xtra power energy systems · 2015-10-19 · xtra power energy systems breaking the bottleneck lean...

XTRA POWER ENERGY SYSTEMS

BREAKING THE BOTTLENECK

Lean Consulting Alireza Almaleki Faith Kaplan Brian Chipman Amandeep Sekhon

Agenda Clarification

Analysis

Recommendation

Implementation

Risks

• Demand exceeds supply •  Supply chain needs

reconfiguring Key

Issues

•  Switch suppliers to solve bottleneck

•  Incentivize DLSP to manage and support open face battery system

Solution

Clarify Analyze Implement Risks Lean Consulting


Where is the Bottleneck? Customers

return batteries

Retailer stores batteries

Battery pick-up and return

to plant

Ship retailers new and

refurbished batteries


Strengths

Robust supply chain

Dynamic distribution network

Strong retailer relationships

Challenges

Market demand outstrips supply

Retailer dissatisfaction affects customer purchases

Threats

Fluctuating commodity pricing

Foreign exchange rate

Opportunities

New revenue stream

Partnerships

XTRA


Efficient logistics Revenue Feasibility

Criteria for Success


Alternatives

Work with Cretto to address bottleneck

Replace Galaxy Electrical with Haley Power

Replace Avani International and Cretto with DLSP and Dolphin Power

Replace all existing suppliers with DLSP, Dolphin Power, and Haley Power

Advantages Disadvantages

Lose market share

Demand exceeds supply

Retailer dissatisfaction

Same cost

Maintain trusted relationship

Work with Cretto


Replace Galaxy with Haley Power



Supplier trust

Bottleneck remains

Increased costs

Larger lead producer

Shorten lead time by 2 days

Replace Cretto and Avani



Supplier trust

Supplier bargaining power

Increased costs

Happier retailers

Solves bottleneck

Change All Suppliers



Resolves bottleneck

Meet increased battery demand

Happy retailers

Supplier trust

HR issues


OK, Good, Better, Best Status Quo Change Lead

Supplier Change Transportation and Lead Suppliers

Change All Suppliers

Efficient Logistics

Revenue

Feasibility

•  Demand exceeds supply •  Supply chain needs

reconfiguring Key

Issues

•  Switch suppliers to solve bottleneck


Solution



Implementation

Bottleneck solution

Partnership agreement

Retailer solutions


Bottleneck Solution

• DLSP • Dolphin Power

New partnership

• Down from 12 to 6 days

• Aligns with production

Lead Time •  Replace with

superior product

Avanti

Partnership Agreement

Concern with commitment in production chain

Tie success of reconditioned batteries to DLSP

Connect DLSP to XTRA Power Auto Industries


Retailer Solutions

Retailer Satisfaction

• Reimburse key retailers • B2B marketing • Retailer training • Relationship management


Key Performance Indicators

Turnaround

•  6 day production cycle

Sustainability

•  Eliminate waste

•  Increase battery recycling to 10%

Customer Satisfaction

•  Increase customer interaction to monthly

•  Feedback surveys


Human Resources

Staffing Increase

•  Maintain optimum staff levels

•  Local reps for local customers

Training

•  Align with lean corporate culture

•  Training best practices

•  Reduce training to 1 from 3 months

Performance

•  Supervision until confidence

•  Quality assurance

•  Feedback survey - quarterly


Operations

Standardization

•  suppliers to reduce production time: 6 to 5 days

•  Company wide efficiencies

Optimization

•  Limit in-house waste

Sharpen the Saw

•  Examine production for optimization

•  Off-site training



Marketing

Outdoor

•  Increase brand awareness and quality

Point of Purchase

•  Promote XTRA batteries

•  Highlight reconditioned batteries

B2B

•  Contests •  Incentivize

sellers to maximize sales

Timeline Months 0 to 3 3 to 6 6 to 12 12 to 18 18 to 24 24 to 32 32 to 40

PartnershipAgreementMaintenance

MarketingB TO BB TO CRetailerTraining

HRHireTrainQA

OperationsStandarizeEfficencies

QA

Phase 1 Phase 2 Phase 3


Revenue Projections


INR in Millions 2013 2014 2015 2016

Heat shielded 89.9 105 135 160

Open shielded 126 140 170 200

Recondition 17 22 27 40

Others 125 135 155 165

Total 360 402 487 560

Cost


INR in Millions 2013 2014 2015 2016 Raw material 89 99 110 130 Packaging 8 11 13 15 Logistics 95 120 145 175 Direct Costs 193 230 268 320

OVERHEADS Employee salary 41 46 51 56 Utilities 37 42 44 47 Marketing 0.7 1.5 1.5 1.5 Total Overheads 78 89 96 104

Income Statement


INR in Millions 2013 2014 2015 2016

Revenue 360 402 487 560

Direct costs 193 230 268 320

Overhead costs 78 89 96 104

N. Profit 89 83 123 136


0

100

200

300

400

500

600

1 2 3 4

Revenue N. Profit Linear (Revenue)

Risks •  Scale up supply of batteries •  Improve pick-up times of open-shield

batteries

Dissatisfied retailers

•  Link Dolphin Power and Xtra Auto to ensure mutual sustainable success

Supplier bargaining power

•  Buy forward and futures Foreign exchange


• Demand exceeds supply •  Supply chain needs

reconfiguring Key

Issues

•  Switch Suppliers to solve bottleneck


Solution


xtra power energy systems · 2015-10-19 · xtra power energy systems breaking the bottleneck lean...

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