct

C

hara

cter

isti

cs

Fac

ility

Siz

e

Fac

ility

L

ocat

ion

Fac

ility

Ser

vice

A

rea

Strategy

Operations

UniquenessType



The hierarchy of business operations strategic planning begins with customers and service . . . .

Facilities

Investment

Facilities

Investment

MIS Equipment Investment

Inventory Investment

Transportation Equipment Investment

MIS Equipment Investment

Human Resource

Investment

Customer Service

Goals and Objectives

Customer Service

Goals and Objectives

Inventory Goals

Deployment Strategies and

Programs

Warehousing Strategies and

Programs

Transportation Strategies and

Programs

Systems and Procedures

Strategies and Programs

Organization Strategies and

Programs

Order Processing

Strategies and Programs



A number of factors must be evaluated to determine the best cost and service mix in a strategic business operations structure . . . .

§§ Number of warehousesNumber of warehouses§§ Location of warehousesLocation of warehouses§§ Shipment modesShipment modes§§ Size of shipmentsSize of shipments§§ Frequency of shipmentsFrequency of shipments§§ Shipment consolidationShipment consolidation§§ Operating methodsOperating methods§§ Storage requirementsStorage requirements§§ Regulatory requirementsRegulatory requirements

§ Order processing times§ Customer service§ Operations§ Transportation

§ Inventory service§ Stock vs. non-stock§ In-stock position

§ Delivery reliability§ Freight consolidation

holding times§ Information systems

§ Stock vs. non-stock§ In-stock position§ Variability of demand

§ Frequency of replenishment§ Transit times§ Inventory carrying costs

COST: SERVICE:

INVENTORY:



An effective business operations strategy requires the balancing of conflicting management objectives . . . .

nn High customer serviceHigh customer service

nn Low warehousing costsLow warehousing costs

nn Low transportation costsLow transportation costs

nn Reduced inventoriesReduced inventories

nn Fast deliveriesFast deliveries

nn Reduced labor costsReduced labor costs

nn Desired resultsDesired results

Logistics Objectives:

Impact of Objectives on:

Inventory:

Customer

Service: Costs:



The planning process must evaluate alternatives and recommend the most cost and service effective plan for total business logistics . . . .


Product/

Market

Environment

Develop a Segmented Set of Strategic Success

Requirements

Define Business Operating

Mission

Identify Strategic

Deployment Alternatives

Develop Business

Operating Objectives

Identify Strategic

Operating Alternatives

Define Demand Chain Operating

Objectives

Define

Strategic

Objectives

Develop a Preferred

Operations Strategy and its Implementation

Execute

Implementation

Plan

ASSESS

PHASE I PHASE II PHASE III

Operating

Environment

SCREEN

SCREEN


A S S O C I A T E SMANAGEMENT CONSULTANTS

20 NASSAU STREET, SUITE 244PO BOX 7345

PRINCETON, NEW JERSEY 08543-7345Phone: 609-275-4444

Fax: 609-275-5651E-Mail: [email protected]

web: http://www.remassoc.com

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