Handout 2014 Updatאed

8/12/2019 Handout 2014 Updatאed

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Alex Coman.or Tel: 972 3-510-1768 -1- WWW.Coman.Or Value Creation

Value Creation Copyright 2008 Alex Coman

Value CreationProfit, People, Planet

Arena:Business, Regulator, Information

Supply chain Focus:

Pareto,Ease/Value

Vision/Megatrends:Leadership = Vision+ Ability to execute

Political, Economic, Social,Technological

Creative destruction:Groupthink, Analysis ParalysisPolarity (internal conflict)

SWOT: good model; No toolsOpportunities:

Ansoff = Generator Innovation funnel = Investment Forecasting = Value assessment

Threats:Sources/Destination Stress testPrevent/Mitigate

Strengths/Weaknesses:Event Factor Analysis Root Causes/Core competences Scorecard

Control cycle = P4A: Process

6 Performance measures Pareto Problems=Ishikawa Fishbone Action

Learning Curve

Note Hyperlink to slides





HorizontalValue Chain:

Integration:Vertical

Control Information

Relationships:

Business

Monopoly/ Regulatory Agency

Entities:

Market

Firm/Coalition

Drugs

Teva

Farmer

DairyDistributor

Retailer

Consumer

Low

High

FDASyntax

Vocabulary

Structure

Concise:

Link Markets rather than Firms

Business implies information flow.

Titles on significant arrows.

Pertinent entities only.

Web

ARENA Canonical Form

UpBack

Push

DownForward

Pull





Distributors

Care Corporate Arena-Health

Drug ManufacturersInnovative Generic

GSK Teva

FDA Ministry of Health GMP

CTS Lemon

Health Management Org.

Clalit

Vitamed

Macabi

Physicians

Public

Prescription

Lis

t

PharmaciesMacabi

Prescription Drugs Over the Counter

ShorTab

Advertising

IMS

SuperPharm

Web

ProductSpecialists

Glaxo IL

Teva Ivax

DiseaseManagement

AmericanHospitalSupplies

Telemedicine

Shahal

eMed

EDI

Admin





Textile Arena

Garment Manufacturers

FarEast

Labels

Victoria‟s Secret

Customers

Retailers

Fabric

GAP

GAP

FarEast

CK

Macy‟s

Benetton

Benetton

BenettonWalmart

Inditex‟7923 Robot

cut & Die #3>40%

Zara467Stores

Zara „75

400 SmallShops>50% Delta

Delta

H&M900

suppliers

H&M

InnerSecret

Tefron

HiTex

St.Michael

M&S

Solog

25-35years Anti Gap

Older&Wealthier

College CrowdTrendy Urban

Late TeensCost Conscious

Girls 12+UpCheap cool





shoring-Virtual Firm: off

South Korea:Spinning

Five Tai sewingworkshops

Shipper

Distributor

Japanese plant inGuangdong China:

zippers

Customer

European fashiondesigner

Orders thousandsof garments(Virtual Firm)

Agility: Value NetLi&Fung: 3,600 employees in 37 countries: Logistics

Li&Fung

http://www.lifung.com/static.html








are o

S h a r e o f t o t a l r e v e n u

e

Income Group

80%

100%

“B”

30% ofpopulation10% of

resources

“C”

50% of population10% of resources

20%

90%

30% 50% 100%

“A”

Significantfew:20% of

population80% of

resources

B

C

ClassifyDifferentiate





Pareto

0

20%

40%

60%

80%

100%

1

45

15%25%

50%

4

15%

25%

50%

5

S h a r e o f t o t a l r e

v e n u e

Income Group

20%

40%

60%

80%

100%

Distribution of US federal Income-tax revenue by income group


http://slidepdf.com/reader/full/handout-2014-updated 8/32 Alex Coman.or Tel: 972 3-510-1768 -8- WWW.Coman.Or Value Creation

Value Creation Copyright 2008 Alex ComanFocus: 25% / 25%

Value

Expected

High80%

Oyster4%

Pearl – 16%4%Effort=64%Value

Low

White

Elephant64%E=

4%V

Quick Wins64%

Difficult

80%

Easy

Ease to Im lement




Ansoff Ansoff

Product Line

Old New

M

A

R

K

E

T

New

Market Development:

Diversification: (3/4 failure)

Old

Market Penetration Product Development:The Firm

Old Market

OldFirm

Old MarketOld

The Firm

OldMarket

OldNew

Market

Old

New

Firm

NewMarket

New

Firm

OldMarket

Old

Firm

Breadth

Market Development Product Development

Depth

Vertical

Depth DepthBoutique

Penetration Diversification

V l C i C i h 2008 Al C




BritVic

V l C ti C i ht 2008 Al C



Value Creation Copyright 2008 Alex ComanGovernance

E x t e r n a l

Threat

Internal

Strategic Financial

Market

Operational

Prevent Mitigate

Crisis

Value-at-Risk





Probability

Stress:

Exposure/

Value At Risk

Threat

Position0

Crisis

Capture

H e d

g e

Threat

Position1 E n g a g e

Bar

Threat

Governance





Event-Factor-Review – EFR

Event FactorsOutcome Description Value Strengths Weaknesses

Success

Failure


E t F t R i



Value Creation Copyright 2008 Alex ComanEvent-Factor-ReviewFactorEvent

WeaknessesStrengthsDescriptionOutcome•Product not

differentiatedenough.

New marketsrequire

“education”.

Rapid multidisciplinary

product development.Good engineering and

production.Good interdisciplinary

communications.

Winning atier 1

customercontract

Success Sales to market leaders.Technological innovation

and professionalism.Choice people working in acreative atmosphere.High employee motivation.

Leading asignificanttechnical

standardscommittee

The firm is

losing money.

Strong sales department.

High sales growth rate.

Exceedingsalestargets


E t F t R i



Value Creation Copyright 2008 Alex ComanEvent-Factor-ReviewFactor Event

WeaknessesStrengthsDescriptionOutcome

Small player in giants‟playground.

Technologicalleadership.

Failure to sell

to the leadingcompany inthe market

Failure

Product over-specificationand over-design. No access to the end-user Insufficient R&D strategicgating.High burn rate.

Losing moneyover a periodof 3 years

Excessive technologicalorientation.No awareness of mergersand acquisition (M&A)

potential.

Failure inM&Anegotiationswith aleading player

in the industry





Core-Competence-Tree - CCTOwner Value was created

High Sales Growth rate Sales to Market Leaders

Strong SalesDepartment

Good Engineering

And Production

Good Inter-functionalCommunications

Technological Innovationand Professionalism

Influence inStandardsCommittee

Rapid multidisciplinarySystem viewDevelopment

High employeeMotivation

Sales and Partnership withLeading Firms

TechnologicalLeadership

Vision, Leadership and Managerial Ability

Choice People working in anatmosphere of excellence

Core Competencies





Root Problems

Current-Reality-Tree - CRTFirm‟s Market Value is Insufficient

The Firm is Losing MoneyNo Exit

New marketsRequire “Education”

Product NotDifferentiated Enough

No access toThe end User

Low Profitability

Not enough StrategicGating in R&D

Product Over-Specificationand Over-Design

No Awareness toM&A Objectives

Excessive TechnologyOrientation

High BurnRate

Small PlayerIn Giants‟ Arena

Focus on singleNew Technology


urren ea y ree

Current Reality Tree: CRT



Value Creation Copyright 2008 Alex Comanurren - ea y- reeCurrent-Reality-Tree: CRT Major Un-Desired Effect8-12 Un-Desired Effects (UDE): Brainstorm

CurrentConcreteUndesiredUnder our influence

Schema Arrows pointing from cause to effect.Effects at top, Causes at bottom.Root Problems ≈ 3

Feedback loops.


TreeRealityCurrent




Long

DevelopmentProcess

Tree-Reality -Current High Product Cost

Low ForecastReliability

Lack of DFX

Planning

High mixLow volume

ExpensiveInfrastructure

MarketConditions

Competition

Buyers‟Market

BusinessMeasurement ($)

InformationFlow in org.

Lack ofSynchronization

Informationsystems

Forgiveness

Lack ofStructuredprocesses

Incompletedevelopment

Lack ofknowledge

Marketingpolicy

Lack of

commonality

No valueengineering

Outdatedtechnology

Low ProductMaturity

Resourcemanagement

Org. size &complexity

Culture

TTM Marketconditions

Sales Processmanagement






P4A: Control Cycle




ProcessPerformanceControl Chart

Pareto

P4A: Control Cycle

WI P

B MT

N oK i t

C o s t

A c c o un t i n g

Action DeploymentWho What When

B o t t l en e c k

Problems: CRT

P4AExploit: Strategic Gating

Utilize: GarbageSubordinate: DBR – Tactical Gating

Elevate: Offload

J o b S i z e

S e t u p


Value Measures



Value Creation Copyright 2008 Alex ComanValue Measures

6 Value drivers

Financial:Throughput = Sales – Direct Expenses;Operating Expenses: less people or more productivity

Competitive:Lead Time=Time(Finish –Start)=Work + Wait.Due-Date-Performance

Functional:Inventory: Raw materials+Work-In-Process+Finished Goods

QualityRobust: Problems per Million Agile: Customization


1Process:



Value Creation Copyright 2008 Alex Coman.1Process:Aircraft TurnaroundCritical Path Model

ONBLOCK

Aircraft Unloading32 minutes

Connecting Stairs/Jetty7 minutes

Deplaning Passengers17 minutes

Recharge Catering22 minutes

Cleaning Aircraft33 minutes Fueling Aircraft

32 minutesCabin Security Check

8 minutes

Boarding Passengers38 minutes

Aircraft Loading44 minutes

OFFBLOCK

B747

ONBLOCK

Connecting Stairs/Jetty7 minutes

Deplaning Passengers17 minutes

Cleaning Aircraft33 minutes

Cabin Security Check8 minutes

Boarding Passengers38 minutes

OFFBLOCK

2 Per ormance



8 3 . 5

7 8 . 9

8 0 . 6

8 5 . 1

9 1 . 8

8 6 . 2

8 5 . 3

6 7 . 9

8 2 . 5

7 1 . 7

7 0 . 0

8 3 . 6

8 4 . 0

7 9 . 4

0

10

20

30

40

50

60

70

80

90

100

May

'05

Jun

'05

Jul

'05

Aug

'05

Sep

'05

Oct

'05

Nov

'05

Dec

'05

Jan

'06

Feb

'06

Mar

'06

Apr

'06

May

'06

Jun

'06

Jul

'06

Aug

'06

Front ier Performance Industry Best Industry Average Industry Worst

On Time Arrival Performance

U.S. DEPARTMENT OF TRANSPORTATION PERFORMANCE RANKINGSFRONTIER OPERATIONAL PERFORMANCE vs. The Industry

P e r c e n t a g e o f A r r i v a l s w i t h

i n 1 4 M i n u t e s o f S c h e d u l e

Rankings shown above compare “major” carriers with similar operations. These

carriers include: Frontier Airlines, Northwest Airlines, American Airlines, AirTran Airways, Southwest Airlines, Delta Airlines, US Airways, Alaska Airlines, JetBlue

Airways, United Airlines, Continental Airlines & ATA Airlines.

Over the last 15 months,Frontier has led all majorcarriers in On Time

Performance 8 times.

2. Per ormance


Pareto3




0%

10%

20%

30%

40%

50%

60%

. Pareto3

Reactionary

Technical

Air TrafficControl

OperationsWeather

PassengersOther


P bl4



Value Creation Copyright 2008 Alex Coman. Problems4

Ishikawa / Fishbone AnalysisReactionary Delay

ReactionaryDelay

AIRCRAFTROTATIONlate arrival of aircraftfrom another flight or

previous sector

LOADCONNECTIONawaiting load from another

flight

THROUGHCHECK-IN

ERROR

passenger andbaggage

CABINCREW

ROTATIONawaiting cabin crewfrom another flight

CREWROTATION

awaiting crew fromanother flight (flight deck

or entire crew)

OPERATIONSCONTROL

re-routing, diversion,consolidation, aircraft change

for reasons other thantechnical


Swimming lanes




Value Creation Copyright 2008 Alex Coman. Action5

Action Deployment

Gap

Process Resource



I n s t r u m e n t S y n t h e s i s & A n a l y s i s L a b o r a t o r y

PRICE H Cost Model, p30

Final Version

25 April 2003MAXIM Periscope Module

MAXIM Periscope Module Learning Curves

Learning Curve Next Unit Production Cost

$0$500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

$3,000,000

$3,500,000

$4,000,000

1 7 1 3

1 9

2 5

3 1

3 7

4 3

4 9

5 5

Production Unit

MAXIM PRICE H90% Learning Curve

85% Learning Curve

75% Learning Curve

Control Cycle: P4A Copyright 2006 Dr Alex Coman

o ust es gn



[email protected] Tel:(972)3-510-1768 -31- WWW.Coman.org Control C cle: P4A

Control Cycle: P4A Copyright 2006 Dr.Alex Comano ust es gnCost of [Lack of] Quality: X10 Law

250%:

380%Spec

General

Planning

Coding

Acceptance

Testing

1

10

100

Specifications Detailed

Desi n

Test Runs Operation

3

25

6

55

185

100%

Code

70%

Use

75%Test

47%None

240Exposed

1Complaint

24Damaged

: eory onstra nts



: eory onstra nts

שיש לעש ת י תר עם מGate- נ פ Gear-ף נ מ

5%/25%

ז –0מצה

מש י100%נצל -

צוו ר ק וק

Offload

פף פף

Handout 2014 Updatאed

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