Click to edit Master

Experience & Outcome- TCM model

Click to edit MasterExperience sharing

• The entire Nippon Paint team is thrilled and enthused to share

their experience module wise.

• The entire team learnt on their own individual departments

which are being presented here in nut shell.

• The experiences being shared are some of it from Cost as an

outcome of the activity and some of it are also from an

improvement perspective

Click to edit MasterBusiness Strategy

• Key Learnings are:

• 1) The best learning is on the cost allocation principles –

Logistics and reach costs, dealer margins, media spend and

discount structures to be charged to the direct product

segments / channels on the basis of actuals instead of

apportioning, as part of overall Overheads leading to cost

correction and profitability improvement through better

economies and efficiencies in value chain including on

varying intensity of advertisement expenses based on

customer off-take trends

• 2) There is a need to Identify customer clusters and customer

segmentation to enable pricing strategy if any

Click to edit MasterBusiness Strategy -Contd

• 3) Driving business performance through the alignment of cost and

profitability and empowering users with visibility and flexibility

(which we have started in a limited small way now) for

improvement of resources -being the key to profit margins

• 4) Decision-making to be majorly based on strategic cost analysis

in terms of - Channels / verticals

- Product / Customer portfolio mix

• 5) To establish a strategy for product price correction based on

geography -Rural / Urban etc.,

Click to edit MasterRisk Management

• Few learning are:

• 1) To Identify and categorize risks in to Business risks, Technology

risks, Regulatory risks, Financial risks, External risks, then rank the

above risks based on their impact and probability

• 2) To identify risk types and fix risk owners and their responsibilities

and then Risk register to be reviewed by cross functional team,

Click to edit MasterStrategic Product/Customer Segment

• Key Learnings from this module are:

• 1) It is Better to have a study on Competitor intelligence, market

assessment research and external market environment in a formal

manner focusing on these parameters: a) Market Assessment b)

Consumer needs assessment c) Ongoing tracking of mind share

etc.,

• 2) Promote product ranges based on USPs and then utilise the

USPs to price the products accordingly.

• 3) Costs of developing and marketing a feature viz-a-viz expected

profits if the product feature is added or enhanced in the promotion

more specifically on comparative analysis and assessment of

feature offering in terms of feature intensity and price offering can

provide strategic inputs for decision making like price correction,

demand creation etc, sensitizing the customers for feature can

create a tremendous competitive edge.

Click to edit MasterStrategic Product/Customer Segment - Contd

• 4) Marketing spends, promotional and trade investments to be

viewed and analysed in terms of Return on Marketing Investments

(ROMI) embedding of economics in media spends by splitting of

value chain into smaller chains of activities for cost optimization

• 5) Customer Profitability Management (CPM) to be used for gap

analysis, efficiencies in value chain and moving beyond P&L to

address true cost structure and true profitability by understanding

the dynamics of customer relationship

Click to edit MasterNew Product Development

• Key learnings and experiences are

• 1) keep RM cost under optimum control to focus on cost of new

products through tools like VE / VA and also revisiting the existing

product portfolio on periodical basis including the costing the features of

new products, develop scenarios at stage-II of NPD process for cost

targets to build in more cost efficiencies.

• 2) A CFT consisting of marketing, sourcing, customer-solution, finance

and production personnel to be involved in new product development, to

implement best ideas during the initial stage of product development

• 3) Cost optimisation to be carried out on a continuous basis by having a

relook on the formulations without compromising on the quality in all the

existing lesser profitable products.

Click to edit MasterSustainability

• Key Learnings are:

• 1) Eco-friendly product range to be used as a competitive

advantage.

• 2) Detailing, monitoring and improving sustainable parameters

(or indices) holistically would provide a competitive advantage

• 3) Improving operational excellence to identify the non-value-

added activities and try to eliminate them completely.

Click to edit MasterOperational Improvements

• Some of the learnings are:

• 1) Bringing in lean thinking rather than traditional thinking for cost

optimization principles by improving cost vision/culture at various

levels of the organization

• 2) Encourage cost innovations in the teams like quality and safety

by celebrating cost innovation week as a strategic approach to tap

out-of-box ideas for cost optimisation across the shop floor

• 3) Improvement process has to have connection to the cost

management which would be driving operational improvements at a

detailed level

• 4) Identifying, measuring, Optimising and controlling the cost of

resources consumed in performing the activities / processes

Click to edit MasterCost Accounting Process

• Key Learnings are:

• 1) Product and customer profitability to be used by senior

management for making key decisions.

• 2) Resources, infrastructure and timeshare of the management to be

captured and synchronized

• 3) Off-line accounting and costing exercise to measure, understand

and analyse the channel profitability -is of strategic importance

including cost of brand building campaigns linkage to the product

cost, product volumes, product discount, product pricing over a

certain period of time

• 4) Consolidation of Sourcing activities for all purchases – A major

scope for cost optimization, reduction and control.

Click to edit MasterFeature & Channel Costing

• Significant Learning include amongst others :

• 1) To map all the RMs with respect to their features analyse its

linkage to the feature cost of the Finished product(s)

• 2) Analysis on Channel Costing at various level can bring in cost

efficiency by focussing more on better product mix in those high

cost counters to improve better realisation- can also help us

strategize on Low Cost Hi Potential Counters

• 3) Grouping of the channel counters geographically can give us

input to optimise the operating cost as well -will help us plan a

cost effective promotion.

Click to edit MasterERP System and Business Analytics

• Some of our Learnings are:

• 1) To ensure precision, speed and transparency of transactions

happening across the organisation, the connectivity between

ERP and TCM database for data-warehousing and generating

business analytics is to be implemented in a robust manner

• 2) IT architecture to be economically structured to balance costs

and value in business

Click to edit Master

THANK YOU!