SANDEEP KHEDKAR

CASE: I-MACH MACH COMPONENTS

Driving an integrated organizational strategy
I-Mach Mach Components (IMC) is a Rs. 1000 million organization that manufactures and sells motion control equipments and systems to a wide range of industries for an equally wide range of applications. In its space, IMC is one of the largest industrial machinery and components player in India. Over the years, it has built a distinct advantage over its rivals. Its product range and market reach has increased significantly over the last few years. IMC has also been a leading exporter of its products. But competition from both local and global players has been increasing consistently. Simultaneously, the supply chain operations have become more complex than before. Current business model IMC business operations are fairly more complex than their competitors. It has a fairly diverse div portfolio of some 400 plus offerings that are in the form of standard products, customized variant and integrated systems built to fit into larger machinery equipment. It manufactures these products in 5 different locations that are dedicated to certa certain in product lines. IMC stocks its standard offerings in its 7 regional warehouses that further supply a distributor base of 100 distributors spread across India. IMC caters to 3 different types of customers. The first set is that the various industrial systems syst and equipments OEMS which purchase standardized IMC products in high volumes but with lower margins. These OEMs also purchase custom made IMC products and integrated systems in smaller volumes, but with higher margins. The second class is that of distr distributors ibutors who primarily resell standard IMC products in the spares and replacement market. The third category are the end customers themselves who may opt to procure custom made spares and replacement products directly from IMC. IMC tries to aggregate demand from various sources and plan for the synchronization of sales, production, warehousing, shipping, procurement and financing activities. Business challenges and improvement areas Based on the study undertaken, the company discovered significant under under-performance ormance in its business operations. Loss of sales due to unavailability of inventory, high forecasting errors, increase in delivery lead times, high dealer margins and presence of slow moving and obsolete stocks were eating into the company margins. Other challenges included complexity and overlapping nature of the distribution chain with its channel conflicts, poor visibility into inventory stocks and secondary sales at distributor level, lower service levels due to high demand and supply variability, incr increasing easing working capital requirements, manual planning and scheduling processes with their inherent inefficiencies and lack of availability of leading signals to indicate demand changes.
2012 Sandeep Khedkar. All rights hts reserved. P a g e |1

To deal with the new business challenges in a changing economic landscape, the company conducted an exhaustive analysis of its business and found some critical gaps in their th business operations. It started an organization transformation exercise that would lead to significant sig business gains. It aimed to accurately accuratel identify strategic business initiatives and ensure their successful execution to reap the desired benefits.

SANDEEP KHEDKAR Transformation planning at IMC The IMC leadership team realized that many of these business problems actually stemmed from the fact that individual units were working in functional silos and lacked a holistic integrated understanding of the business. A fundamental relook at the organization in its entirety along with identification of specific crossfunctional dependencies in an objective fashion was critical for improving the business performance. Hence, IMC leadership created a special task force to chart out an integrated strategy map of business operations required to achieve its business goals and objectives. The initial challenge was to validate the strategic mission of IMC in light of changing circumstances. Next step was to determine its product strategy based on which operational strategic plans could be made in the primary business areas of demand generation, order fulfillment and customer service. These operationa operational plans would then seed the resourcing strategies at IMC IMC, followed by plans related to the support functions at IMC. The task force first identified areas where specific business results were necessary. These expected results were quantified with clear metrics and target values. values Key people were drawn in from various functions to form cross functional teams. Further, their t main task was to first understand business operations along with the requisite metrics and cross-functional functional touch points, and depict the same in a business model format. The team was subsequently expected to work out strategic business solutions to address specific challenges facing the organization. We recognized that unless we conduct an elemental and integral reevaluation evaluation of our business realities and processes, processes and further percolate that understanding, understanding it would be impossible ble to realize the true benefit potential for IMC. - CEO, IMC

_________________________________________________________________ _____________________________________________________________________________________ ____________________ Case Activity: A. Strategy 1.0 Business Vision and Strategy B. Primary Value Addition 2.0 Products and Services Manage ement 3.0 Demand Management 4.0 Order fulfillment 5.0 Customer Service C. Resourcing 6.0 Human Capital 7.0 Manage Information Technology 8.0 Manage Financial Resources D. Support 9.0 Acquire, Construct, and Manage Assets 10.0 Manage Risk, Compliance, and Resiliency 11.0 Manage External Relationships 12.0 Develop and Manage Business Capabilities Actions for each business area: 1. 2. 3. 4. 5. 6. 7. 8. Identify business scope and pr rimary objectives Define critical performance metrics m Identify key participants in eac ch process List and number (in logical seq quence) the key actions to be performed by ea ach participant Identify critical resources for each e participant Define key inputs and outputs s associated to each participant Link inputs and outputs across s other business area and external suppliers an nd customers Derive the important depend dencies, challenges and constraints across other business areas to ensure overall business perfor rmance Ultimately create and present t a comprehensive business model for IMC
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2013 Sandeep Khedkar. All rights hts reserved.