Unlocking Growth Potential :

Delivering more than just service !

Team :
Corporate Cowboys
Institute:
IIT Guwahati
Members: Shreyas Gajpal
Nilesh Raj

Executive Summary

Status Quo

Issues

Goal

Shareholders
disappointed with
companys
performance in last
3 years

Capital budget
overspending

Increase
profitability beyond
current 6.29%

Institutional
investors
dissatisfied with
current growth and
profitability

Rigid Planning
procedure followed
by the reluctant
Board
Lack of Web-based
tools and services

Summary

Analysis

Increase growth of
the company
Develop strategic
vision for future

Recommendation

RECOMMENDATION
Mackintosh Grant needs
to strengthen
Operations
by developing Flexible
manufacturing system
(FMS) combined with
Lean methodology, and
increase its
Market Share
by introducing O2O
commerce, and finally
venturing into
E-commerce.

Impact

Initial state

25 lakhs

total profit to the venture

25 lakhs

profit to dilwale

profit to company 2

5 crores

total profit per year to dilwale

food and catering

rent of venue
decoration
accomadation
misc

30 lakhs
45 lakhs

75 lakhs
15 crores

cost
total cost

revenue

20 crores

Cost Distribution

Food

Rent

Dcor

Accomodation

Miscellaneous

1 choice
29.5 lakhs

total profit to the venture

18.82 lakhs

profit to dilwale

10.68 lakhs

profit to company 2

4.21 crores

total profit per year to dilwale

25.5 lakhs

food and catering

rent of venue
decoration

45 lakhs

accomadation
misc

70.5 lakhs

cost

15.792 crores

total cost

14.29 crores

revenue

goodwill increase

2.5 crores

goodwill

(-) 4 crores

Previous Cost Distribution

5%
10%
40%

15%

Food
Rent
Dcor
Accomodation
Miscellaneous

30%

New Cost Distribution

6%
10%
36%
16%

32%

Food
Rent
Dcor
Accomodation
Miscellaneous

Initial cost on catering

30 lakhs

New cost on catering

25.5 lakhs

Cost Distribution

Dilwale

Kwality

Cost procured by Dilwale

44.97 lakhs

Cost procured by Kwality

25.53 lakhs

Total Profit Comparison

30
29
28
27
26
25
24
23
22

Previous Profit

New Profit

Profit Comparison for Dilwale

New Profit to Dilwale per year

Old Profit to Dilwale per year

New Profit to Dilwale per wedding

Old Profit to Dilwale per wedding

0

50

100 150 200 250 300 350 400 450 500

3 Phase Strategy
The stage wise implementation of FMS/Lean followed by O2O-commerce model
and then stepping into E-commerce will form the basis of the strategic growth plan
Flexible
Manufacturi
ng System
with Lean
methodolog
y

Phase I
(implementation in FY16)
Make operations robust

O2Ocommerce
developmen
t

Phase II
(implementation in FY16)
Tap the potential of Internet

Phase III
Entry into
(implementation in FY17)
E-commerce
Deliver to customers
doorstep

Summary

Analysis

Recommendation

Impact

Market development through 3-Phase Strategy

A greater market penetration with a balanced approach
of 3-Phase Strategy & Marketing Mix (4P)
Preferred delivery options for purchasing of Clothing/Footwear in the UK
38%

Order online have delivered at home

Order online and collect in store

Buy in store

13%

59%

Phase III:
E-commerce cum
brick & mortar
Phase II: O2Omodel
commerce
Current Business
(FY17)
model
(FY16)
model (FY16)

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Source: Ref.1

Summary

Analysis

Recommendation

Impact

Market Analysis
Why is there a need of Web-based tools and services ?
53% of customers in the UK bought clothing/footwear products online in 2015.
53%
0%

10%

20%

30%

47%
40%

50%

60%

70%

80%

90% 100%

Online customers (Web/Mobile portals)

Offline customers (Retails stores)

Current target group of

company

60% consumers in Europe research Footwear products online before buying.

100%

69%
40%

Source: Ref.2

Summary

Analysis

818 million
people live in
423.8 billion
Europe
(+14.3%)
564 million
Turnover epeople
commerce
use Internet
Goods & Services
331 million
(Source: 2015 Europe B2C E-commerce data)
people are eshoppers
Recommendation

Impact

Phase I

Flexible Manufacturing System (FMS)

What does flexibility
mean ?
Flexibility to customize
Flexibility to innovate
Flexibility to enhance/update

Objectives

Advantages

Approaching efficiencies &

economies of scale
normally associated with
mass production

Flexible processes allow

rapid low-cost switching
between different product
lines

Maintaining flexibility
required for small & medium
sized production of parts

Flexible workers with

multiple skills

Components
FMS enables reasonably
priced & customized
products with quicker
delivery to customers

Material
Handling
System
(MHS)
Workstation

Summary

Inventory
Supervisory
Integrated
Computer
Network

Analysis

Increased savings & reduced

inventory costs

Improved capital
utilization & automated
System processing
control
Jobs

Recommendation

Impact

Phase I

Lean Approach
Cutting costs and delivering value for money to consumers without
reduced quality with minimal waste generation
Tools for Lean Methodology

Target

5S

Reduction in work- in-process (WIP)

by 52% at both inventory & process
levels

SMED
Kanban
JIT (Just in Time)
TPM (Total Productive Maintenance)
TQM (Total Quality Management)
VSM(Value Stream Mapping)

High
Pre-Lean

Improved Service with

Low Inventory
Impact of Lean transformation
on manufacturing as service
improves & inventory declines
Summary

Core Styles

Lean
Low
Poor

Analysis

Good

Recommendation

Impact

Phase II

Online-to-Offline(O2O) Commerce
What should a Website & App entail ?
How it works

Aim: Provide the

online customer an
experience instead
of just a service.

Elements
1) Online Catalogues

MGs entire assortment of

footwear is listed in a userfriendly Web & Mobile app
catalogue.

Objective:
Collaborate with IT
solution partner for
Website & Mobile
App development

2) DIY Footwear
Customization portal

Lets the user customize their

own footwear by choosing:

3) Design & Share

Target segment:

32.4 million*
consumers in
Europe who
research footwear
online before
purchasing (as of
2015)

4) Click & Collect

Design

Colour

Material

Customer shares design with

friends and family for opinion

Customer places order online

and collects product at
nearest MG outlet

Order tracking through

Website & Mobile App

Intended Impact

Enhances User
experience beyond
printed catalogues

Better product
visualization

Helps MG in referrals and

social media marketing
through satisfied
customers.

Acquisition of customers
who research footwear
online and purchase
offline

*Source: Team analysis on Ref.2, Ref.3 ,

Summary

Analysis

Recommendation

Impact

Phase II
Why not directly commence E-commerce operations with product fulfilment to customers doorstep ?
Clothing/Footwear is the
Setting up large scale
most commonly returned
E-commerce operations
product.
for MG would be capitalintensive with low
25% online shoppers in
returns initially
Germany returned

Aggressively entering Ecommerce can turn out

to be a low-profit
venture

footwear products back to

manufacturer (2015)

Home furniture

Recommendation:
Enter E-commerce space after
successful implementation of
Phase I & II strategies

2%

Home Electronics

6%

Clothing/Footwear
0%

25%

5%

10%

15%

20%

25%

30%

Source: Ref.2

Summary

Analysis

Recommendation

Impact

Phase III

E-commerce Operations
Implementation Roadmap
Which product division to start with ?

Which market to enter first ?

FWD

Europe

FWD has relatively high Profit margin,

hence sustaining costs of E-retail
operations will be easier

90% demand for FWD division comes

from UK and Europe, hence better intracontinental scalability

SWD
SSWD

10.48%
2.11%

FWD
0.00%

9.43%
2.00%

4.00%

6.00%

8.00%

10.00% 12.00%

FWD comprises 51.28% of total profits,

hence higher expected ROI than other
divisions
% of customers who prefer buying sports
shoes online is higher than other
category

Summary

Analysis

Recommendation

Impact

Phase III

E-commerce Operations
Implementation Roadmap

Which supply chain structure to

follow ?
Multichannel/dedicated outsourced
Supply chain

Improvements in Website/App
24/7 Customer helpline to assist
queries, especially for users of custommade goods

Supply chain for product fulfilment to

customers doorstep should be
outsourced to 3P Logistics firm

Web-Chat with customer care team

Mackintosh Grant being an entrant in Ecommerce should outsource its newly
developed channel

Summary

Analysis

Recommendation

Impact

Phase III

Multi-channel, dedicated outsourced supply chain

Operations for MGs customized products:

Summary

Analysis

Recommendation

Impact

What is the impact of the strategy?

3 Phase Strategy with FMS combined with Lean will enable MG to

achieve the growth targets in 3 years
Assumptions
Revenue Growth & CAGR
bn

43% expected CAGR with the

implemented reccomendations

600

Base year to be 2008 (last 3 year data)

Operating Profits
Revenue
43%

9
433

4402
3078

32%
5
360

Projections are based on 3 Phase

Strategy including futuristic data for
FY2016 & FY2017

420

21
620

Summary

Analysis

Recommendation

Impact

References

1) Ref.1:
http://www.statista.com/statistics/288725/clothing-footwear-and-accessories-shopping-attitudes-delivery-used
-by-consumers-in-the-united-kingdom-uk
/
2) Ref.2: http://
www.postnord.com/globalassets/global/english/document/publications/2015/en_e-commerce_in_europe_201509
02.pdf
3) Ref.3: McKinsey Report (2012) https://www.mckinsey.com/~/media/mckinsey/dotcom/client_service/High
%20Tech/PDFs/The_complex_path_of_Europes_iConsumers_June_2012.ashx