ID: PGXPM152PRS
PGXPM
MANAGERIAL ACCOUNTING - (TAKE HOME EXAM) - Weightage 55%
ID: PGXPM152PRS
Q- 1: Write a report to strategically fix all these problems with clear execution and
implementation steps so that the organization is managed effectively and efficiently
for excellence and regains profitability and high morale.
You may also use all or most of the topics discussed and the 10 key takeaways.
Solution:
Cross-functional teams are teams that are not aligned on one functional level.
person is highly skilled in their own departments. This diversity and high skill of the
team is reason for both its effectiveness and as well as conflicts in the team.
The above two factors talks about competition and pricing from
competitors in the market. Lets see ways in which it could be tackled.
ID: PGXPM152PRS
Focus( Service)
Price: you can choose to beat the competition by offering the lowest prices
After a thorough study on the competitors. Identify the areas that your
products needs to be worked upon.
Another of winning the price war is not to indulge in any price war. When
the competitor slashes the price take the opposite route of providing
superior value and not reducing the price.
ID: PGXPM152PRS
No two products are the same just as how two customers are not alike,
hence the need for branding. Whats different about your product in
comparison to other businesses in your industry?
Product Innovations
People will not stick with products that has no zeal for innovations.
Innovation brings excitement to the marketplace and customers like
excitement. New innovations could be patented and this brings significant
edge over competitors
When you think of streamlining your business and increasing your profits,
the first step is to minimize overhead costs. One of the major reasons for
overhead costs in poor Inventory Management.
One of the major reasons that customers buy alternate products is Out
of Stock. Great products which are in high demand in market place lose
out because of poor inventory Management. These happen because of -
Poor Sales forecasting, lead time delays, Inaccurate Time
between Orders (TBO). Some of the corrective actions that could be
taken are
Real-time analytics
Real time data of demand, Supply and financial data gives us metrics
and information at a minute level of granularity through which rapid
scenario planning can be done to meet the customer requirements. Real
Name: PRAVEEN.S.J
ID: PGXPM152PRS
Proper slotting not only ensures much needed space, but appropriately
locates the fastest-moving items closer to docks and more accessible
locations, minimizing travel distance and maximizing overall throughput
and productivity. Also think of more supplier options in case of failover or
untoward calamities.
After identifying the primary aspects, the data belonging to these aspects
needs to be integrated into the ERP system. SAP is one powerful ERP tool
which major corporations adopt for effective SCM.
Just adopting ERP will not resolve the issue. Appropriate logging of data
against each of the primary aspects of SCM network
ID: PGXPM152PRS
The leader of the cross functional team should have insight to identify
Customers who are high profit contributors. This can be easily done using
80/20 profit distribution rule.
Analyzing the 80/20 principle we can find that the top 5% of the
customers generates close to 50% of the profits while the bottom 50% of
the customers generates only 5% of the total profit.
ID: PGXPM152PRS
accounts; Secondly identify those in the cash drainer group to either make
them profitable or yield them to the competition.
With the above insights and analysis a company can start to initiate
customer intimacy and loyalty programs to most profitable customers
After such programs reflect back on the results. One way of doing it is
Track the increased profit accrued to the product or company for each
additional customer who stays loyal to the company.
The internal factor such as sales forecast should be based on inputs received
from all the departments (like purchase, Orders, Servicing production, marketing
etc.) of the organization.
The external factor like sales forecast should be based on past pattern of sales
which include past experience combined with detailed past sales by product line,
geographic region, and type of customer.
When the sales forecast predicted wrongly, there are going to be multiple
overheads such as
Reduce the price of the product below the production resulting in less
profit or loss.
If the actual sales are greater than the forecasted sales the production capacity
needs to increase by putting more resources with higher prices. Additional
resources may lead to increase in final product cost
Name: PRAVEEN.S.J
ID: PGXPM152PRS
Rebalancing of the supply chain: Have more than one supplier to be able to
immediately switch to in the case of disruptions and maintain a flexible supply
base.
As a leader of the team should ensure the below guidelines are met
A master plan for the cross functional team needs to be charted and
floated across. This plan needs to be constantly revisited and progress
should be tracked against each of the items defined in the plan.
As a Cross functional team leader identify the limiting factors and mistakes
identified in Cost based Pricing are
ID: PGXPM152PRS
they would lose out on the profit for the value they provide for business
class.
Customers dont care about your costs, they care about the
product attributes they value- Customers who are willing to pay for the
product does not worry about cost incurred to produce the good rather the
value it gives the price.
Follow the below guidelines to reduce the support and indirect costs
Examples
Evaluate the demand which indicates the extent to which these support
services are needed.
ID: PGXPM152PRS
One functional team doesnt get incentivized like other functional units.
Does not share the larger goal or vision of the cross functional team
Q-2: Also extend these to your own company identifying and mapping
these issues with similar realistic issues in your organization. How will
you incorporate a forward looking visionary management to perform
better by at least 20 % in all aspects of operations and management and
profitability?
Name: PRAVEEN.S.J
ID: PGXPM152PRS
Off late there are lot of new players and local software product/services
company has come into the market providing lot of intense competition.
These new players come up with lot of differentiated services and attract
the core customers of our product towards them at much cheaper price.
We are trying to clearly define our brand because we feel our product is
definitely different from all the other competitive products or services in
the market.
ID: PGXPM152PRS
Product Innovations
We are coming up with new innovations and features that could be added
to the product and provide better value to the customers. These
innovations and features could be patented and creates a competitive
edge over our competitors.
We are trying to constantly communicate with our core customers and the
new customers to understand the pulse of the customer and record their
honest feedback and inputs to improve and stay updated in the market
2. Lack of integrated and coordinated planning and control
The Product has nearly 34 live clients and different customizations happening
across various clients and teams. Its a huge challenge to Integrate and plan in
a coordinated fashion.
Created a master plan for the cross functional teams and floated it
across. This plan needs to be constantly revisited and progress should
be tracked against each of the items defined in the plan.
Taken the below steps to reduce the costs incurred by these team
Drafted a clear SLA to track the efficiency and costs incurred by the
services provided by the team
Name: PRAVEEN.S.J
ID: PGXPM152PRS
Since there are lot of functional units which needs to work together to achieve
a larger common goal, there was lot of gaps and disconnect resulting in poor
senior management performance and attrition from the organization.
As a technical leader