Claire - Overview of Danker.
Conor - Main issues and logistics management.
Niall - The approach of management and the issues raised.
Maria - Analysis of forecasting.
Ali - Recommendations.
Long established Craft manufacturer based in county Meath.
They can trace origins back 5 generations.
The business is now under the management of Rolf Danker
The strategic focus of the business is growth
through new products and services.
Danker had a great period of growth in the
1990’s due to the economic boom in the
construction sector in Ireland.
Danker expanded into the cabinetry business
which was a huge success for them.
However the expansion also highlighted
problems in the business, with the extra
responsibility causing missed deadlines and
quality to suffer.
• Poor Forecasting
• Lack of expertise
• Sales Decreasing
0
2000
4000
6000
8000
2005 2006 2007 2008 2009 2010 2011
t ot al sal es r evenue€ 000
39504200
5150
6850 6450 62505941
year s
t ot al sal es
r evenue( € 000)
years 2005 2006 2007 2008 2009 2010 2011
"total sales revenue
(€000)"
3950 4200 5150 6850 6450 6250 5941
2010
2011
Sal es Revenue 2010( € 000)Qt r . 1,
1, 000, 16%
Qt r . 2, 2000, 32%Qt r . 3,
2200, 35%
Qt r . 4, 1050, 17%
Qt r . 1
Qt r . 2
Qt r . 3
Qt r . 4
Sal es Revenue 2011( € 000)
Qt r . 1, 1450, 24%
Qt r . 2, 1513, 25%
Qt r . 3,
1525, 26%
Qt r . 4,
1453, 25%
Qt r . 1
Qt r . 2
Qt r . 3
Qt r . 4
Executive opinion◦ The views of executives from sales and other fields
◦ To generate a forecast about future sales
◦ Forecast modified based on managements opinions and expectations
Executive opinion◦ Sales manager
◦ CEO
◦ Discussed breakdown of market demand
Home improvements
New house builders
◦ “The marketing effort is fine” – no need for increase in cost
Trend analysis◦ An aspect of technical analysis that tries to predict
the future movement of a stock based on past data.
◦ Trend analysis is based on the idea that what has happened in the past gives traders an idea of what will happen in the future.
Trend analysis◦ Annual percentage Sales Trend per Quarter in 2010
◦ Qtr. 1: 16% - €1000
◦ Qtr. 2: 31% - €2000
◦ Qtr. 3: 35% - €2200
◦ Qtr. 4: 18% - €1050
◦ Total: 100% - €6250
Forecasting
Preparation of financial statements Price quotations Costs estimation
Only estimates Allowances made for inaccuracy Longer periods – greater uncertainty
Executive Opinion
Quick and easy
The only means of forecasting in the absence of adequate data
Vague and inaccurate
Virtually wrong
Biased – too optimistic/pessimistic
Trend Analysis
Moving average
Simple and useful in a stable market
Change in market’s dynamics - growth rate swings
Inaccurate estimates impact future trends
Sales revenue decreased in 2011. Due to the nature of the business and the industry it is in it is likely that future growth would be optimistic.
In the short term a capacity freeze would be wise.
Benefits - wouldn’t be faced with excess inventory which would be a cost to the firm.
Disadvantages – could lose sales to competition. (increase part-time work to deal with high demand)
As we can see stagnant growth we could reduce working hours and try re-negotiate costs for raw materials.
Recommend have a level output plan. Although it relies on forecasts it would allow us to manage our directs costs more effectively. Forecasted quarter sales in 2011- similar 24%-26%
Can put an EDI system in place, this will increase the speed of transactions and also make the company more efficient. – fewer stock outs.