INDUSTRIAL INTEGRATION PROJECT

SPEAR LOGISTICS &

ACE DESIGNERS

Submitted to – Submitted by -
Prof . E. Anand Ajay Kumar(06)
Anup Agarwal (13)
Date – 15 Dec 2011 Anup Kumar (14)
Divya (31)
Gaurav Chaudhary (34)
Kamini Sharma (38)
Naveen Kumar Sahu (51)
Pooja Tharad (59)
Rajat Gupta (66)
Shikha Gupta (83)
 OBJECTIVES OF THE VISIT
1. To understand and see the processes involved in service and
manufacturing industries.

2. To understand the prime difference in the operations and

processes involved in manufacturing and service industries.

3. To help us gain first hand information regarding functioning

of the Industry.

4. To relate the concepts taught in the Classroom with its usage

in the Industry.

5. To undergo a unique opportunity to gain an insight into a

working environment related to the operations, marketing,
human resource and financial aspects of a firm.

BRIEF INTRODUCTION OF SERVICE

INDUSTRY

SPEAR LOGISTICS PVT. LTD.

Spear was founded by logistics professionals in 2001 with a
vision to be recognized as the most dependable and responsive
logistics service provider.
The following business parameters signify our speed and focus:

• Spear Logistics’ turnover - over INR 350 Million.

• Spear is a team of 900+ logistics and supply chain
professionals spread over India across 15 offices.
• Spear has over 60 warehouses which control about
1,600,000 sft of warehousing space with supporting
infrastructure and capital investment.

Spear runs operations in Mumbai, Pune, Hyderabad,

Ahmedabad, Bangalore, Chennai, Coimbatore, Kochi, Nasik,
New Delhi, Kolkata and other locations for various clients. We
typically lease warehouses to match client need, man and
equip them and run operations.
Spear team has extensive experience in logistics with setting
up and successfully running large automotive Service Parts DCs
and container freight stations.

Vision:
Spear contract logistics was founded by logistics professionals
in 2001 with a vision to be recognized as the most dependable
and responsive logistics service provider.

Organizational Values:

We Believe In and Are Committed To...

• Results Oriented –spear Logistics constantly drives for

results and success. We drive issues to closure, persist despite
obstacles and opposition, and maintain a high energy level. Our
employees readily put in the needed time and effort to achieve
results.
• Innovation –The future of the spear logistics is assured only
as long as it welcomes and rewards innovation, creativity, and
resourcefulness. We recognize “trial and error” as being
elements of innovation and continuous improvement.
Innovation has been the cause of success for the spear
logistics.
• Customer –Customer Service is our driving force. Our wish is
to continually strive to satisfy our customer by delivering
results, providing quality services, and exceeding our
customers’ expectations.
• Quality –We provide the best quality in all of our services.
Our goal is to exceed industry benchmarks.
• People –People are our most important resource. We respect
the individual’s dignity and value their contributions. We invest
in training and education to give our employees the tools to
make the spear Logistics a world-class organization.
• Teamwork and Collaboration –spear logistics provides a
positive and challenging environment that supports the
achievement of mission goals and fosters team spirit. We are
partners with our customers, stakeholders, suppliers, and are
committed to union/management partnerships.
• Integrity and Openness –The spear logistics values trust,
sincerity, honesty, and candour in relationships both personally
and organizationally. We encourage our employees to express
ideas, opinions, and thoughts in an honest and genuine
manner.
• Corporate Citizenship –The spear Logistics values a
positive corporate image and is sensitive to our corporate
responsibilities to the community. We actively participate and
support community involvement.

Organizational Values Will Be Achieved Because We

Strive to Achieve...

• Everyone understands the vision and priorities of the

organization
• People enjoy coming to work and take pride in the job they do
• Everyone is treated with respect
• Leaders model the value of employee involvement and
customer satisfaction
• People are committed and loyal to this organization
• Everyone knows who their customers are and their needs
• Everyone has the opportunity to influence how the work is
done and what it costs
• We know and measure how well we are doing in satisfying
customers
• Ideas are exchanged openly
• We systematically analyze and improve how the work is done
• Decisions are usually made by consensus
• Employees are encouraged to participate in centre-sponsored
health programs

Key Business Processes:

These key business processes singularly, or in combination with
others, are the key processes required to deliver products or
services to our diverse range of clients (engineering, chemical,
retail, and telecom) customers. Each strategic business unit or
support group performs one or more of the following key
processes:

 Warehousing and Distribution Services:-

• Dedicated Warehouses
• Shared-user Warehouses
• Limited term project centric warehouses

 Provide Carrier Management solutions and manage

orders from inception to delivery. These solutions are
carrier neutral, comprehensive, national, multi-modal.
 Spear logistics provide installation support logistics
which include functions like:-

• Warehouse expertise.
• Transportation expertise.
• Up-lifting expertise.

 Spear logistics transportation solutions coupled

with local market intelligence helps them in
delivering these capabilities:
• Dependable Vendor Management
• Route understanding, planning & optimization
• Octroi Management
• Milk-Run Management
• Multi-Point Distribution Management
• Pan-India & regional Services Management

 We provide same-day, on-demand, door-to-door

delivery services using its Intra-city delivery
systems.
How We Accomplish Our Mission:

The Spear Logistics is organizationally aligned by product lines

and major support services. Each division is essentially a
distinct business unit, capable of providing end-to-end services
to a specific customer or segment of customers. All divisions
and groups report to the Chief Operating Officer or Chief
Financial Officer who act in close coordination on day-to-day
operations. The Program Director provides overall direction and
vision for the organization.

Major Factors Affecting the Future:-

• The need for the spear logistics to operate as a business

and give the customer the best value for their money
• Customer behaviour changes as funding is distributed and
decentralized in a revolving fund
• Emergence of national business units such as the Terminal
Business Service (ATB) and other performance-based
organizations will change decision makers and
relationships.
• Changes in program funding and direction due to national
interests.
• Political, legal, technological, environmental, and
economic barriers to entering new market.
• Competition will continue to put pressure on the operating
strategies of spear Logistics
• Trend toward outsourcing governmental functions will
continue.

Strategies:

Spear Logistics will employ three key strategies to

achieve our vision and position the spear Logistics for
future success:
• Grow spear logistics as the provider of choice for supply chain
management.
• Enable our customers to address fast-paced needs by
generating and marketing innovative solutions
• Provide project management and consulting solution.

Strategy Statement:

Background
The spear logistics Strategy Statement is a recurring feature of
our Strategic Plan. The Strategic Plan is a tool to guide
managers, supervisors, and employees throughout the
organization in making business and operational decisions. The
Vision Statement clearly defines how we want to be viewed by
our customers. The vision Statement describes in broad terms
our primary function and ultimate responsibility and serves as a
guide to our workforce. Our objective is for the workforce to
know our strategy and use it as they would any other tool at
their disposal.

Spear Logistics Strategy Statement:

Spear logistics will continue to provide logistics support to our

customers. Our business focus is multi-faceted encompassing
distinct areas of emphasis represented by our Strategies. Each
focus area has common strategic themes, specifically, growth
and Expansion of the spear logistics’ capabilities and business
activities, continued improvements in the Core business
functions, and continuing to provide value added service to our
customers.
We will constantly seek to improve the quality of our services,
and be alert to new business
Opportunities that will add value to the service we provide to
our customer. We will demonstrate our pride and commitment
as public servants dedicated to provide unique services that
are second to none. Providing the best value to our customer
will be a prime objective, and we recognize lowest cost does
not always represent the best value.

Strengths, Weaknesses, Opportunities, and Threats

Analysis

Summary:
Spear logistics strategies were developed based on a
situational analysis considering current
Environmental factors, both internal and external, that could
affect the future of the company. The Strengths, weaknesses,
opportunities, and threats (SWOT) associated with each were
analyzed. The Results of this SWOT analysis formed the basis
for identification of our strategic objectives. We Established
objectives that leverage our strengths, eliminate our
weaknesses, neutralize threats, and take Advantage of
opportunities

DATA CAPTURED IN BUSINESS EXCELLENCE

MODEL FOR SPEAR LOGISTICS

Leadership
Handling over 1.8 million transactions out of 1.5 million square
feet of warehouse space across India, Spear Logistics is well
placed to provide competent logistics solutions to its clients.
Spear logistics warehousing capabilities are among the best. Its
facilities are in the West and the South, and they are rapidly
expanding their presence in the North.
They have Logistics Engineering team to overview productivity
and process review within the warehouses, Cycle Count Team
to monitor inventory integrity and MIS team to provide and
design customized MIS. These are some of their key
differentiator functions over the competition – enabling them to
execute their promise to deliver continuous value.
Carousel Operations Innovative Solutions
Their performance in productivity, inventory integrity, resource
quality and quantity are among the best in the industry. They
rely heavily on customized MIS to demonstrate performance
improvements on a continuous basis.

Policy and Strategy

Spear is a contract logistics services provider that provides
critical service parts warehousing services to its clients. They
take responsibility for the performance of all their suppliers and
for ensuring the availability of resources and equipments
needed to control the flow of goods under their charge. They
invest time and expertise to fully understand their client
business before designing plan to improve the client supply
chain. Spear is a contracts logistics company, which has its own
challenges. A lot of transport operators call themselves logistics
companies. But they do not have warehouses; they have more
of godowns. Spear logistics believe in the adage "the right
cargo, at the right place, at the right time and at the right
cost". They have industrial solutions engineers with them, who
engage with the customers. They study their entire process.
Then they come up with our own concept paper. They help
customers to reduce costs in all aspects. This helps customers
get its receivables faster. Once the concept paper is accepted
by the customer they go into costs, KPIs, KRAs, SLAs,
Processes, etc. They look to balance manpower as well as
technology. They have a division that does daily cycle counts to
help reduce discrepancies in a particular warehouse. They also
do daily cycle count where certain items are counted on a daily
basis based on some analysis. Each product is counted at least
once in four months. This also helps us increase their accuracy
level. They have project implementation team that gets
involved to start operations for a particular customer. They also
hold monthly and quarterly meetings with the clients to review
if their requirements are being met based on what is
documented
People
The Spear management team is led by professionals with cross-
functional experience in logistics. The Spear management team
brings expertise and knowledge of latest international
benchmarks, unmatchable local expertise honed by years of
working in the Indian environment and, critically, a “Solution
Providers” mentality.
The overriding philosophy of the Spear management team is to
look beyond the immediate problems being faced by their
clients and to put a sustainable long-term solution in place. In
order to deliver the results Spear has put in a lean and flexible
organization with a keen process orientation.

Some of the key members of the Spear Logistics team

are:

Capt. Uday Palsule, Managing Director

Gautam Dembla, Director & CEO
Vivek Chaubal , CFO
Anosh Aga, VP, Sales
Rajneesh Disawal , National Head – Operations

Processes
Spear is a contracts logistics company, which has its own
challenges. One needs to understand the customers’
requirements for its supply chain. A lot of transport operators
call themselves logistics companies. But they do not have
warehouses; they have more of godowns.

India is a growing economy and the markets are fairly

competitive. We believe in the adage "the right cargo, at the
right place, at the right time and at the right cost". If that
doesn’t happen we lose market share.

Spear logistics has industrial solutions engineers with us who

engage with the customers. It studies its entire process. Then
they come up with their own concept paper.

Spear logistics help customers reduce costs in all aspects. This

helps customers get its receivables faster. Once the concept
paper is accepted by the customer it goes into costs, KPIs,
KRAs, SLAs, Processes, etc. .

Spear logistics looks to balance manpower as well as

technology. All the advanced nations and regions of the world
have reached the pinnacle in terms of logistics and supply
chain management.

It has a division that does daily cycle counts to help reduce

discrepancies in a particular warehouse and also do daily cycles
count where certain items are counted on a daily basis based
on some analysis. Each product is counted at least once in four
months. This also helps us increase their accuracy level.

They have project implementation team that gets involved to

start operations for a particular customer and also hold monthly
and quarterly meetings with the clients to review if their
requirements are being met based on what is documented.

CUSTOMIZING OPERATIONAL PROCESSES

In line to the ideology of focused services, we provide

customized service packages simplifying significant complexity
that enable you to gain better inventory control and deliver
improved customer service.

They work hard to learn about your business and how to align
ourselves to your organization and contribute to your success
story.
Firm believers in “no measurement, no management”, we
measure our performance and causal analysis across various
aspects of transaction handling, inventory processes and
delivery processes and that too customized to strengthen your
business fabric.

WAREHOUSE MANAGEMENT SYSTEM

The Warehouse Management System (WMS) in today’s modern
warehouse management is the nerve centre of the operation.
Its primary need is to best utilize a warehouse’s resources,
including space, labour, equipment, tasks, and material flows.
Spear believes that inefficient warehouse practice(s) is a
business parameter diminishing the bottom line of any
business. Incorrect orders, sluggish order handling processes
(due to inefficient information usage), inaccurate inventory
data, result in incorrect orders and customer dissatisfaction,
leading to lower profits and negative bottom-line impact.
Spear’s proprietary WMS is an indigenously built system with
constant improvements over the years based on our
experience of India Logistics. Our WMS is user-friendly with a
GUI, a robust database powerhouse and Microsoft windows
based operating system. It is a flexible and robust system that
handles all warehouse operational requirements.
It updates its WMS regularly to enhance its functionality. Scan
in / out operations & related activities, multi parameter based
inventory / order tracking, label printing, RF enabled operations
are some of the functions which are available today.
Spear use the Windows platform to deploy our WMS which
helps in:

• Portability
• Ease of training
• Easy back end query
• Able to import / export data in variety of formats, with any
ERP

A few sample capabilities are:

• Powerful reporting repertoire

• Transaction Listing, (Global, region, periodic)
• Daily Inward / Outward Register,
• All Master Lists,
• Warehouse Performance Reports
• Stock maintenance like Rejection, Customer Returns,
Discrepancy Etc
• Back Order Processing
• Exhaustive Report Menu which can be customized

INNOVATIONS
Spear offers innovative solutioning as one such value addition
to our customers, where we contribute to our customer's value
chain not only as a one-time value addition but of a continual
nature due to Spear tradition of improving it, with time.
Apart from the best in class performance which is a trademark
Spear service, a good example is the Spear "Business Industrial
Engineering" (BIE) function which adds value to our customer
businesses via innovative solutions upon and around their key
W&D requirements of: Innovative Warehouse design to enable
higher though put at lesser costs. MHE and MSE selection to
suit the Volume, flow (direction & magnitude) and cycle time
metrics for Optimal Cost-Benefit ratio.
Distribution network design based on data analysis of our
customer's transaction numbers.
Continuous Improvement - Spear BIE function does this as a
'birth principle' than a customer need / expectation /
requirement.

Customer Results
The customers of spear logistic are:

Ashok Leyland Ltd., Kolkata:

Key details of Spear Logistics' service offering for Ashok

Leyland:

1. Warehouse space of 34,652 square feet

2. 6,000 SKUs,
3. Spare parts - truck

Mobis India Ltd., Taloja, Near Mumbai:

Key details of Spear Logistics' service offering for Hyundai

Mobis:

• Warehouse space of 40,000 square feet

• 25000 SKUs, 15,000 inbound lines, 60,000 outbound lines
• Repacking activity
• Spare parts - auto

Atlas Copco, Nashik, Pune:

We handle various contract logistics services for Atlas Copco

and are tightly integrated with them. We handle services for
 • Altas Copco CMT
• Atlas Copco CT
• Atlas Copco IT

Key details of Spear Logistics' service offering for Atlas Copco:

• Warehouse space of 1,61,000 square feet

• 16,000 items being handled, 5,400 inbound lines, 8,500
outbound lines
• 100% physical counting to have better inventory control
and accuracy
• Scrap management

Siemens, Mumbai:

Key details of Spear Logistics' service offering for Siemens:

• Warehouse management for Siemens inside plant as well

as independent warehouses
• Warehouse space of 1,85,000 square feet
• 21,000 SKUs, 12 divisions, one roof
• Customized snapshot of Spear Warehouse Management
System for Siemens to have complete visibility to their
inventory

Cummins India Pune:

Key details of Spear Logistics Service offering to Cummins

• After market direct to use warehouse 16000 Sq. ft.

• 350 SKUs 500 dealers
• Customised warehouse management system

Armacell, Pune:

Key details of Spear Logistics' service offering for Armacell:

• Complete warehouse management across India

• Warehouse space of 35,000 square feet
• 300 SKUs, 45 transactions

Shell India Markets Private Limited, Taloja, Near Mumbai:

Key details of Spear Logistics' service offering for Shell:

 • Warehouse space of 60,000 square feet
• 315 SKUs, 780 inbound lines, 1,400 outbound lines
• 100% physical counting to have better inventory &
accuracy
• Scanning & Barcoding

Asian Paints Ltd, Ghaziabad, UP:

Key details of Spear Logistics' service offering for Asian Paints:

• Warehouse space of 30,000 square feet

• 1,400 SKUs

Spencers' Retail Limited, Mumbai:

Key details of Spear Logistics' service offering for Spencers':

• Warehouse space of 85, 000 sq ft

• 26,000 transactions per month, with 11,000 SKUs
• Wall to Wall services for increased operational efficiency
• A customized snapshot of the Spear Warehouse
Management Systems

Reliance Retail, Chennai, Madurai, Hyderabad:

Key details of Spear Logistics' service offering for Reliance

Retail:

• Warehouse space of 133, 000 sq ft

• Average 3,500 cases inbound and 7,000 line items
outbound to stores everyday
• Fresh, dry and chilled operations with more than 21,000
SKUs
• 95% RF based operation.

Essar Telecom Retail, Mumbai, Pune, Ahmedabad:

Key details of Spear Logistics' service offering for Essar

Telecom:

• Warehouse space of 4,000 square feet

• 700 SKUs, 300 inbound & 3000 outbound transactions
• Setting up warehousing and distribution in more locations
via shared warehouses
Bharti Airtel, Tamil Nadu, Andhra Pradesh, Chennai, Karnataka
and Kerala Circle:

Key details of Spear Logistics' service offering for Bharti Airtel:

• Warehouse space of 2,30,000 square feet

• 250 SKUs, 1,800 inbound lines, 2,300 outbound
transactions
• Escort service for all expansion sites and consolidation for
all transportation are the value addition that we provide

Society Results
They are into doing corporate social responsibilities but at a
very basic level. Some of their works in this field are listed
below.

• They plant trees around the area near their logistics so

that the environment of the work place is better .
• Promotes education by giving donations to the schools
near their place of operations

Key Performance Results

• Spear Logistics is an asset-light, contract logistics
company
• 2nd largest free standing warehousing services company
in India
• The company was founded by two promoters who had
over 20 years of combined experience in MNC and Indian
logistics companies before starting Spear Logistics.
• Headquartered in Pune, the company manages logistics
for clients based throughout India and it has customers
across verticals that include engineering, automobile,
telecom infrastructure & retail.
• Manages 55 warehouses across India aggregating to ~1.2
million sq ft of space and nearly US$1 billion of clients’
inventory.

Data Captured in Balance Score Card for

SPEAR LOGISTICS
Strategic Objectives, Measures, and Targets:

Spear logistics strategic objectives, measures, and targets were

developed using the “Balanced Scorecard Approach.” The
Balanced Scorecard Approach says the success of an
organization is dependent upon balancing various aspects of
the organization to achieve overall success. Managers must
look at the organization from four basic perspectives:

• The Customer Perspective –What must we do to satisfy

and retain current customers and attract new Customers?
Customers in this context are primarily the end –user of our
products or services.

• The Financial Perspective –What must we do to satisfy our

financial stakeholders? Our key financial stakeholders are
concerned with the impact of our actions and services. Our
stakeholders are interested in the value we bring to the nation
through our business.

• Internal Business Perspective –What core internal

business processes drive the results we want to achieve under
the customer perspective and the financial stakeholder
perspective? For these processes, what level of performance
must we achieve?

• Learning and Innovation Perspective –What must we do

to develop people and technology to support our internal
business processes and improve our capabilities so that we can
continue to add value for our customers and our financial
stakeholders?

*Definitions of major innovations are that warrant a significant

customer-wide announcement through letters, web, and other
open means. Minor innovations are those determined by the
CFO and COO to be Innovations.

The spear logistics Balanced Scorecard consists:

Strategic goals translate our broad strategies into action goals

to achieve our vision of the future. Measures describe what we
will measure to determine whether or not we have met our
goals. Targets for the measures are set 1-3 years out and are
designed to s-t-r-e-t-c-h our performance. If we achieve these
targets, we will transform and achieve our vision.

THE CUSTOMER PERSPECTIVE

Strategy 1: Grow the spear logistics as the provider of choice

for warehousing, carrier management, installation support,
local market intelligence and supply chain management of
future and legacy systems.

STRATEGIC MEASURE TARGET

OBJECTIVE
• Increase • Customer • Establish the
Customer Satisfaction Rating customer

Satisfaction satisfaction baseline

by FY09

and improve rating

by 10% by FY13
• Increase Quality • Reduce Number • Increase supplied
Ratings parts reported overall
defective per 1000
parts Quality Rating
units (*Customer
 Reported) by 10%

• Reduce Number per year, based on

of supplied parts FY09 baseline.
reported shipping
• Increase supplied
errors per 1000
parts
units.
shipping Quality
Rating by

15% per year based

on FY09 baseline.
• Increase customer • Response time, • Establish the
support to backorders, baseline by

enhance system and issue FY09 and improve

availability effectiveness 25% by

FY13for each
measure

Strategy 2: Enable our customers to address fast-paced needs

by generating
and marketing innovative solutions.

STRATEGIC MEASURE TARGET

OBJECTIVE
• Increase • Number • Minimum of one
innovative ofinnovations; major
outcomes scope
innovation per year
to be adopted and of innovations* and
used by
at least three (3)
customers minor

innovations to
 increase 25%

revenue by FY13

* Definitions of major innovations are that warrant a significant

customer-wide announcement through letters, web, and other
open means. Minor innovations are those determined by the
CFO and COO to be innovations.

Strategy 3: Provide project management solutions to expedite

facility modernization.

STRATEGIC MEASURE TARGET

OBJECTIVE
•Complete projects Conduct monitoring • Meet 100%
on time surveys requirements
according to
and within budget
customer
satisfaction
• Establish baseline Customer • Improve by 10%
for Satisfaction Survey by FY13

customer
satisfaction

THE FINANCIAL STAKEHOLDER PERSPECTIVE

Strategy 1: Grow the spear logistics as the provider of choice

for warehousing, carrier management, installation support,
local market intelligence and supply chain management of
future and legacy systems.

STRATEGIC MEASURE TARGET

OBJECTIVE
• Increase revenue • Revenue and cost • Achieve 25%
and margin entries in increase in revenue
and obtain 4%
Delphi general
margin from
ledger account
operations annually
by FY13

• Increase Margin
from

Operations to a
minimum of 2.5%
by FY 09
• Achieve a return • Margin divided by • ROI of at least
on inventory 10% on new
business
investment (ROI) for from operations
the

Agency when
selected to

provide Logistics
Support for new
systems.
• Decrease or • Reduction in • Reduce overhead
stabilize core overhead burden by 5%

service prices assigned to service

Divisions
Strategy 2: Enable our customers to address fast-paced needs
by generating
and marketing innovative solutions.

STRATEGIC MEASURE TARGET

OBJECTIVE
• Increase new • Revenue and cost • Achieve 5-7 cr in
business sale entries in revenue in

Delphi general FY13 and obtain 1%

ledger account margin

from operations
annually
• Maintain cost- • Fee schedule at or • Annual
effective service below competition comparative
analysis
fee structure
yields Results at/or
better

than competition
• Obtain/maintain • Net margin over • Direct and
profitable operation overhead

Results business costs decrease each

year

to minimal
sustainment
requirement.
• Decrease or • Net margin over • New business
stabilize core operation covers 15% of
corporate
service prices
overheads.
Strategy 3: Provide project management solutions to expedite
facility modernization.

STRATEGIC MEASURE TARGET

OBJECTIVE
• Increase project • Revenue and cost • Achieve3-4 cr in
sale entries in revenue in

Delphi general FY13 and obtain 4%

ledger account margin

from operations
annually

THE INTERNAL BUSINESS PERSPECTIVE:

Strategy 1: Grow the spear logistics as the provider of choice

for warehousing, carrier management, installation support,
local market intelligence and supply chain management of
future and legacy systems.

STRATEGIC MEASURE TARGET

OBJECTIVE
• Reduce the • Current number of • Decrease the
number of reds systems number of

And yellows in the Reported in the no supportable,

Supportability Supportability unreliable and non-
Report maintainable LRUs
Report and the
number of bad • Number of bad
actor Line actors
Replaceable Units
(LRUs) in the R&M
report
• Increase the • Volume and value • Increase the
number of of touch labor volume of touch
labour sales by 10%
Projects organically vs. Contractor
per year through
supported Depot Level
FY13
Support (CDLS)
• Add one system
contracts
per year for
• Number of Logistics support
systems selected
• Increase volume
for Logistics support
of new business
• Volume of new
business
• Reduce average • Average repair • Reduce average
repair time time repair time for LRU
in repair facilities by
for LRU repair and
10% over FY01
establish an
baseline
improved
methodology for
standard repair
times
• Improve service • Percent of time to • Establish fill-rate
delivery fill a customer baseline by the end
requisition on of FY09. Increase
Processes and
catalogued items number of customer
systems
within the orders filled by 50%
customer’s by FY13. Include
expected timeframe orders filled from
Distribution Centres
• Warehouse
stock only, not
Management
Planned Direct Ship
System (PDS) shipments

(WMS) Exception • Achieve 100%

Closure Report receipt closure
within 48 hours by
 end of FY-13
• Improve internal • Availability of • Cost reduction
cost analysis valid financial goals under
process and information
financial
capabilities necessary to
perspective are met
achieve
• Establishment of
financial objectives
cost analysis
and targets related
capability in each
to cost reduction
PD and Group by
• Number of FY09
analysts with

Financial
management skills
and analytical tools
developed

Strategy 2: Enable our customers to address fast-paced needs

by generating
and marketing innovative solutions.

STRATEGIC MEASURE TARGET

OBJECTIVE
• Improve qualified • Number of new • Increase NQVL
vendor base to “incumbent” (National
provide additional vendors*
Qualified Vendors
vendor (or
List) by 10% per
incumbent)
year for customer’s
opportunities
recommended
incumbents
• Improve • Number of new or • Increase number
marketing and repeat of new or
Communications of Customer Results repeat customer
results vehicle orientations per orientations by 10
year % per year.

* Incumbents = vendors not currently on the Results vehicle,

but highly recommended by customers.
Note: In the event goals are not met, the cause cannot be
attributed to a lack of valid financial reports or analyses.

Strategy 3: Provide project management solutions to expedite

facility modernization.

STRATEGIC MEASURE TARGET

OBJECTIVE
• Increase customer • Revenue and cost • Increase revenue
base entries in from

Delphi general non-traditional

ledger account customers annually
by 20%

THE LEARNING AND INNOVATION PERSPECTIVE:

Strategy 1: Grow the spear logistics as the provider of choice

for warehousing, carrier management, installation support,
local market intelligence and supply chain management of
future and legacy systems.

STRATEGIC MEASURE TARGET

OBJECTIVE
• Develop • Strategic • 100%
workforce Workforce Action implementation of
strategies
Plan Strategic Workforce
that will guide the • Managerial 360 Action plan
spear logistics to degree
by end of FY11
identify and train to
assessment
competencies; • Leadership
acquire technical • Percentage of Development
current
certifications; Program and
recruit, develop, competency Succession
inventories
retrain; develop Planning Programs
leadership and completed and are
training and
plan for succession implemented by
development end of FY10
completed
• Competency
• Number of inventory based
certifications
on future state of
• Percent of the spear logistics
increase in and training matrix
by the end of FY09.
Individual
Development Plans • Certifications for
(IDP) selected

series achieved by
the end of

FY10

• Increase IDPs by
10% per year
• Integrate an • Implementation of • Automation
automated automation implementation.

warehouse
management
system
Strategy 2: Enable our customers to address fast-paced needs
by generating
and marketing innovative solutions.

STRATEGIC MEASURE TARGET

OBJECTIVE
• Increase number • Number of • Minimum of one
of annual innovations; scale major

technology or tool of innovations innovation per year

innovations and

(2) minor
innovations to

achieve 1cr in
additional

acquisition volume
per year
• Improve formal • Number of formal • 2 relevant courses
sales/CSR training per team

skills of sales and courses completed member per year

production teams annually

per team member

Strategy 3: Provide project management solutions to expedite

facility modernization.

STRATEGIC MEASURE TARGET

OBJECTIVE
• Increase project • Number of • 85% of project
management certified project management
and consulting managers and and consulting
capability. engineers workforce

(performance, certified by end of

schedule, cost) FY 10

Strategic Plan Deployment and Action Plans:

Each Division and Group will develop annual business plans to

describe how their
organization will contribute to the achievement of the Strategic
Objectives. Preparation
of business plans is contingent upon having adequate cost and
performance data to
make projections and establish measurable goals and targets.
At a minimum business
plans will include:-
• Financial projections based on projected cost of operations,
investments, and revenue
• Resource utilization plan
• Production plan indicating anticipated changes in existing
workload, and any new
workload the Division may be planning to assume or pursue
with appropriate business
case justification
• Annual Division or Group goals must be tied to spear logistics
strategic objectives or annual goals
• Results based performance measures and targets for each
annual division goal
• Outline of key milestones for any projects associated with spear
logistics strategic goals.
BRIEF INTRODUCTION OF MANUFACTURING
INDUSTRY
ACE DESIGNERS
ACE DESIGNERS started in year 1979. Ace Designers'
foray into manufacturing took off with SPMs for the engine
valve industry, followed by semi-automatic multi-slide lathes
for the automobile industry. These modular machines, known
as Auto Lathes, turned out to be the launching pad for the
Company's emergence as a leading manufacturer of CNC
turning machines. In 1986, Ace launched its first CNC Chucker
LC-16. .
It is a company with 1600 employees, with present
turnover of Rs.600 crores and by 2012 they are targeting for
Rs.1500 crores. It is a 0% debt company. They have been
exporting since 1992. They mainly target tier 3 and tier 4
customers. They have 25 domestic competitors and 15
international competitors. For quality they follow robust
processes and they have world class machine tools. And now
the company has the 74th rank in the manufacturing firm. They
are large volume producers so they gain an advantage in the
cost of production due to economies of scale. They participate
in around twenty exhibitions every year to market their
products. Their core competencies are quality, cost stock and
service back up which help in retaining customers and to gain
more market share. Machines are designed in such a way that
they are user friendly and they give a week’s training for their
customers to make sure the customer learns all the nitty
gritties of the operating methods. They use advanced
technologies for manufacturing and go for expansion by
leveraging on their brand image. They focus on the customer’s
needs and according to which they come up with new products.
1% or 2% of their revenue is invested for research and
development which helps them to bring about at least 4 new
products every year. Customers are ready to pay premium for
their products for their after sales service. They also offer a
total solution for their customers who are in need of particular
type of CNC Lathe machines. Manpower turnover is 5% to 6%
and attrition rate at top level is 2% to 3%. This is the only
company in India which does not have union.

The company is ISO 9001:2000 certified by RW TUV.

Infrastructure & Facilities:

• Modern component production shop with CNC Lathes,
Machining Centres, Precision Grinders.

• Sheet metal plant with CNC bending machines, shearing

machines

• Design facility equipped with CAD infrastructure – Micro

cadem & Pro E software

• Precision testing & quality control equipment -Laser

interferometer, a Roundness Tester, Surface Tester,
Renishaw Ball bar Tester & CMM

• Detailed documented manufacture testing & assembly

procedures

• State of the art Information technology infrastructure

consisting of a companywide LAN, ERP, CRM, Mail servers,
SQL server Etc. All the manufacturing principals & the
 marketing offices across the country are networked on a
VP

• Trained work force with emphasis on correct processing

rather than on post-production inspection.

• Ethical Business Practices

Quality as defined by ACE DESIGNERS

The reputation of Ace is built on the solid foundation

quality assurance, which extends all the way from initial design
to the finished machines. This is as much a matter of well-
conceived systems and a strong commitment to quality, as the
high-precision testing equipment installed in the Ace plant.
Nothing is left to chance, so far as quality is concerned. This is
so, starting from the inspection and testing of procured items
to the final machine adjustments such as laser calibration.

A wide range of precise metrology devices ensures that

the prescribed quality parameters are consistently adhered to.
The ultimate objective always remains the same: The Ace
assurance of quality on cost effective products of outstanding
value.

Quality audits of the entire production process are geared

towards achieving zero defects. A wide range of precise
metrology equipment ensures that the prescribed quality
parameters are consistently adhered to. The ultimate objective
always remains the same: The Ace assurance of quality on
cost-effective products of outstanding value. Quality audits of
the entire production process are geared towards achieving
zero defects.

Research & Development:

•The strong research and development set-up is the backbone
of the Company's growth. The existing products are
continuously improved with user feedback and new products
introduced.

• The Department of Scientific and Industrial Research, Ministry

of Science and Technology granted in-house R&D unit
recognition since 1992.

• It’s a matter of pride that Ace does not rely on any technical
collaborator and all product development is internal

• The core competence of the company is in converting design

concepts into working products quickly & cost effectively

As a result of continuous expansion, Ace has kept looking for

new markets; it began its export foray in the eighties with
exports of Auto Lathes with automatic load/unload systems for
the bearing Industry. A large number of these machines are in
use and regularly exported to Brazil, Egypt, Germany, Spain,
UK & USA

• Ace has over three hundred CNC Lathes working with

international customers in Australia, Brazil, China, France,
Germany, Italy, Middle East, Netherlands, Russia, Thailand,
Turkey and UK.

• Ace exports machines & have an established distributor

network in Australia, Brazil, China, France, Germany, Italy,
Netherlands, Russia, Thailand, Turkey and UK.

• Efforts are on way to set up a distributor network in USA,

South Africa & South East Asia .They have their own well
established distribution network, they do not outsource it.

Customers

Ace machines are the preferred choice of most leading

manufacturing organization in the bearing, Automobile ( 2
wheeler & 4 wheeler), auto ancillary, and Electrical, Hydraulic &
General Engineering Industries.
Financial Brief

They follow marginal costing principle which helps them to

find the exact cost of every product produced. So they
sometimes over produce which helps to bring down the cost
since the fixed cost will be distributed among the producers. Its
not a listed company but they give dividends to private
placements. In the process of maximizing share holders wealth
they had declared 25% interim dividend in 2009 keeping in
mind that they have long term expansion plans. They are also
maintaining a balance between their dividends and reserves for
their future plans.

DATA CAPTURED IN BEM FOR ACE

DESIGNERS:
Leadership:
ACE Designers have a policy and strategy department
which drives the company into the BEM model.
• The policy and strategy team is a cross functional teams
which consist of functional heads from different
departments.

• They do have other teams as well to establish the

company’s processes in accordance with the business
excellence model (BEM).

• Leader’s role is to prioritize improvement activities like

new product development or expansion activities which is
important to the company’s objective of the following end
results that is customer reach, segmental focus, sales,
market share, profits.

• Leaders in ACE Designers follow business ethics to a great

extent wherein they have stopped catering to those
sectors which they feel are corrupt even though they lose
5% of their market share just because they are not
catering to them.

• Leaders develop culture and value of the organization. The

culture developed and inculcated by the managers makes
sure that the employees perceive that it’s their own
company and work with a sense of belongingness. They
also make sure that every employee right from the
managers to the shop floor workers wear the same
uniform and eat in the same canteen, this shatters any
discrimination among the employees. So this discipline
acts as a tool for implementing and upholding the
company’s culture. The employees of this company states
that the managers do not teach them values but it’s
absorbed from their activities. This is practiced as the
company believes that culture and values cannot be
taught to be followed but they should be imbibed by the
employees as such just by observing others following it.
The values that the leaders are providing are openness,
passion, integrity and transparency.
Policy and strategy:
• They have strict procedures to make sure that they stick
to their policies. For example they have the policy of
delivering on time to the customers. For this they have to
maintain statics of vendors, purchases department,
marketing department and suppliers. Now to control the
activities of these departments they have other policies.
All the procedure they follow to achieve one requirement
of the company is controlled by a number of policy and
ACE designers come up with these policies and they
practice this with a number of strategies. For this to be in
place they conduct meeting every Saturday, every quarter
end and every fiscal year end at different levels for
devising different policies, fiscal plans, annual plan and
tactical plans.

• Policy: ACE Designers have formed a separate policy

and strategy department which consist of different
functional heads in order to align the company’s
processes and policy in accordance with the BEM model so
that the company will excel in its industry.

• They are a zero debt company since its inception.

• They have strict policies in order to hold their values high

for example they have stopped catering to those sectors
which they feel are corrupt even though they lose 5% of
their market share just because they are not catering to
them.

• ACE designers, have a strict policy of transparent dealings,

thereby abstaining from any kind of under the table
practices.

• They mainly target tier 3 and tier 4 customers.

• They have a policy and strategy council in Ace designers

where all the heads of the functional teams are members,
 this works more like a cross functional team and these
people are responsible for all the policies and mainly the
strategies that are formed for the future, for example at
the time of our visit Ace designers had been concentrating
on their expansion strategies for they have recently
acquired land in Bangalore and are planning to expand to
acquire 50% market share.

• They have expansion plans in the next 3 to 5 years and

have planned to expand 10 times in 10 years. They also
have plans to go for listing in future. But they are
determined not to deviate from ethics and transparency
which form the value of ACE Designers. They review the
budget of the whole company every two years since the
market value of their product changes frequently. They
are discounting their future investments at 12% discount
rate. They have a Profit sharing principle by which they
share around 70% of the profits every 6 to 7 years.

People:
• Low level attrition: The people perspective involves facts
on how to manage, plan and improve the human resource
of the company. Thus Ace designers have a less than 1%
attrition rate, they have been operating for all this while
without a union and the internal customers have shown
the attainment of job satisfaction. They provide their
employees with a great working environment; also they
ensured that they did not give pink slips to anybody in
their organisation during the recessionary period. Also
they give huge bonus to their employees whenever they
have been earning profits.

• Development: They have various development plans for

their managers, they follow a 2 way ladder in which the
managers are separated on the basis of technical
background and non-technical background and the
 managers can map their growth in the organisation with
the help of this ladder. And they can also acquire training
over the period of time to help them climb the ladder.
They are also encouraged to attend all kinds of industry
exhibitions and seminars pertaining to their industry.

• Career growth: The career growth of every employee is

encouraged in ACE designers, they have been provided
with various training and have been encouraged to give
various exams for the training they have been provided
and on the basis of this, they have been provided with
promotions and increment in their compensations.

• Good compensation: The company has a very good

compensation policy and the employees are very satisfied
with it. They have been provided with 70% bonues, and
profit sharing as and when the company has earned huge
profits.

• Training and development: The company provides basis

technical training to the non technical managers and the
technical managers are provided with managerial training
in as to enable multi-tasking and to achieve efficiency in
the working of the company and to enable people to learn
multiple tasks.

• They give birthday gifts, interest free loans salary

deduction for bank loans, scholarship as a token for
appreciation, family planning incentives, sending people
for oversees exhibition which will include a team of two
one would be an engineer and the second will be a top
performer from the shop floor. Every year they conduct a
program on March 31st where MD addresses every
employee and briefs about previous years performances.

• Total number of employees is 405. The company was

established 30 years back and still it does not have any
kind of unions as the employees are getting solutions to
their problems by approaching the top management in
 case of any problems. Company in turn responds to their
problems as they consider their employees to be valuable
asset of the company.

• Accountability: targets are given to employees and

checked whether they satisfy them on regular basis if not
they are improved by giving feedbacks

• They conduct employee satisfaction survey which acts as

a feedback on the company’s HR policies and the
suggestion made so are taken seriously and implemented.

• Performance appraisal is competency based and they

divide their employees into first 20%, second 70% and
third 10% classes. People in the first 20% are top
performers and second will be average performers and the
rest needs to improve. To be promoted the employee
should be in the first class and should have worked for 3
years in ACE designers. The next 70% category will be
promoted in 4 years. The last 10% category is analyzed to
find their problems and if possible they are counselled to
improve their performance.

• Children day celebration and summer camp for the

employees children.

• They conduct recreation programs- sports like cricket to

enable the people working in the organisation develop a
sense of family towards the co-employees.

• Counselling is one of the important practises that is

followed in Ace designers, the counselling regarding any
kind of problem is done by the HR department on one to
one basis.

Partnership:
• Ace designers is in partnership with its supplier, they
share a very good relationship with their supplier for their
supplier are their business part
 • They also make sure that whatever policy the company is
coming up with is well communicated to all of its partners
as the company believes that efficiency can be maintained
through transparency.

Processes:
• The policy and strategies are decided in the board
meetings which are reviewed in further meetings like
strategic meeting with suppliers, dealers and distributors,
department level meetings. It was made sure that all
these policies are aligned to the objective and the target
of the company. This paves way for the employee’s
suggestions reach the top management

• One of the processes that were followed by Ace designers

to provide their human resource with job security and to
enable job commitment was to not give away any pink slip
during the recession period. The HR processes includes
cutting down on the extra perquisites that they earlier
provided to their employees and the bonuses that was
earlier given as supplementary compensation.

• Ace Designers uses various risk mitigation plans to hedge

against the risk that they are exposed to. For example
they face a lot of risk in their export business, thus they
have various insurance plans. And they balance their
export and imports by means of natural hedge.

• The engineers at service are paid higher than the

engineers in the shop floor. This ensures better after sales
service. This turns out to be ACE Designers key success
factor as their customers expect a good after sales service
and are ready to pay a premium for their products.

• In the recruitment process they mainly look for skills,

attitude and inclination to their field of manufacturing
usually the job in the shop floor has monotony so
 company follows job opportunities and other continuous
improvement process to get rid of the monotony.

• Every employee is empowered so they work according to

their preference and are corrected only if they are wrong.
So they have freedom to take decisions which inculcates
self improving attitudes.

• They have dress code which brings belongingness. This

will also make sure that they do not spoil their own clothes
while working on the shop floor

• The compensation of the employees is decided on the

basis of the industry survey and the industry standards
that are followed in the market to enable the people to be
satisfied of the compensation that they are being given.

• They invested in good quality plant and machinery and

imported expensive machines from Japan and Germany.
This helped them to do precision works and improve their
products quality which eventually killed competition
without decreasing the price.

• Cost reduction or cost optimization. They did not reduce

the salary of the employees like other organization instead
they reduced the operating cost by other means by
eliminating unique and costly snacks from canteen,
unwanted transportation, bonus was reduced but profit
sharing was deployed.

Society results:
• CORPORATE SOCIAL RESPONSIBILITY :
Ace Micromatic - LPM CNC Technology Centre has
been set up to provide focused training and CNC
machining technical services for the manufacturing
industry with the objective to maximize productivity and
competitiveness. As a first initiative the center has taken
up a project to provide trained CNC machine operators to
the industry. This is a part of the CSR (Corporate Social
 Responsibility) initiative taken up jointly by Ace Designers
and Micromatic machine Tools. The main objective is to
train youth from the economically weak strata of society
with non-technical back ground, put them through a
focused 8 week program and make them readily
employable in the metal cutting industry to operate CNC
machines.

• Apart from that the company believes in its value to be in

ethical business and by doing so they are indirectly
benefiting the society.

Customer results:
• The customer result which they have achieved is that their
customers are ready to pay a premium for their products
compared to the industry average prices since they are
able to deliver high quality and efficient after sales
service. Now they have achieved this customer result by
following the previously described BEM enablers
effectively.

• The results of following these values are:

• They are not getting any complaint from customers which

indicate that they are able to improve the quality of their
processes and products by following the values.

• The company is completely corruption free.

• They are not catering to the defence sector just because

they are corrupt at lower levels by which they are losing
5% of their market share.

• Their customers don’t want servicing activities but the

value of the product should be better than others at the
same cost. This value may be anything ranging from less
noise or less floor space. So now the company
understands what these values means to the customers
and that is delivered by the company.
 • They are able to deliver high quality at relatively low cost
and efficient after sales service for their customers.

People results:
• The people working in the organisation are greatly
motivated due to the employee centric actions taken by
the company consciously.

• The attrition the rate in the company is hardly 1-2%,

thereby suggesting that people have job satisfaction in the
company

• The employees of the organisation are very supportive of

the company policies because, during the recessionary
period the people were very supportive of the allowances
cuts the company made.

• The people in the organisation follow the norms of the

organisation and follow the rule book of transparency and
no differentiation on the basis of the posts the managers
hold because various best practises are followed in the
organisation is followed to ensure this.

Financial results:
Their current turnover is Rs.600 crore and CAGR is 25%.

DATA CAPTURED IN BSC FOR ACE

DESIGNERS:

Financial:
 • The financial perspective of the company includes
increasing the market share from 28% to at least 50% by
2012.

Customer:
• To achieve the customer perspective, the company
focuses on factors like QUALITY and COST.

• Their customers don’t want servicing activities but the

value of the product should be better than others at the
same cost. This value may be anything ranging from less
noise or less floor space. So now the company
understands what these values means to the customers
and that is delivered by the company.

• There customer also has the peace of dealing with a

company that is ethical and does not indulge in any kind
of under the table practices.

• They also are satisfied with the innovation Ace designers

bring in the product as and when required by the
customers. Ace has a policy of producing 4 innovative
products every year. They achieve this by introducing the
innovative requirements in their machines as and when
required by the customers they serve.

• Customers are also satisfied because they receive tooled

up solutions.

• They also adhere to the time deadlines and thus satisfying

their customers’ timely requirements.

Process:
• The processes include Lean manufacturing and Service
back-up.

• The other process that ACE follows is the cost reduction

strategy by following economies of scale by having mass
 production and the cost negotiation strategy that it follows
with its suppliers.

• When it comes to finance they have been following the

process of marginal costing.

• The company has a strict policy of following transparency

in their practices and not dealing with any concern that
does not deal in fair manner thereby they achieve the
customer perspective of attainment of trust from their
customer.

• The following procedures which help ACE Designer in

following the processes smoothly so that ultimately the
company can achieve their financial perspective.

o Lean manufacturing: Lean manufacturing or lean

production, which is often known simply as "Lean", is
a production practice that considers the expenditure
of resources for any goal other than the creation of
value for the end customer to be wasteful, and thus a
target for elimination. Working from the perspective
of the customer who consumes a product or service,
"value" is defined as any action or process that a
customer would be willing to pay for. Basically, lean
is centred around creating more value with less work.

o Quality achievement by achieving defect free

process: By this Ace designers mean that they try
and achieve quality for their products by
concentrating on the processes at the shop floor, for
 they believe that if the processes are properly
managed, that would lead to achievement of quality
in the final product.

o SAP implementation: SAP Implementation is the

whole of processes that defines a
complete method to implement the Enterprise
Resource Planning SAP ERP software in
an organization. The SAP implementation method
described in this entry is a generic method and not a
specific implementation method as such. It is based
on best practices and case studies from various
literature sources and presents a collection of
processes and products that make up a complete
implementation method to allow any organization to
plan and execute the implementation of SAP
software. They use SAP system they make planning
through ERP system. The data required flows to only
those department where it is processed every week,
or quarter or every year. Through this SAP they are
able to achieve transparency and they are able to
monitor each and every process. So the effect of this
monitoring process results in the improvement in the
employee’s efficiency by giving presentations on the
employee’s performance.

o 5S: It means the following

1. Seiri: tidiness, organization. Refers to the practice

of sorting through all the tools, materials, etc., in the
 work area and keeping only essential items.
Everything else is stored or discarded. This leads to
fewer hazards and less clutter to interfere with
productive work.

2. Seiton : orderliness. Focuses on the need for an

orderly workplace. Tools, equipment, and materials
must be systematically arranged for the easiest and
most efficient access. There must be a place for
everything, and everything must be in its place.

3. Seiso : cleanliness. Indicates the need to keep the

workplace clean as well as neat. Cleaning in Japanese
companies is a daily activity. At the end of each shift,
the work area is cleaned up and everything is
restored to its place.

4.Seiketsu : standards. Allows for control and

consistency. Basic housekeeping standards apply
everywhere in the facility. Everyone knows exactly
what his or her responsibilities are. Housekeeping
duties are part of regular work routines.

5.Shitsuke : sustaining discipline. Refers to

maintaining standards and keeping the facility in safe
and efficient order day after day, year after year.

o ACE KEIRATS

o Performance management systems: The

Company has various performance management
 systems through which they try and appraise the
performance of the people working in their
organisation. They follow 360 degree appraisal
systems, by means of which they assess the value
addition that the employee does to the company and
also assess if job satisfaction is being felt by the
employee.

o Variable cost reduction: The Company follows

mass production and thus they have their fixed cost
reduced to a great extent, but they make a conscious
effort to try and reduce the variable costs.

o 3-bin system: The company has 3 bin system where

they try and collect the waste in such a way that the
waste in collect in 3 different waste

It is believed that if these are followed for 5 years down

the line the company will be able to achieve all their
financial perspective easily.

Learning and Growth:

• The ACE designers had a learning over the period of time
that they were experiencing communication errors, which
was a learning they had gained over a period of time thus
they employed the strategy of Cross functional teams to
overcome this problem. This was a growth in terms of the
functioning of the employees that they earlier followed.,
thus they have grown in the
 • During the course of their production process they have,
over the period of their operations they have learnt about
the following types of waste:

There are 7 types of waste generated by the company

which should be eliminated for attaining maximum cost
effectiveness.

• Production wastes

• Inventory

• Defects

• Processing waste

• Motion

• Work friction

• Over production

So the company has learnt and grown in terms of improving its

processes to attain maximum cost effectiveness. However the
methods they employ to overcome this waste come under the
purview of PROCESSESS, but the learning they have about the
various waste come under the purview of LEARNING AND
GROWTH.

Specific linkages between processes and

outcomes for Ace Designers

(BUSINESS EXCELLENCE MODEL)

 PROCESSES OUTCOMES

The policy and strategy team is The functional teams helps in

a cross functional teams which achieving the key performance
consist of functional heads from results by coordinating
everything between the functions
different departments.
and reaching at sound decision
for the company
Leader’s role is to prioritize This provides for customer
improvement activities like new results and helps in innovations
product development or and brings about differentiation.
expansion activities.
Leaders in ACE Designers follow This leads to trust building and
business ethics. also results in societal results as
this is a society centric best
practise.
Leaders develop culture and This helps in achieving people
value of the organization. result by ensuring that there is
discipline and decorum
maintained in the organisation.
They have a policy of delivering By doing so they ensure that
on time to the customers they are being professional and
achieving key performance
results.
They have a policy and strategy This council had been put
council in Ace designers. together to plan out the
expansion strategy that the Ace
as an organisation has been
planning.
They have expansion plans in They are trying to expand
the next 3 to 5 years and have because they feel that they can
planned to expand 10 times in acquire more of market share,
10 years. this will serve their financial
perspective
They provide employees with a This ensure in achieving the
great working environment; people’s result in terms of
they ensured that they did not increasing their productivity.
give pink slips to anybody in
their organisation during the
recession. They give huge
bonus to employees when they
earn profits.
They have various development
plans for their managers, they
follow a 2 way ladder in which
the managers are separated on
the basis of technical
background and non-technical
background and the managers
can map their growth in the
organisation with the help of
this ladder.
The career growth of every
employee is encouraged in ACE
designers, they have been
provided with various training
and development
The company has a very good
compensation policy and the
employees are very satisfied
with it
They give birthday gifts, interest
free loans salary deduction for
bank loans, scholarship as a
token for appreciation, family
planning incentives, sending
people for oversees exhibition
Open door policy is followed in
the organisation
Targets are given to employees
and checked whether they
satisfy them on regular basis if
not they are improved by giving
feedbacks
This is done to ensure that the
managers do not become
stagnant in terms of their
knowledge and continuously
keep upgrading them.
This is done to enable the
managers to feel satisfied in
terms of the professional growth
in the organisation.
This gives the employees job
satisfaction and they feel
compensated.
This is to achieve the people
results in terms of the providing
them with the trust that they are
being taken care of and the
organisation cares about them.
This is done to ensure that
ethical and transparency is
maintained because this serves
both people and society results.
This is done to ensure that
people are made responsible for
their jobs and accountability is
assessed.
Performance appraisal is
competency based and they
divide their employees into first
20%, second 70% and third 10%
classes.
Children day celebration and
summer camp for the
employees children.
They conduct recreation
programs- sports like cricket to
enable the people working in
the organisation develop a
sense of family towards the co-
employees.
Ace designers is in partnership
with its supplier, they share a
very good relationship with their
supplier for their supplier are
their business partners
The policy and strategies are
decided in the board meetings
which are reviewed in further
meetings like strategic meeting
with suppliers, dealers and
distributors, department level
meetings.
Cutting down on the perquisites
and other extra facilities during
the recession.
Competency based appraisal is
done to ensure that the
competency that is lacking can
be honed by conscious efforts.
This is done to create a
recreational atmosphere for the
children of the employees to
ensure that the family of their
employee is also taken care of,
this ensure people’s results.
This is done to create a healthy
and fun environment at the
workplace, this done to ensure
that there is a good and healthy
spirit in the organisation
This provides with customer’s
results because good relations
with the suppliers helps them
procure good components for
their products.
This is done to ensure that every
functional departments is
involved in the calculated
decisions made in the
organisation and thus people’s
result is achieved by keeping
them well –versed.
This was down to achieve people
results of not sacking people and
retaining the employee strength.
Risk mitigation plans are taken This is done to ensure that they
up by the organisation are safeguard against the risk
faced by the company in their
export and import business.
The engineers at service are This is done to ensure that the
paid higher than the engineers after sales service are taken care
in the shop floor. of in a better manner for they
prize their customer above all
and want all the complaints
handled properly.
Every employee is empowered This done to achieve people’s
so they work according to their result in terms of trust being
preference and are corrected entrusted in the employees of
only if they are wrong. the company.
Ace follows a dress code. This is done to dissolve any
differentiation on the basis of the
post held by the people in the
organisation; it’s a people’s
result.
The salary structure is decided This done to ensure that their
on the basis of the industry employees are well
standards. compensated.

They invested in good quality This is done to ensure that the

plant and machinery and precision work is done properly
imported expensive machines and the customer’s result is
from Japan and Germany. achieved.
Cost reduction or cost By doing so they achieve 2
optimization objectives that is maximising
their profits and satisfying their
customers profitably.
(BALANCED SCORE CARD):
 PROCESSES
They follow lean manufacturing.
They follow mass production.
They follow marginal costing.
They follow transparency
They implement SAP and ERP.
They follow the 5 s system.
They follow the 3 bin system.
OUTCOMES
This done to better manage the
inventory and achieve success in
the cost reduction which helps in
maximising their profits
This is done to achieve
economies of scale and reduce
the price for a product and help
achieve customer perspective.
This is done to ensure that the t
segregation of the variable and
fixed cost can be done easily.
This done to ensure trust is
maintained with the customers.
Through this SAP they are able to
achieve transparency and they
are able to monitor each and
every process. So the effect of
this monitoring process results in
the improvement in the
employee’s efficiency by giving
presentations on the employee’s
performance.
The Five S program focuses
on having visual order,
organization, cleanliness and
standardization. The results you
can expect from a Five S
program are: improved
profitability, efficiency, service
and safety.
This is done to properly manage
the waste and help in waste
reduction. Thereby achieving
efficiency and reducing cost.
Similarities and Differences between Manufacturing and
Service organizations:
DIFFERENCES(BUSINESS EXCELLENCE
MODEL):-
• Conventionally aimed at
achieving the business
excellence model
• Looks into the societal
perspective by empowering
school pass outs by
recruiting them at the shop
floor
• We found that the
organization was highly
capital intensive
• Competitive advantage is
based on quality, cost and
their first move in the
market.
• Since experimentation is
less, R&D expenditure is
pretty low(1%-2% of the
total revenue)
• They opt for capital
reinvestment.
• Did not completely rely on
any of the models but did
align its policies and
procedures to them
• Since the organization is
specific and requires highly
skilled manpower, they
cannot look into the
societal perspective
• This organization was not
as capital intensive as the
manufacturing industry.
• Their core competency is
the IQ of the personnel
which gives them the
competitive edge.
• Since experimentation is
very much required, R&D
expenditure is high
• They practice
reengineering.
DIFFERENCES (BALANCED SCORE CARD):-

MANUFACTURING SERVICE
• Even if the organization • They aim at constant
produces a new product, experimentation.
there is only a slight
change in the sub parts
to come up with a new
product. Therefore, there
is less experimentation. • In case of customization,
the organization itself
• For customization, the advices the clients as to
customer themselves what kind of product they
provide the requirements must use and then
and as per the same, the develop accordingly.
product is manufactured.
• They aim at satisfying
their customers by
• They aim at satisfying providing timely delivery
their customers by of the services.
providing precision in
products. • Sustaining the ability to
grow and improve is at
the apex of importance.
• Constant growth and
improvement is not of • In order to achieve the
prime importance. mission and vision, they
appear as an innovation
• In order to achieve the and collaboration driven
mission and vision, they organization.
appear as an organization
that is ethical and
produces cost effective
products.
SIMILARITIES (BUSINESS EXCELLENCE
MODEL AND BALANCED SCORE CARD
INTEGRATED):-
• Both the organizations belong to the B2B market.

• Both the organizations look for building a new product

according to the customers’ needs and specifications.
They initially design the product and then develop it which
will specifically cater to the customers’ needs. The
manufacturing industries call it the “tooled up solutions”.

• Both the organization produces for commercial purposes.

• Both the organizations rely heavily on after sales services

as it helps them in increasing the customer base and
increasing the repetitive customer orders.

UNDERSTANDING THE BUSINESS

EXCELLENCE MODEL AFTER THE VISIT:-
.

Business excellence model, after the visit, was understood by

us as a systematic process of achieving excellence in a holistic
manner with the help of various enablers. Which process is a
part of which enabler, is something that the group could
understand only after the visit. It helped us to such an extent
that we were able to relate the whole model with our service
organization which does not specifically follow any model. Each
enabler has its own meaning of excellence and thrives to
achieve it with the help of different processes.

Business Excellence Model (BEM) is a tool that uses measures

of an organization's performance to drive organizational
improvement - generally by highlighting current shortfalls in
performance to management teams. Business excellence is a
goal for most organizations. It recognizes the importance of
policy and process improvement as criteria for organizational
success.

The visit provided us huge value addition and also inculcated

the idea that in an organization, however diverse the processes
may be, the ultimate objective is the same, i.e., business
excellence. It also helped us learn that different type of
organizations follow the model at different levels and
intensities. Some may completely align themselves with the
model while others may have certain essential elements of it.

Each enabler has its own scope, i.e., each enabler has a span of
processes. Any process beyond that span is not a part of that
particular enabler.

Finally, we can say that, model or no model, the organization;

under any circumstances thrive to achieve excellence in all
aspects and this is something we saw at a very practical level
and so, is imprinted in our minds for a long time.
Understanding of Balance Scorecard with respect
to the Company and its Perspectives

Financial perspective

Ace Designers
The company follows the target of increasing the market share
in India, the present figures being 28%. The company has also
set up its business in countries like Germany, U.S. etc
competing with 15 global competitors. The sales targets are
aligned with mass production generating heavy profits and
premiums for the company.

Customer Perspective

Ace Designers
Keeping up with the quality and cost effectiveness is the basic
aim of the company. The customers are offered tooled up
solutions. The company provides machines tools better than the
competitors with differences like less floor space, less noise etc.
The customers are provided good after sales service.

Internal Processes Perspective

Ace designers
The company follows cost reduction strategy through
economies of scale by having mass production. The company
caters the demand in the market by launching 3-4 new
products every year. The company religiously follows Ethical
processes in their business. The company gives good after
sales service by paying higher to the engineers involved in
service than those at manufacturing. The company follows
robust processes at the shop floor in manufacturing the
products. The company uses SAP system and planning is done
through ERP thereby closely monitoring all the processes. To
maintain on-time delivery, the company has different functional
departments like the vendor, marketing, purchases and a few
more. These departments carry on their individual processes to
meet finally meet the company objectives.