Project Planning Sales

8/12/2019 Project Planning Sales

1/29

ACADEMY OF ECONOMIC STUDIES OF MOLDOVA

FACULTY OF INTRNATIONAL ECONOMIC RELATIONS

DEPARTMENT OF INTERNATIONAL ECNOMIC RELATIONS

ADEOLA Sodeeq Adedoyin

PLANNING THE SALES WITHIN THE

COMPANIES WITH FOREIGN TRADE ACTIVITY

PROJECT IN IER

Speci !i" #ion Wo$!d Econo%y nd IER

A'o$(

student of group EMREI 123,full-time study

ADEOLA Sodeeq Adedoiyn

________________________ (signature)

Scientific coordinator:

P !", #ssoc"prof" Rodica $R%!% ________________________

(signature)

$ isinau & 2'1(


2/29

PLAN

INTRODUCTION))))))))))))))))))))))

))***+

CHAPTER I , GLO-AL MAR.ETING STRATEGIES))))))***

))/

0*0 S&%% $y o1 2!o3 ! % $4e#in2

5#$ #e2ie5))))))))))))))/

0*6 G!o3 ! % $4e# en#$y

5#$ #e2ie5)))))))))))))))))*)7

CHAPTER II , GLO-AL SALES

STRATEGIES)))))))))))*0/

6*0 G!o3 ! 5 !e5 5#$ #e2ie5 8 p! nnin2 nd

! &nc'in2))))))))))

6*6 S#$ #e2ic 5 !e5 p! n 8 4ey

co%ponen#5))))))))))))))**6*+ C 5e

5#&dy))))))))))))))))))))))))))

CONCLUSIONS)))))))))))))))))))))))

))

REFERENCES))))))))))))))))))))))))

)**+6


3/29

INTRODUCTION

) e first significant glo*al acti+ity *y a domestic firm is t e importing and

e porting of goods and ser+ices" ) e purpose of t is paper is to analy e t e international

trade p ase for a domestic firm t at *egins to import goods and ser+ices from foreign

suppliers and to e port to foreign *uyers"

Managers around t e glo*e are recogni ing t e increasing necessity for t eir

companies and organi ations to de+elop t e s.ills, aptitudes and .no/ledge to compete

effecti+ely in international mar.ets" ) e emergence of a more open /orld economy, t e

glo*ali ation of consumer tastes and t e una*ated e pansion of Internet access glo*ally

all increase t e interdependency and interconnections of nation economies across t e

glo*e") e need for managers to de+elop t e s.ills to respond to t ese pressures affects

companies of all si es"

) ere are se+eral /ays to e+aluate t e e port potential of your products and

ser+ices in o+erseas mar.ets" ) e most common approac is to e amine t e success of

your products domestically" If your company succeeds at selling in t e domestic mar.et,

t ere is a good c ance t at it /ill also *e successful in mar.ets a*road, at least t ose

/ ere similar needs and conditions e ist"

#not er means to assess your company0s potential in e porting is *y e amining

t e uni ue or important features of your product" If t ose features are ard to duplicate

a*road, t en it is li.ely t at you /ill *e successful o+erseas" # uni ue product may a+e

little competition and demand for it mig t *e uite ig "

inally, your product may a+e e port potential e+en if t ere are declining sales in

t e domestic mar.et" Si ea*le e port mar.ets may still e ist, especially if t e productonce did /ell in your country, *ut is no/ losing mar.et s are to more tec nically

ad+anced products" t er countries may not need state-of-t e-art tec nology and4or may

*e una*le to afford t e most sop isticated and e pensi+e products" Suc mar.ets may

a+e a surprisingly ealt y demand for domestic products t at are older or considered

o*solete *y domestic mar.et standards"

In $ apter I, /ill *e introduced t e concepts of international mar.eting, ena*ling

t em to ac uire an appreciation of t e comple ities of mar.eting on an international *asis


4/29

and of o/ t is acti+ity differs from operating purely in domestic mar.ets" In t e

follo/ing sections /ill *e defined international mar.eting, e amine t e important trends

in t e glo*al mar.eting en+ironment and introduce t e reader to t e international

mar.eting strategy de+elopment and international mar.eting planning process"

In $ apter II I /ill present some guidelines of a n International 5usiness Plan"

It /ill ser+e as a step-*y-step guide to lead you t roug t e process of e porting your

product to an international mar.et" ) is /ill *e ready and de+eloped international

*usiness plan to e port your product"


5/29

CHAPTER I

GLO-AL MAR.ETING STRATEGIES

0*0 S&%% $y o1 2!o3 ! % $4e#in2 5#$ #e2ie5

%sually, selling focuses on t e needs of t e seller, mar.eting on t e needs of t e

*uyer 6customer7" ) e purpose of *usiness is to get and .eep a customer" International

mar.eting in+ol+es t e mar.eting of goods and ser+ices outside t e organi ation8s ome

country"

Multinational mar.eting is a comple form of international mar.eting t at engages

an organi ation in mar.eting operations in many countries" 9lo*al mar.eting refers to

mar.eting acti+ities coordinated and integrated across multiple mar.ets"

# firm8s o+erseas in+ol+ement may fall into one of se+eral categories:

1" Domestic: perate e clusi+ely /it in a single country"

2" Regional exporter: perate /it in a geograp ically defined region t at crosses

national *oundaries" Mar.ets ser+ed are economically and culturally omogenous" If

acti+ity occurs outside t e ome region, it is opportunistic"

3" Exporter: Run operations from a central office in t e ome region, e porting finis ed

goods to a +ariety of countries some mar.eting, sales and distri*ution outside t e ome

region"

(" International: Regional operations are some/ at autonomous, *ut .ey decisions are

made and coordinated from t e central office in t e ome region" Manufacturing and

assem*ly, mar.eting and sales are decentrali ed *eyond t e ome region" 5ot finis ed

goods and intermediate products are e ported outside t e ome region"

/* International to global: Run independent and mainly self-sufficient su*sidiaries in a

range of countries" ; ile some .ey functions 6R

decentrali ed, t e ome region is still t e primary *ase for many functions"9*Global: =ig ly decentrali ed organi ation operating across a *road range of countries"

>o geograp ic area 6including t e ome region7 is assumed a priori to *e t e primary

*ase for any functional area" Eac function including R

mar.eting and sales is performed in t e location6s7 around t e /orld most suita*le for

t at function" )ec nology and glo*ali ation s ape t e /orld" ) e first elps determine

uman preferences t e second, economic realities" Standardi ed consumer products, lo/

price and tec nology are .ey points for successful glo*ali ation"


6/29

) e glo*ali ation of mar.ets is at and" ;it t at, t e multinational commercial

/orld nears its end, and so does t e multinational corporation" ) e /orld8s needs and

desires a+e *een irre+oca*ly omogeni ed 6mar.et needs7" ) is ma.es t e multinational

corporation o*solete and t e glo*al corporation a*solute" >o*ody is safe from glo*al

reac and t e irresisti*le economies of scale 6reduction of costs and prices7 and scope"

) e multinational and glo*al corporation is not t e same t ing" ) e multinational

corporation operates in a num*er of countries and ad?usts its products and practices in

eac at ig relati+e costs" ) e glo*al corporation operates /it resolute constancy at lo/

relati+e cost 6price7 as if t e entire /orld 6or ma?or regions of it7 /ere a single entity it

sells mar.ets t e same ig - uality t ings similarly e+ery/ ere" 5ut, many glo*al firms

produce t e same products t e same /ay for a glo*al mar.et *ut tailor t eir selling

approac es to local +ariations in t e glo*al mar.et"

) e modern glo*al corporation contrasts po/erfully /it t e aging multinational

corporation" Instead of adapting to superficial and e+en entrenc ed differences /it in and

*et/een nations, it /ill see. sensi*ly to force suita*ly 6more or less7 standardi ed

products and practices on t e entire glo*e" 6t in. glo*ally, act locally7"

#lt oug some /ould stem t e foreign in+asion t roug protecti+e legislation,

protectionism in t e long run only raises li+ing costs and protects inefficient domestic

firms 6national controls7" ) e rig t ans/er is t at companies must learn o/ to enter

foreign mar.ets and increase t eir glo*al competiti+eness" irms t at do +enture a*road

find t e international mar.etplace far different from t e domestic one" Mar.et si es, *uyer *e a+ior and mar.eting practices all +ary, meaning t at international mar.eters

must carefully e+aluate all mar.et segments in / ic t ey e pect to compete"

; et er to compete glo*ally is a strategic decision 6strategic intent7 t at /ill

fundamentally affect t e firm, including its operations and its management" or many

companies, t e decision to glo*ali e remains an important and difficult one 6glo*al

strategy and action7" )ypically, t ere are many issues *e ind a company@s decision to

*egin to compete in foreign mar.ets" or some firms, going a*road is t e result of a

deli*erate policy decision 6e ploiting mar.et potential and gro/t 7 for ot ers, it is a

reaction to a specific *usiness opportunity 6glo*al financial turmoil, etc"7 or a competiti+e

c allenge 6pressuring competitors7"

5ut, a decision of t is magnitude is al/ays a strategic proacti+e decision rat er

t an simply a reaction 6learning o/ to *usiness a*road7"

Reasons for glo*al e pansion are mentioned *elo/:

a7 pportunistic glo*al mar.et de+elopment 6di+ersifying mar.ets7

*7 ollo/ing customers a*road 6customer satisfaction7


7/29

c7 Pursuing geograp ic di+ersification 6climate, topograp y, space, etc"7

d7 E ploiting different economic gro/t rates 6gaining scale and scope7

e7 E ploiting product life cycle differences 6tec nology7

f7 Pursuing potential a*road

g7 9lo*ali ing for defensi+e reasons

7 Pursuing a glo*al logic or imperati+e 6ne/ mar.ets and profits7

Moreo+er, t ere can *e se+eral reasons to *e mentioned including comparati+e

ad+antage, economic trends, demograp ic conditions, competition at ome, t e stage in

t e product life cycle, ta structures and peace" )o succeed in glo*al mar.eting

companies need to loo. carefully at t eir geograp ic e pansion" )o some e tent, a firm

ma.es a conscious decision a*out its e tent of glo*ali ation *y c oosing a posture t at

may range from entirely domestic /it out any international in+ol+ement 6domestic

focus7 to a glo*al reac / ere t e company de+otes its entire mar.eting strategy to glo*al

competition" In t e de+elopment of an international mar.eting strategy, t e firm may

decide to *e domestic-only, ome-country, ost-country or regional4glo*al-oriented"

Eac le+el of glo*ali ation /ill profoundly c ange t e /ay a company competes

and /ill re uire different strategies /it respect to mar.eting programs, planning,

organi ation and control of t e international mar.eting effort" #n industry in / ic firm

competes is also important in applying different strategies"

)rac.ing t e de+elopment of t e large glo*al corporations today re+eals a

recurring, se uential pattern of e pansion" ) e first step is to understand t e internationalmar.eting en+ironment, particularly t e international trade system" Second, t e company

must consider / at proportion of foreign to total sales to see., / et er to do *usiness in

a fe/ or many countries and / at types of countries to enter" ) e t ird step is to decide

on / ic particular mar.ets to enter and t is calls for e+aluating t e pro*a*le rate of

return on in+estment against t e le+el of ris. 6mar.et differences7" ) en, t e company

as to decide o/ to enter eac attracti+e mar.et" Many companies start as indirect or

direct e port e porters and t en mo+e to licensing, ?oint-+entures and finally direct

in+estment t is company e+olution as *een called t e internationali ation process"

$ompanies must ne t decide on t e e tent to / ic t eir products, promotion, price and

distri*ution s ould *e adapted to indi+idual foreign mar.ets" inally, t e company must

de+elop an effecti+e organi ation for pursuing international mar.eting"

Most firms start /it an e port department and graduate to an international

di+ision" # fe/ *ecome glo*al companies / ic means t at top management plans and

organi es on a glo*al *asis 6organi ation istory7"


8/29

0*6 G!o3 ! % $4e# en#$y 5#$ #e2ie5

E porting represents t e least commitment on t e part of t e firm entering a

foreign mar.et" E porting to a foreign mar.et is a strategy many companies follo/ for at

least some of t eir mar.ets" Since many countries do not offer a large enoug opportunity

to ?ustify local production, e porting allo/s a company to centrally manufacture its

products for se+eral mar.ets and t erefore to o*tain economies of scale"

urt ermore, since e ports add +olume to an already e isting production

operation located else/ ere, t e marginal profita*ility of suc e ports tends to *e ig " #

firm as t/o *asic options for carrying out its e port operations" ) e form of e porting

can *e directly under t e firm@s control or indirect and outside t e firm@s control" It can

contact foreign mar.ets t roug a domestically located 6in t e e porter@s country of

operation7 intermediary-an approac called indirect e porting" #lternati+ely, it can use an

intermediary located in t e foreign mar.et-an approac termed direct e porting"

Indirect Exporting: Indirect e porting includes dealing t roug e port

management companies of foreign agents, merc ants or distri*utors" Se+eral types of

intermediaries located in t e domestic mar.et are ready to assist a manufacturer in

contacting international mar.ets or *uyers" ) e ma?or ad+antage for managers using a

domestic intermediary lies in t at indi+idual@s .no/ledge of foreign mar.et conditions"Particularly, for companies /it little or no e perience in e porting, t e use of a domestic

intermediary pro+ides t e e porter /it readily a+aila*le e pertise" ) e most common

types of intermediaries are *ro.ers, com*ination e port and manufacturers@ e port

agents" 9roup selling acti+ities can also elp indi+idual manufacturers in t eir e port

operations"

Direct Exporting: !irect e porting includes setting up an e port department

/it in t e firm or a+ing t e firm@s sales force sell directly to foreign customers or

mar.eting intermediaries" # company engages in direct e porting / en it e ports

t roug intermediaries located in t e foreign mar.ets" %nder direct e porting, an e porter

must deal /it a large num*er of foreign contacts, possi*ly one or more for eac country

t e company plans to enter" #lt oug a direct e porting operation re uires a larger

degree of e pertise, t is met od of mar.et entry does pro+ide t e company /it a greater

degree of control o+er its distri*ution c annels t an /ould indirect e porting" ) e

e porter may select from t/o ma?or types of intermediaries: agents and merc ants" #lso,


9/29

t e e porting company may esta*lis its o/n sales su*sidiary as an alternati+e to

independent intermediaries" Successful direct e porting depends on t e +ia*ility of

relations ip *uilt up *et/een t e e porting firm and t e local distri*utor or importer" 5y

*uilding t e relations ip /ell, t e e porter sa+es considera*le in+estment costs"

) e independent distri*utor earns a margin on t e selling price of t e products"

#lt oug t e independent distri*utor does not represent a direct cost to t e e porter, t e

margin t e distri*utor earns represents an opportunity t at is lost to t e e porter" 5y

s/itc ing to a sales su*sidiary to carry out t e distri*utor@s tas.s, t e e porter can earn

t e same margin" ;it increasing +olume, t e incenti+e to start a sales su*sidiary gro/s"

n t e ot er and, if t e anticipated sales +olume is small, t e independent distri*utor

/ill *e more efficient since sales are c anneled t roug a distri*utor / o is maintaining

t e necessary staff for se+eral product lines" ) e lac. of control fre uently causes

e porters to s ift from an independent distri*utor to / olly o/ned sales su*sidiaries"

Many companies e port directly to t eir o/n sales su*sidiaries a*road,

sidestepping independent intermediaries" ) e sales su*sidiary assumes t e role of t e

independent distri*utor *y stoc.ing t e company0s products and4or ser+ices, sometimes

?ointly ad+ertising and promoting t e products, selling to *uyers and assuming t e credit

ris." ) e sales su*sidiary offers t e manufacturer full control of selling operations in a

foreign mar.et" Suc control may *e important if t e company@s products re uire t e use

of special mar.eting s.ills suc as ad+ertising or selling" ) e e porter finds it possi*le to

transfer or e port not only t e product *ut also t e entire mar.eting program t at oftenma.es t e product a success" ) e operation of a su*sidiary adds a ne/ dimension to a

company@s international mar.eting operation" It re uires t e commitment of capital in a

foreign country, primarily for t e financing of account recei+a*les and in+entory" #lso,

t e operation of a sales su*sidiary entails a num*er of general administrati+e e penses

t at are essentially fi ed in nature" #s a result, a commitment to a sales su*sidiary s ould

not *e made /it out careful e+aluation of all t e costs in+ol+ed"

Fo$ei2n P$od&c#ion 5 n En#$y S#$ #e2y(

Many companies reali e t at to open a ne/ mar.et and ser+e local customers

*etter, e porting into t at mar.et is not a sufficiently strong commitment to reali e strong

local presence" #s a result, t ese companies loo. for /ays to strengt en t eir *ase *y

entering into one of se+eral /ays to manufacture"


10/29

Licensing: Aicensing is similar to contract manufacturing, as t e foreign licensee

recei+es specifications for producing products locally, *ut t e licensor generally recei+es

a set fee or royalty rat er t an finis ed products" Aicensing may offer t e foreign firm

access to *rands, trademar.s, trade secrets or patents associated /it products

manufactured" %nder licensing, a company assigns t e rig t to a patent 6/ ic protects a

product, tec nology or process7 or a trademar. 6/ ic protects a product name7 to

anot er company for a fee or royalty" %sing licensing as a met od of mar.et entry, a

company can gain mar.et presence /it out an e uity 6capital7 in+estment" ) e foreign

company, or licensee gains t e rig t to commercially e ploit t e patent or trademar. on

eit er an e clusi+e 6t e e clusi+e rig t to a certain geograp ic region7 or an unrestricted

*asis" !ue to ad+antages of lo/ ris. and lo/ in+estment, licensing is a particularly

attracti+e mode for small and medium-si ed firms" Aicensing also is an effecti+e mode

for testing t e future +ia*ility of more acti+e in+ol+ement /it a foreign partner"

Aicenses are signed for a +ariety of time periods" !epending on t e in+estment

needed to enter t e mar.et, t e foreign licensee may insist on a longer licensing period to

pay off t e initial in+estment" )ypically, t e licensee /ill ma.e all necessary capital

in+estments 6mac inery, in+entory and so fort 7 and mar.et t e products in t e assigned

sales territories, / ic may consist of one or se+eral countries" Aicensing agreements are

su*?ect to negotiation and tend to +ary considera*ly from company to company and from

industry to industry" $ompanies use licensing for a num*er of reasons" or one, acompany may not a+e t e .no/ledge or t e time to engage more acti+ely in

international mar.eting" ) e mar.et potential of t e target country may also *e too small

to support a manufacturing operation" # licensee as t e ad+antage of adding t e licensed

product@s +olume to an ongoing operation t ere*y reducing t e need for a large

in+estment in ne/ fi ed assets" # company /it limited resources can gain ad+antage *y

a+ing a foreign partner mar.et its products *y signing a licensing contract" Aicensing not

only sa+es capital *ecause no additional in+estment is necessary *ut also allo/s scarce

managerial resources to *e concentrated on more lucrati+e mar.ets" #lso, some smaller

companies /it a product in ig demand may not *e a*le to satisfy demand unless

licenses are granted to ot er companies /it sufficient manufacturing capacity"

In some countries / ere t e political or economic situation appears uncertain, a

licensing agreement /ill a+oid t e potential ris. associated /it in+estments in fi ed

facilities" Representing an e port of tec nology rat er t an goods 6as in e porting7 or

capital, licensing is an attracti+e mode in mar.ets / ere political and economic

uncertainties ma.e a greater in+ol+ement ris.y" 5ot commercial and political ris.s are


11/29

a*sor*ed *y t e licensee" In ot er countries go+ernments fa+or t e granting of licenses to

independent local manufacturers as a means of *uilding up an independent local industry"

In suc cases, a foreign manufacturer may prefer to team up /it capa*le licensee despite

a large mar.et si e, *ecause ot er forms of entry may not *e possi*le"

# ma?or disad+antage of licensing is t e company@s su*stantial dependence on t e

local licensee to produce re+enues and t us royalties usually paid as a percentage on sale

+olume only" nce a license is granted, royalties are paid only if t e licensee is capa*le

of performing an effecti+e mar.eting ?o*" Since t e local company@s mar.eting s.ills

may *e less de+eloped, re+enues from licensing may suffer accordingly" #not er

disad+antage is t e resulting uncertainty of product uality" # foreign company@s image

may suffer if a local licensee mar.ets a product of su*standard uality" Ensuring a

uniform uality re uires additional resources from t e licenser t at may reduce t e

profita*ility of t e licensing acti+ity" ) us, t e producer loses some control in certain

situations" ) e ris. of losing control of intellectual property and4or tec nological

ad+antages can also *e mentioned as anot er disad+antage of licensing"

#not er potential pro*lem is t at t e licensee may adapt t e licensed product and

compete ead on /it t e licensor" ) e possi*ility of nurturing a potential competitor is

+ie/ed *y many companies as a disad+antage of licensing" ;it licenses usually limited

to a specific time period, a company as to guard against t e situation in / ic t e

licensee /ill use t e same tec nology independently after t e license as e pired and

t erefore turn into a competitor" #lt oug t ere is a great +ariation according to industry,licensing fees in general are su*stantially lo/er t an t e profits t at can *e made *y

e porting or local manufacturing" !epending on t e product, licensing fees may range

any/ ere *et/een 1 percent and 2' percent of sales, /it 3 to B percent *eing more

typical for industrial products" $onceptually, licensing s ould *e pursued as an entry

strategy if t e amount of t e licensing fees e ceeds t e incremental re+enues of any ot er

entry strategy suc as e porting or local manufacturing" # t oroug in+estigation of t e

mar.et potential is re uired to estimate potential re+enues from any one of t e entry

strategies under consideration"

Franchising: ranc ising is a special form of licensing in / ic t e franc iser

ma.es a total mar.eting program a+aila*le including t e *rand name, logo, products and

met od of operation" %sually t e franc ise agreement is more compre ensi+e t an a

regular licensing agreement in as muc as t e total operation of t e franc isee is

prescri*ed" It differs from licensing principally in t e dept and scope of uality controls

placed on all p ases of t e franc isee@s operation" ) e franc ise concept is e panding


12/29

rapidly *eyond its traditional *usinesses 6suc as ser+ice stations, restaurants and real-

estate *ro.ers7 to include less traditional formats suc as tra+el agencies, used car

dealers, t e +ideo industry and professional and ealt impro+ement ser+ices" #*out C'

percent of all Mc!onald@s restaurants are franc ised and as of 1DDD t e firm operated

a*out 2(,B'' stores in 11 countries"

Local Manufacturing: # common and /idely practiced form of mar.et entry is

t e local manufacturing of a company@s products" Many companies find it to t eir

ad+antage to manufacture locally instead of supplying t e particular mar.et /it products

made else/ ere" >umerous factors suc as local costs, mar.et si e, tariffs, la/s and

political considerations may affect a c oice to manufacture locally" ) e actual type of

local production depends on t e arrangements made it may *e contract manufacturing,

assem*ly or fully integrated production" Since local production represents a greater

commitment to a mar.et t an ot er entry strategies, it deser+es considera*le attention

*efore a final decision is made"

%nder contract manufacturing, a company arranges to a+e its products

manufactured *y an independent local company on a contractual *asis" ) is is an entry

mode in / ic a firm contracts /it a foreign firm to manufacture parts or finis ed

products or to assem*le parts into finis ed products" ) e manufacturer@s responsi*ility is

restricted to production" #fter/ard, products are turned o+er to t e international company

/ ic usually assumes t e mar.eting responsi*ilities for sales, promotion anddistri*ution" In a /ay, t e international company rents t e production capacity of t e

local firm to a+oid esta*lis ing its o/n plant or to circum+ent *arriers set up to pre+ent

t e import of its products" $ontract manufacturing differs from licensing /it respect to

t e legal relations ip of t e firms in+ol+ed" ) e local producer manufactures *ased on

orders from t e international firm *ut t e international firm gi+es +irtually no

commitment *eyond t e placement of orders" )ypically, t e contracting firm supplies

complete product specifications to t e foreign firm, sets production +olume and

guarantees purc ase" Ao/er la*or costs a*road are t e ma?or incenti+e for using t is entry

mode" )ypically, contract manufacturing is c osen for countries /it a lo/-+olume

mar.et potential com*ined /it ig tariff protection" In suc situations, local production

appears ad+antageous to a+oid t e ig tariffs, *ut t e local mar.et does not support t e

+olume necessary to ?ustify t e *uilding of a single plant" ) ese conditions tend to e ist

in t e smaller countries in $entral #merica, #frica and #sia" f course, / et er an

international company a+ails itself of t is met od of entry also depends on its products"

%sually, contract manufacturing is employed / ere t e production tec nology in+ol+ed


13/29

is /idely a+aila*le and / ere t e mar.eting effort is of crucial importance in t e success

of t e product"

5y mo+ing to an assem*ly operation, t e international firm locates a portion of

t e manufacturing process in t e foreign country" )ypically, assem*ly consists only of

t e last stages of manufacturing and depends on t e ready supply of components or

manufactured parts to *e s ipped in from anot er country" #ssem*ly usually in+ol+es

ea+y use of la*or rat er t an e tensi+e in+estment in capital outlays or e uipment"

Motor +e icle manufacturers and electronics industries a+e made e tensi+e use of

assem*ly operations in numerous countries"

ften, companies /ant to ta.e ad+antage of lo/er /age costs *y s ifting t e la*or

intensi+e operation to t e foreign mar.et t is results in a lo/er final price of t e

products" In many cases, o/e+er, t e local go+ernment forces t e setting up of assem*ly

operations eit er *y *anning t e import of fully assem*led products or *y c arging

e cessi+e tariffs on imports" #s a defensi+e mo+e, foreign companies *egin assem*ly

operations to protect t eir mar.ets"

=o/e+er, successful assem*ly operations re uire dependa*le access to imported

parts" ) is is often not guaranteed and in countries /it c ronic foreign e c ange

pro*lems, supply interruptions can occur" )o esta*lis a fully integrated local production

unit represents t e greatest commitment a company can ma.e for a foreign mar.et" Since

*uilding a plant in+ol+es a su*stantial outlay in capital, companies only do so / ere

demand appears assured" International companies may a+e any num*er of reasons foresta*lis ing factories in foreign countries" ften, t e primary reason is to ta.e ad+antage

of lo/er costs in a country, t us pro+iding a *etter *asis for competing /it local firms or

ot er foreign companies already present" #lso, ig transportation costs and tariffs may

ma.e imported goods uncompetiti+e" Some companies /ant to *uild a plant to gain ne/

*usiness and customers" Suc an aggressi+e strategy is *ased on t e fact t at local

production represents a strong commitment and is often t e only /ay to con+ince clients

to s/itc suppliers"

Aocal production is of particular importance in industrial mar.ets / ere ser+ice

and relia*ility of supply are main factors in t e c oice of product or supplier" Many

times, companies esta*lis production a*road not to enter ne/ mar.ets *ut to protect

/ at t ey a+e already gained t roug e porting" $ anging economic or political factors

may ma.e suc a mo+e necessary" ) e Fapanese car manufacturers, / o ad *een su*?ect

to an import limitation of assem*led cars imported from Fapan, *egan to *uild factories in

%nited States in t e 1DC's to protect t eir mar.et s are" #s mentioned a*o+e, Fapanese

manufacturers@ reasons for t e local production /ere partly political as t e %nited States


14/29

imposed import targets for se+eral years" #lso, /it t e +alue of t e yen increasing to one

undred yen per %S dollar, e ports from Fapan *ecame uneconomical compared /it

local production" ) us, to defend mar.et positions, Fapanese car companies instituted a

longer-term strategy of ma.ing cars in t e region / ere t ey are sold" Mo+ing /it an

esta*lis ed customer can also *e a reason for setting up plants a*road" In many industries,

important suppliers /ant to .eep a relations ip *y esta*lis ing plants near customer

locations / en customers *uild ne/ plants else/ ere, suppliers mo+e too" #not er

reason can also *e s ifting production a*road to sa+e costs"

CHAPTER II

6*0 G!o3 ! 5 !e5 5#$ #e2ie5 8 p! nnin2 nd ! &nc'in2


15/29

9oing glo*al - t is is a term t at /as nearly un eard of a fe/ decades ago" )oday,

you can meet t/o am*itious entrepreneurial college students, de+eloping *usiness plans

t at a+e yet to *e e ecuted, and t ey are already tal.ing a*out going glo*al"

# common *elief underlying today8s *usiness society is t at, in order to *e

successful in t e long term, you a+e to a+e a glo*al strategy" ) e fact is t at it ta.es a

tremendous amount of coordination, effort, and sa++y to launc a glo*al sales strategy"

>ot to mention / at it ta.es to e ecute a glo*al strategy"

) ere are, o/e+er, a num*er of proacti+e measures and steps t at early-stage,

entrepreneurial companies s ould consider if a .ey part of t eir strategy and future

success is tied to entering t e glo*al mar.ets"

5efore e+er considering a glo*al sales strategy, ensure t at you can *e successful in a

similar mar.et t at is, in all li.eli ood, muc easier to penetrate t an a glo*al mar.et"

;e8+e seen countless companies t at tried to Ggo glo*alH prior to e ecuting in t eir o/n

*ac.yards" >ot only is t is strategy ris.y, it can *e fatal to an emerging company t at as

significant capital needs and limited resources"

If you a+e successfully e ecuted on your core sales competency domestically,

ensure t at you a+e t e appropriate e perience to e plore a glo*al mar.et" eep in

mind, almost e+ery glo*al mar.et is different in terms of culture, *usiness acumen,

language and e pectations of t e sta.e olders" It is a*solutely critical to identify and iree perienced indi+iduals / o a+e a istory of *eing successful in glo*al mar.ets"

It /ill typically ta.e longer to penetrate a glo*al mar.et and attain results t at are

satisfactory t an it does in local and domestic mar.ets" ften times, a company /ill need

to de+elop a ne/ set of measurement metrics related to glo*al initiati+es as /ell as

compensation strategies" 9i+en t e significant cultural differences *et/een t e %"S" and

ot er countries, it is +ery easy to under estimate t e impact of +arious degrees of success

/it in a glo*al mar.et" )a.e sufficient time to ensure t at t e measurement metrics you

put in place ma.e sense in lig t of a ne/, untapped mar.et"

#d+ances in tec nology o+er t e last decade a+e clearly made doing *usiness

glo*ally easier and more efficient" >o dou*t, t e ne t 1' years /ill result in e+en more

inno+ations t at /ill allo/ domestic companies to operate glo*ally /it e+en furt er

limited resources on t e ground o+erseas" ;or.ing closely /it your information

tec nology team and coordinating t ese efforts /it glo*al representati+es and customers


16/29

is a tremendous ad+antage to going glo*al t at companies did not a+e 1' years ago"

Ma.e sure you ta.e ad+antage of t is"

#s /e all .no/, not e+ery *usiness endea+or is a success" E panding glo*ally as

e+en lo/er odds of success and, as a result, a company needs to define clearly / at

success /ill *e" If t at measure is not ac ie+ed, you a+e to .no/ / en to cut *ac. and,

potentially, e it t e glo*al mar.ets" Many successful domestic companies a+e *een

fore+er damaged *y /aiting too long to e it a failing glo*al strategy"

nce your company as successfully entered a glo*al mar.et, ensure t at you are

financially and resource-ready to enter additional mar.ets" ) e learning cur+e of

operating glo*ally is uge and companies /ill a+e significant opportunities to le+erage

success" 5e cautious as you loo. at ot er mar.ets, and understand t at no t/o glo*al

*usiness communities are t e same" Eac /ill ta.e different s.ill sets and e pertise"

) e glo*al *usiness en+ironment is an e citing one" Many glo*al mar.ets outside t e

%"S" are gro/ing significantly faster t an our mar.et" or e ample, /e8re seeing a

num*er of ig -potential companies t at are considering glo*al strategies in uic.ly

emerging countries suc as $ ina" >o dou*t, t e truly successful companies of today, and

especially tomorro/, /ill a+e to e pertly e ecute a glo*al strategy" ) e J1 million

uestion today is / et er you /ill a+e t e discipline and e pertise to ta.e ad+antage of

t is opportunity" Aet8s ope so"

6*6 S#$ #e2ic 5 !e5 p! n 8 4ey co%ponen#5

Yo& ' :e #o ' :e 2ood 5#$ #e2ic 5 !e5 p! n #o 2e# ny;'e$e* Success in sales

management starts /it planning" ) ere is a need to de+elop a plan t at pro+ides your

sales team /it t e strategy and tactics to lead t em to success" ) ere are fi+e .ey

components to de+eloping a successful sales plan"

I* De1ine #'e ide ! c&5#o%e$5*

) e first step, in a sales plan, is to formulate a strategy for ac uiring ne/ clients

and maintaining your e isting ones" ; at does your ideal client loo. li.eK ) e *est /ay

to determine t is is to loo. at your current clients and study t em" ; o are your ig

margin clientsK ; at industry are t ey inK If t e ma?ority is in t e same type of *usiness,

may*e you s ould target t at industry" =o/ /as t e lead de+elopedK ; at /as t e sales

cycleK =o/ did t ey payK #ns/ering t ese uestions can elp to find your ideal


17/29


18/29

importantly, / y customers /ould *e *etter ser+ed *y t eir company t an t e

competition"

V* S !e5 E=pec# #ion5*

Most of t is information s ould *e in your *usiness plan" If not, you s ould

de+elop a forecast of your sales and e penses *y mont , uarter and year" !o t is for

your entire team and eac of your territories" Include in t is forecast sales eadcount,

units sold, re+enue and anticipated margin" It8s important to remem*er t at sales

e pectations, ?ust li.e t e rest of your strategic sales plan, is a dynamic document you8ll

constantly re+isit and ad?ust as you go for/ard" ; en you prepare your sales

e pectations, *e realistic" !on8t ma.e t e sales targets unreac a*le, *ut don8t ma.e t em

so lo/ t at / en you reac t e target, you find you8re out of *usiness"

) e sales plan and your sales strategy is an e ceedingly important document t at

deser+es lots of time and energy to de+elop" It s ould *e ad?usted as your company

e+ol+es, ne/ products or ser+ices are introduced or t e mar.et c anges" ) e .ey is to get

input from all t e sta.e olders, including your customers, .ey employees from +arious

departments in your organi ation, mar.et data and your salespeople"

So, to de+elop your strategic sales plan, ma.e sure to: 17 !efine your ideal

customer, 27 !e+elop your %SP, 37 #naly e your territory design, (7 no/ your

competition, and B7 =a+e solid sales e pectations"

6*+C 5e 5#&dy

El.ay Manufacturing $ompany, founded in 1D2', is an international designer,

mar.eter, producer, and distri*utor of sin.s, faucets, pressuri ed /ater coolers, and

.itc en ca*inets" ) ese products are sold t roug plum*ing / olesalers, mass mer-

c ants, and ard/are stores" El.ay, / ic is pri+ately eld, employs a*out (,'''

people /orld/ide and is ead uartered in $ icago, Illinois" ) is presentation focuses

on t e El.ay !i+ision, / ic supplies sin.s, faucets, and coolers from si domestic

and t/o international locations" El.ay8s /ide range of products is suita*le for e+ery

application from t e top-line gourmet .itc en to t e /ee.end do-it-yourself

remodeler"

El.ay8s manufacturing strategy is largely ma.e-to-stoc., *ut as a considera*le

amount of ma.e-to-order GspecialsH on a daily *asis" Principles of FI) and lean

manufacturing implemented o+er t e past fi+e years a+e resulted in factory flo/

lines for final assem*ly, / ic are supplied /it fa*ricated components *y feeder

departments" #ll facilities are /or.ing on implementing point-of-use storage, +isual


19/29

.an*an pull systems, +arious uality initiati+es, setup reduction, and rate-*ased due-

date-dri+en production planning" ) e o*?ecti+e is to sync roni e daily production to

customer demand as muc as possi*le, / ile maintaining lo/ cost and ig deli+ery

performance"

) e primary performance measures are safety, uality, cost, deli+ery, and

in+entory" Eac of t ese as supporting performance measures t at address specific

operating o*?ecti+es" ) ese are reported *y t e plants daily, and re+ie/ed /it t e

+ice president of operations /ee.ly"

In 2''', El.ay Manufacturing recogni ed a need to furt er impro+e competiti+e

performance in terms of on-time deli+ery, fill rate, cycle time, and in+entory turns"

#n ena*ling o*?ecti+e /as to lin. top management planning to t e day-to-day

production line capacity and priority, and to purc ase material" ) e management

team deter-mined t at sales and operations planning /as a .ey strategy in ac ie+ing

t ese o*?ecti+es *y *alancing demand and supply on a regular *asis t roug t is ig -

performance top management communication process" ) e +ision /as t at S< P

/ould pro+ide a Gone-plan processH for sync roni ing sales, finance, manufacturing,

materials, uman resources, and engineering" It also /ould pro+ide t e foundation

arc itecture for using ERP to dri+e seamless planning t roug t e organi ation"

) e presentation descri*es / y S< P /as implemented, o/ it /or.s, and o/

t ey did it" In t e presentation, specific formats, reports, and related information /ill

*e presented t at are not pu*lis ed in t is paper"Sales and operations planning 6S< P7 is a pro+en top management met od for

ma.ing timely proacti+e resourcing decisions for la*or, fi ed cost, capital, .ey

materials, and core *ased on demand and supply *alancing" Many manufacturers a+e

disco+ered t e po/er of t is practice and are successfully applying it to lo/er cost,

pro+ide t e *est ser+ice, and minimi e in+estment"

S< P is a mont ly formal *alancing of sup-ply and demand t roug a -to-12-

mont planning ori on *y aggregate product families" It generally includes incoming

orders, *ac.log, s ipment, finis ed goods in+entory, production, and capacity

pro?ections in mont ly time *uc.ets" It is con-ducted in a muc prescri*ed format *y

t e top management team" ) is is a critical point: top management" #ny company

t at em*races t is process must engage t e president and direct reports" t er/ise,

t ere /ill *e a disconnect *et/een t eir /is es and t e information on t e formal

S< P document"

) e ma?or o*?ecti+e of S< P is to pro+ide a Gone-plan processH t at connects all

functional areas of t e *usiness from top management to t e s op floor on a regular


20/29

*asis" In its a*sence, eac functional area is li.ely to a+e plans t at are disconnected

at *est, and in a*solute conflict at /orst" It is t is o*?ecti+e t at ma.es S< P t e tool

t at connects top management planning seamlessly /it day-to-day factory

e ecution" ) is is a uge *enefit ;it out t is connecti+ity, t e factory /ill often run

to a set of assumptions t at are e tremely disconnected from t e top management

team" Purc asing /ill commit money and manufacturing /ill position people and

e uipment in a /ay t at can easily *e /ay out of sync /it demand, in+entory, and

*ac.log o*?ecti+es"

Acco&n#5 Gene$ !Recei: 3!e Sales, Production, & Led2e$

Finished GoodsInventory Planning

DistributionSales Order & InventoryInformation Information

Order Promis-ing and Material Man-

Scheduling agementProduct and

Manufacturing ngineeringInformation Information

Sho! Floor Su!!lier "alue-#dd Partnershi!

$ecution $ecution

Acco&n#5Co5#in2 Repo$#5 P y 3!e

Fi2&$e 6*+*0 8 E=p nded S>OP 3&5ine55 %ode!

In a recent meeting, t e +ice president of sales /as eard saying, G;e couldn8t a+e

done t ese t/o years ago"H ) is comment /as in reference to a +ery focused discussion

in t e S< P meeting regarding o/ to *est plan production and in+entory to satisfy

increasing demand o+er t e ne t fe/ periods" In late 2''', El.ay reali ed t at in order to

lo/er t e cost of production / ile impro+ing customer ser+ice, t e formal *alance of

supply and demand ad to *e addressed"

#t t at time, sales produced a forecast t at /as used in a +ariety of disconnected

/ays *y t e +arious manufacturing groups" inis ed goods in+entory /as a result of t e

disconnect, not strategically planned" ) e Gdemand sidersH and t e Gsupply-sidersH did

not a+e a meaningful4formal G and-s a.eH and agreement on t e sales, production, and

in+entory plan" It /as t e recognition of t is fundamental need t at dro+e El.ay to use


21/29

S< P as t e G*est practiceH to *alance supply and demand"

5ut t ere /as more" In addition to t is traditional definition of S< P, El.ay c ose to

e pand t e *oundaries to include a systemic lin. to de-tailed sc eduling and material

planning, and t en drill it rig t do/n to s op floor e ecution and purc asing" Fi2&$e

6*+*0s o/s t e e panded S< P *usiness model used *y El.ay"

)raditional S< P is in t e top middle *o " ) is is / ere t e top management

demand and supply *alance ta.es place" ) e ne t t/o *o es, order promising and

sc eduling, and material management, include all of t e detailed planning deri+ed from

t e top-le+el S< P" ) e *ottom t/o *o es, s op floor and supplier e ecution, carry out

t e planning acti+ity +ia system dri+en sc edules and +arious +isual .an*an tec ni ues"

) is e panded S< P model ensures t at t e El.ay planning process is lin.ed

seamlessly from top management to day -to-day operations e ecution" ) is approac and

scope is relati+ely uni ue for t e entire su*?ect of S< P, and /ill continue to e pand t e

process *enefit"

perationally, 2'13 /as an outstanding year for t e El.ay !i+ision" ) e results

s o/n *elo/ are due largely to t e S< P process 6as /ell as ot er initiati+es7, / ic

allo/ed t e management team to ma.e fact-*ased decision uic.ly and regularly as a

unified organi ation"

Pe$1o$% nce

Me 5&$e C' n2e 1$o% 6?06 #o 6?0+

)otal in+entory

dollars 32N reduction

)otal in+entory

turns 3BN increase

n-time s ipments 2BN impro+ement to D1N


22/29

5ac.orders 3BN reduction

$ycle time (CN reduction to O"O days

T 3!e 6*+*0 8 Pe$1o$% nce %e 5&$e

) e si steps descri*ed in t e follo/ing paragrap s summari e t e El.ay S< P

process" ) ese are a com*ination of recogni ed S< P *est practices tailored to suit

El.ay8s operating c aracteristics: position, c anging t e num*er of production days *y

production line, and c anging t e split *et/een plants" nce t e S< P coordinator as

done t is preliminary analysis, t e pre-S< P meeting can *e eld" Step 3 is

accomplis ed *et/een riday and Monday"


23/29

S#ep 0( Co!!ec# #'e Pe$iod End Ac#& !

) e accounting calendar is *ased on four-/ee. and fi+e-/ee. periods 6not

mont s7 in a ( -(-B uarterly rotation" ) e period al/ays ends on ri-day, / ic

allo/s a consistent calendar in terms of t e S< P process steps" Period actual are re-

ported from t e *usiness system at C:'' a"m" on t e Monday follo/ing t e end of t e period" 5y plant and *usiness total, t ese include s ipments in units and dollars *y

product family, finis ed goods in+entory in units and cost *y product family, and

production in units and ours *y producing line" It is important to capture in+entory at

a specific point in time since it is a constantly c anging num*er" ) e S< P

coordinator captures t ese actual"

S#ep 6( Upd #e #'e S !e5 Fo$ec 5#

) e mar.eting manager collects input from t e internal sales organi ation,

outside reps, mar.eting data sources, and ot er El.ay people during t e first fe/ days

of t e period" 5ased on all of t e mar.et intelligence, re+isions to t e forecast are

made in units and dollars *y sales *usiness unit, commodity, and product family"

) ere are four sales *usiness units 6El.ay, =alsey )aylor, Re+ere, and International7,

t ree commodities 6sin.s, fountains4coolers, and faucets7, and product families"

) e sales manager /it in eac *usiness unit is accounta*ility for t e sales forecast,

and t e El.ay mar.eting manager is accounta*le for aggregating t e data" ) is step is

accomplis ed *y t e fourt day of t e period"

S#ep +( Pe$1o$% P$e!i%in $y - ! ncin2 o1 De% nd nd S&pp!y*

) e S< P coordinator recei+es t e updated fore-cast from t e mar.eting

manager, and *egins de+eloping t e production plan using finis ed goods in+entory

as t e decouple" ) ere are fi+e primary finis ed goods in+entory locations, and t e

supply c ain manager specifies stoc. items and in+entory positions *y location" ) e

S< P coordinator t en specifies t e production rates *y family to accomplis t ese

in+entory positions" >e t, a capacity plan is created in terms of earned ours *y

production line across all plants as a function of t e production rates *y family" ) e

o*?ecti+e is to le+el or ramp t e lines / ile maintaining t e finis ed goods in+entory

position" ) is is an iterati+e process t at includes altering t e in+entory"

S#ep5 @( Cond&c# P$e,S>OP ;i#' #'e P! n# M n 2e$5*

>o/ is / en t e fun starts" ) e S< P $oordinator sc edules a one- our

meeting /it eac plant manager to re+ie/ t e preliminary supply and demand

*alance" ) e di+ision supply c ain manager, t e plant materials manager, t e plant


24/29

production manager, and ot ers may attend t is meeting" ) e o*?ecti+e is to re+ie/

t e line run rates and finis ed goods in+entory position relati+e to t e sales forecast"

%sually, t ere is a considera*le amount of discussion around s ort-term capacity

issues" #d?ustments are made until all are in agreement, is-sues for t e S< P meeting

are identified, and decisions are noted" #t times, t e capacity plan /ill *e completely

rerun, a process t at ta.es a*out 3' minutes" Step ( is done on )uesday, t e se+entday of t e period"

S#ep /( Cond&c# #'e S>OP Mee#in2*

) e meeting is eld mont ly on t e second ) ursday, and lasts a*out t/o ours"

) e P of operations, P of sales, P of finance, plant man-agers, mar.eting

managers, supply c ain manager, t e S< P coordinator and ot er people as needed

attend it" #ttendance is nearly perfectQt e date is on t e calendar for t e year and

doesn8t c ange ) is ensures participation"

) e agenda is roug ly 2B percent re+ie/ing past period8s actual performance to

plan in terms of sales in units and dollars *y product commodity, finis ed goods

in+entory in units and dollars *y product commodity *y plant, and production in

earned ours *y production line *y plant" Key metrics *y plant are also re+ie/ed to

s o/ impro+ement trends in terms of order fill rate, cycle time, in+entory turns, and

deli+ery performance" Eac person / o is accounta*le for performance spea.s to is

or er num*ersQt is is critically important for t e process to succeed"

) e ot er OB percent of t e agenda is re+ie/ing t e outloo. for t e ne t se+eral

periods" Sales pro?ections, finis ed goods in+entory le+els, and production line rates

are discussed" #ny issues needing attention are noted and action items assigned"

) ese actions are re+ie/ed at t e ne t meeting" 9enerally, t ere is uite a *it of

discussion, / ic ensures t at all t e players are on t e same page" ) e outloo.

concludes /it a summary of t e en-tire El.ay !i+ision and a re+ie/ of t e action"

S#ep 9( Di5#$i3e #'e In1o$% #ion nd D$i!! I# Do;n T'$o&2' #'e P! nnin2

P$oce55*

#fter t e S< P meeting, t e total document is electronically distri*uted to t e

meeting attendees" It is t eir ?o* to distri*ute t e information appropriately" Part of

t is distri*ution is a Gdrill do/nH to t e sc edulers and t e line super+isors" or

e ample, at t e El.ay !i+ision, eac production line as a / ite *oard t at s o/s t e

num*er of units and earned ours to *e accomplis ed eac day" ) ese num*ers are

ta.en directly from t e S< P document" #s t e period progresses, actual +s" plan

performance is measured daily"

In >o+em*er 2'12, El.ay top management decided to mo+e for/ard /it a


25/29

formal S< P process" ) e pro?ect /as endorsed *y t e company president and co-

c ampioned *y t e +ice president of operations and t e +ice president of sales" rom

.ic.off to t e first meeting /as a*out t ree mont s" #not er four mont s /as

re uired to mature t e process" Implementation steps t at a+e *een ta.en as of t is

/riting 6May 2'1(7 are as follo/s:

1" ) e pro?ect c ampions 6 P operations and P sales7 eld a .ic.off meeting /it

senior management to re+ie/ t e pro?ect o*?ecti+es, deli+era*les, and

met odology" 6>o+em*er 2'127

2" ) e S< P coordinator position /as defined and filled" 6!ecem*er 2'127

3" ) e pro?ect team /as formed including, plant manager 6co-c air7, mar.eting

manager 6co-c air7, S< P coordinator, MIS, supply c ain manager, production

manager, and )$# consultant" 6!ecem*er 2'127

(" # t/o-day S< P education session /as elp for t e c ampions, pro?ect team, and

2B ot er .ey operating managers" 6Fanuary 2'137

B" ) e detailed pro?ect plan /as de+eloped" 6Fanuary 2'137

" ) e first cut of t e S< P process /as de-signed including data sources for actual,

S< P formats, performance measures, calendar, and meeting agenda" 6Fanuary&

Marc 2'137

O" ) e first S< P meeting /as eld" 6Marc 2'137

C" S< P refinements and re+ision /ere made including data purification,

preparation, format impro+ement, and data assem*ly automation" 6#pril 2''1&

#ugust 2'137"

D" ) e process reac ed a le+el / ere it could effecti+ely *e used to manage t e

*usiness" 6#ugust 2'137

1'" ) e S< P process lin.age to detailed planning *egan, and continues to e+ol+e"

6Fuly 2'13&!ecem*er 2'1(7"

11" ) e process /as mo+ed from essentially a spreads eet application to a totally

ERP contained solution 6PeopleSoft7" 6>o+em*er 2'13&May 2'1(7

#s of t is /riting, t e effort to lin. S< P to t e sc eduling and materials

planning functions are /ell under/ay, *ut are not yet completed" ) e intent is to

sc edule production lines to t e daily run rates specified in t e S< P process, and to


26/29

procure materials to support t ese sc edules"

ne important *rea.t roug feature is to a+e a daily sc edule *y production line

t at comes directly from t e ERP system in a fit-for-use condition, and is used *y

super+isors on a daily *asis to run t e production lines" In t is /ay, S< P is lin.ed to

t e s op floor" ) e sc edule /ill *e e ecuted *y a com*ination of .an*an pull signals

and ta.e-action reports for stoc. items, and ta.e-action reports for direct non-stoc.customer demand"

Material planning +ia traditional MRP logic /ill *e lin.ed to t e output of S< P

+ia a planning 5 M met odology" #ctual replenis ment /ill *e triggered +ia MRP

ta.e-action reports, .an*an signals, and MI 6+endor managed in+entory7"

#ll of t ese actions /ill *e accomplis ed in 2'1("

Successfully implementing S< P in your company depends on a fe/, *ut +ery

important, principles"

1" )op management must *e on *oard and lead t e effort" ) is doesn8t mean t ey do

all t e /or." 5ut it does mean t at t ey 617 s o/ up at t e meetings / en t ey are

supposed to, 627 ma.e it clear in e+eryone8s mind t at t is is not an optional

acti+ity, 637 pro+ide t e re-sources to get it done 6S< P coordinator, MIS

support, S< P e perts7"

2" )op management and operating management must use t e S< P process to run

t e *usiness as a one-plan process" ) is is simple" ; en someone as.s, G; at are

t e pro?ected s ipments for ne t periodKH t e ans/er comes from t e S< P

document, not from anot er spreads eet" ; en someone as.s, G; at is t e daily

run rate for line (1'KH t e ans/er comes from t e S< P document, not from

anot er spreads eet" Lou get t e idea" ) e S< P document is a true statement of

/ at /e intend to do" If any ot er document is used, a multi-plan process e ists

/ ic usually renders S< P meaningless"

3" S o/ up" D' percent of success is s o/ing up" ) e rig t people must

accomplis t e specified process steps on time, and attend t e sc eduled

meetings /it out fail" It is unaccepta*le to send su*stitutes, *e late, or not at-

tend" Successful companies pu*lis an annual sc edule of S< P e+ents and

get it on e+ery player8s personal calendar" ) is /ay, e+eryone .no/s / at is

going on, / en it is going on, and / o is in+ol+ed" t er acti+ities can t en

*e sc eduled around S< P"

(" =a+e fla/less data presented in a fit-for-use condition" ) is applies especially


27/29

to t e actual from t e pre+ious period" ) ere is only one ans/er to G; at did

/e s ipKH >aturally, fore-casted sales, production, and in+entory /ill *e *est

estimates, *ut s ould *e understanda*le and formatted for easy use"

El.ay Manufacturing ad a need to impro+e competiti+e performance in terms of

on-time deli+ery, fill rate, cycle time, and in+entory turns" Sales and operations

planning /as a .ey strategy in ac ie+ing t ese o*?ecti+es *y *alancing demand and

supply on a regular *asis t roug t is ig -performance, top management

communication process" In addition, S< P *ecame t e foundation for using ERP to

dri+e seamless planning t roug t e organi ation" )raditional S< P /as

accomplis ed in se+en mont s, and e panded S< P is in process as of t is /riting"

) e pro?ect /as top management led and designed *y a middle management pro?ect

team" )o find out more, /e encourage you to con-tact one of t e aut ors"


28/29

REFERENCES1" 5ello, !"$" and =" $" 5ar.dale" E porting at Industrial )rade S o/s, Industrial

Mar.eting Management, Spring 1DC , 1DO-2' "

2" 5ertrand, " )al.ing )ur.ey on )rade S o/s, 5usiness Mar.eting, Marc 1DCO, D(-

1'3"

3" 5onoma, )" " 9etting More ut of Lour )rade S o/s, =ar+ard 5usiness Re+ie/, 1Fanuary- e*ruary 1DC3, OB-C3"

(" 5ro/ning, F" M" and R" F" #dams" )rade S o/s: #n Effecti+e Promotional )ool for t e

Small Industrial 5usiness, Fournal of Small 5usiness Management, cto*er 1DCC, 31-

3 "

B" ir.s, R" Pic. %p Lour Profits /it )rade S o/s, #gency Sales Maga ine, Fune 1DD',

2C-33"

" riedman, S" " Planning and no/ledge #re eys to Success at European )rade

S o/s, Mar.eting >e/s, Fuly D, 1DD', 1'"

O" =um*ert, R" P" )rade airs #re an E cellent ;ay to )a.e #d+antage of 9ro/ing

pportunities in ;estern Europe, 5usiness #merica, !ecem*er 21, 1DCO, 3-B"

C" erin, R" and ;" A" $ro/" #ssessing )rade S o/ unctions and Performance: #n

E ploratory Study, Fournal of Mar.eting, B1, Marc 1DCO, CO-D("

D" Aely/eld, M" S" European )rade S o/s #re #ll 5usiness, $ icago )ri*une, >o+em*er

1O, 1DCD, 21"

2C


29/29

1'" Mot/ani, F", 9" Rice and E" Ma moud" Promoting E ports ) roug International )rade

S o/s: # !ual Perspecti+e, Re+ie/ of 5usiness, Spring 1DD2, 3C-(2"

11" >orton, F" =" =o/ )o Ma.e oreign )rade S o/s Pay ff, ;orld )rade, ;inter 1DCD,

D2"

12" Smit , =" Special )raining for )rade S o/s, Sales and Mar.eting Management,

e*ruary 3, 1DC , O-CO"

13" )a.ing #d+antage of )rade airs for Ma imum Sales Impact, 5usiness International,

cto*er 12, 1DCO, 321-22"

1(" ;eiss, F" )rade airs !ra/ %"S" irms to t e E"$", Europe, Fune 1DCC, 21-23"

Project Planning Sales

Documents

Transcript of Project Planning Sales