Process Diagnostic & Design – Change How Operations can respond to Demand
Nearly all companies that grow rapidly (15-30% or more year over year) selling rapidly progressing technology products with annual revenue between $150 million and $3 billion1
experience the following in unique ways:
1 : Lower & Upper bounds of yearly revenue ($150M to $3B) based on Zyom’s direct work & primary research
2 : Excess & obsolete (E&O) inventory
- $ millions every quarter in lost or delayed revenue due to product shortages
- $ millions per year in unplanned inventory carrying costs, E & O2 costs
- $ hundreds of thousands or more per year in excessive expediting costs
- Poor visibility into Revenue. Poor predictability of gross margin
- Diminished response measured by cycle times, cost and effort required
Symptoms & Root causes – the Unavoidable & Avoidable Root causes
Some symptoms are an early indicator that Operations Responsiveness has been adversely impacted, such as:
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- Fire-fighting with executives in the mix
- cross-functional disconnects regarding business data
- Long cycle times accepted as a given
Many of the root causes stem from sub-optimal Planning, Decisions and Execution.
Even the best of technology product companies that can tackle the challenges of rapidly evolving technology stumble by making sub-optimal operations plans, and decisions which eventually impacts how they execute to their revenue plan.
Some root causes can be traced to status quo bias, but that’s just the tip of the iceberg.
While some root causes are unavoidable – such as, economic downturn, market acceptance of new products, lead time to qualify a new supplier, other root causes are avoidable – such as, sub-optimal Total Planning cycle time, stale available to ship picture, poor predictability and unplanned costs during Product launches and transitions.
If your company experiences the substantial financial and operational symptoms of sub-optimal planning, decisions, execution to plan and supporting systems consider utilizing Zyom’s ‘Process Diagnostic & Design’ service offering.
Zyom Diagnostic & Design Deliverables
Zyom offers the Process Diagnostic & Design to companies as a first step to understand the magnitude of their Operations responsiveness constraints, its impact on operational competitiveness metrics and to capture quick wins.
Following are a sub-set of deliverables based on your company’s needs:
"Zyom, as part of a broader project team effort, helped in designing a transition process to address our client's product transition challenges, particularly addressing excess & obsolete inventory costs. Zyom's root-cause analysis and systematic approach helped immensely in addressing the deep-rooted product transition issues to come up with an effective process, which is currently being implemented."
HONG MO YANG, VICE PRESIDENT, SAMSUNG SDS
- Identify capability gaps in the current End to End Planning & Execution Process
- Significant process constraints (current and projected for future); For example:
- How to make Sales & Operations Planning (S&OP) process more effective?
- What are the 3 key process areas critical to Demand Responsiveness? Why?
- Tailored Ops Dashboard & key metrics to monitor for responsiveness
- Post-mortem of past “events” utilizing detailed ‘map the gap’– Analysis of past to identify/ specify improvements in “end-to-end” process areas such as:
- Demand through Fulfillment – Why was channel inventory so high last x quarters?
- Product Launch & Transitions – Why excessive E&O?
- Process Linkages – Why did we miss this demand upside/ downside? (Sales Ops & Supply Chain Planning)?
Why is the lead-time so unpredictable? (Manufacturing/ Procurement & manufacturing partners -CMs/ODMs or in-house manufacturing)?
- Context – both Outsourced and in-house Manufacturing Management
- Design of a better Operations Planning & Execution Process with high priority gaps identified and plugged; 1 to 2 cycles of iterative rapid ‘prototype’ planning (infusing ‘Design for Action’ approach)
Your company will receive a customized framework and specific set of changes to improve processes that impact Planning & Execution across the Value Network from those that have supported and led ‘best of breed’ Operations & Technology teams (from Fortune 100 to dynamic startups that evolved into respected challengers).
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