战略研究准备.pdf

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1、.B Ba ao oS St te ee el lG Gr ro ou up pA Case Study of KPMG ConsultingsA Case Study of KPMG ConsultingsEnterprise Value Creation FrameworkEnterprise Value Creation F 海量免费资料尽在此海量免费资料尽在此C Co on nt te en nt ts sExecutive Summary3Executive Summary3Methodology and Analysis.5Findings.7Results.10Introduct

2、ion4E x e c u t i v e S u m m a r yE x e c u t i v e S u m m a r yYichang,a subsidiary of the$8 billion Chinese steel behemoth BaoSteel Group,came to KPMG Consulting to understand the changes required to be globallycompetitive,now that China has been admitted into the World Trade Organization(WTO).T

3、he client selected KPMG Consultings Enterprise Value Creation framework thathas been known to create value for companies,and has earned favorable acclaimfrom external analysts at Goldman Sachs,Aberdeen Group and AMR,among others.Through the Enterprise Value Creation(EVC)framework,the team was able t

4、ounderstand Yichangs primary problems,and to develop solutions to address theseissues.From the beginning,a high level of executive participation helped the team tohone in on the process areas of focus.They included:1.New Product Development2.Marketing,Market Analysis,Product Pricing3.Sales,Customer

5、Service,Channel Management,Customer SolutionDevelopment4.Financial and Managerial Accounting,Cost Controls5.Performance ManagementThe team relied on interviews,management reports,quantitative analysis,benchmarking,competitive intelligence and best practice information to ascertain anddocument the cu

6、rrent state of Yichangs processes and operational efficiency.AScorecard and Value Impact Analysis were used to create medium and long-termtarget metrics.After two client offsite meetings to gather feedback and to develop consensus withinthe management team,a roadmap was developed that prioritized an

7、d laid out futureinitiatives.The scorecard metrics were directly linked to the fulfillment of the roadmapprojects so ongoing measurement could be applied to gauge progress.The impact ofprocess changes were also linked to BaoSteels financial statements.In ten weeks KPMG Consultings work positioned th

8、e client to:Achieve consensus on the current state issuesDistinguish the areas of greatest opportunityAgree on remedies to current problemsMobilize efforts to become more efficient and competitiveSystematically measure and achieve the desired resultsKPMG Consultings primary sponsor,the CFO,believes

9、the EVC project was pivotalin the companys ability to be successful as the implications of Chinas acceptanceinto the World Trade Organization are realized.I n t r o d u c t i o nChinas economy has been expanding at an annual rate of seven percent over thepast three years.The GDP growth of Shanghai h

10、as approached ten percent duringthat same period.This has been fueled by Chinas entry into the World TradeOrganization,as well as the increased globalization of trade and the development ofan educated,tech-savvy workforce.While Chinas steel market has become the worlds largest,with annual demandesti

11、mated to grow by 50 million tons to more than 182 million tons by 2005,industryexpansion plans fall far short of these numbers.Only 27 million additional tons ofcapacity are forecast to be built,forcing the existing plants to either become moreefficient quickly,or to leave a lot of demand on the tab

12、le.Demand for steel in the US,Europe and Japan has been sluggish while China hasseen growth of over 400%since 1980.Consuming over 130 million toms in 2000,China is now the biggest steel market in the world.China consumed more than 130million tons1 of steel in 2000,surpassing the United States to bec

13、ome the biggeststeel market in the world.Three percent of the nations$1Trillion gross domesticproduct comes from steel and over three million people are employed in the industry.Jonathan Woetzel,a director in McKinsey&Cos Shanghai office believes that the“countrys steel producers are in poor shape t

14、o take advantage of their homelandsboom.Fragmented,uncompetitive,unprofitable,heavily in debt,and geared to thewrong products,they are losing out to imports.”BaoSteel Yichang,like most of Chinas steel industry,has focused primarily onproducing steel rather than on satisfying customers.The company tr

15、ies to keep themill running at optimal capacity to maximize their Return On Assets instead offocusing on increasing profit and customer satisfaction.Many operationalimprovements and mind-set changes,such as managing processes instead ofmanaging siloed functions,are required for real efficiency gains

16、 to be felt.Yichang,a subsidiary of the$8 billion steel behemoth BaoSteel Group,came toKPMG Consulting to understand the many changes it would have to make tocompete in the global market effectively.The client wanted an actionable roadmap they could embed in their immediateoperating plans.They viewe

17、d the roadmap as the initiating step of an evolutionaryprocess to sustain their profitability as they enter the global steel market.Manymanagement practices that are established in faster moving industries and in moreaggressive markets had not yet been introduced into BaoSteel,given the protectedmar

18、kets and significant government involvement in Chinas steel industry.The ChiefFinancial Officer considers KPMG Consulting a strategic partner in educating theteam in proven business practices.Methodology and AnalysisSpecifically,BaoSteel Yichang sought to:1.Diagnose inefficiencies in its operational

19、 and infrastructure processes2.Identify improvement opportunities3.Develop specific recommendations and solutions for future execution4.Add metrics and quantitative measurement around its key process areas5.Instill more rigorous performance management practices to aid inaccomplishing goalsThe client

20、 selected KPMGs Enterprise Value Creation framework that has beenknown to create value for companies,and has earned favorable acclaim fromexternal analysts at Goldman Sachs,Aberdeen Group and AMR,among others.Through the Enterprise Value Creation(EVC)framework,the team was able tounderstand Yichangs

21、 primary problems,and to develop solutions to address theseissues.From the beginning a high level of executive participation helped the team tohone in on the process areas of focus.They included:New Product DevelopmentMarketing,Market Analysis,Product PricingSales,Customer Service,Channel Management

22、,Customer SolutionDevelopmentFinancial and Managerial Accounting,Cost ControlsPerformance ManagementStarting with detailedin person interviewswith each of thefunctional area heads,the team steppedthrough the five stage EVC process.The interviews focused on understanding the current processes used in

23、 eacharea.These meetings,paired with reviewing management reports and othermaterials,comprised the primary method used to develop the OperationalBlueprint(EVC Phase 2).Pointed questionslaid the foundation for the teams exploration of the As-Is state.Each interviewwas augmented by further discussions

24、 with individuals responsible for key taskswithin each process.Interview questions included:1.What are the key processes in your area?2.Diagram the key processes.3.What is the estimated cost of each process?a.How long does it take?b.How many people are involved?4.What metrics are used today to manag

25、e the processes?5.What are the problems associated with the current processes?6.What do you think should be done instead?7.What metrics should be used to manage the new process?8.What changes are needed to transition to the new processes?9.What organizational structure would optimize process efficie

26、ncy?(Draw it)Process maps were developed that highlight the key steps in each focus area.The teamdistilled themetricscurrentlyapplied toas-isprocessestounderstandhow efficientandeffectivethey are.Theseprocessmaps,togetherwithconclusionsregardinghow theprocessesaremanagedandmonitored,wereintegratedin

27、to acurrent stateblueprint.FindingsBased on this information,the team identified trends throughout the organizationsuggesting that an inconsistent level of integration among the functional groups washindering efficient management of fundamental cross-functional processes.In somecases the team had to

28、 create the as-is process maps during the interview and toferret out the implicit metrics around the vital activities within that process.Togetherthe team came to an understanding that functional walls and the siloed orientation ofthe enterprise were significant factors in creating inefficiencies an

29、d driving up costs.Information useful to many teams was frequently the domain of one function,andwas not necessarily communicated to other groups.Decision making relied on limitedunderstanding of the impact on processes further up and down the value chain.Thisimpeded accountability for the decisions

30、,and disincented a broad,contextuallyinformed approach to tasks.Additionally,performance incentives were function specific and put the Manufacturing,Sales and Marketing teams at loggerheads.The former is incented to keep assetutilization levels high,while the later two are measured on customer satis

31、faction andsales levels.A number of the groups had a difficult time diagramming the keyprocesses under investigation.Individuals thinking had been caught withinfunctional walls.Linking tasks that spanned different departments,such as newproduct development,required puzzeling together pieces of dispa

32、rate functionalresponsibilities.This meant that communication addressed specific tasks instead of overall processes.It also meant that there were few or no metrics used to manage efficiency andeffectiveness from end to end.Metrics such as New Product Introduction Cycle Time,keenly regulated by many

33、High Tech companies where product iterations areintroduced every 3-6 months,were not in place at BaoSteel Yichang.While themanufacturing team could tell us the value of scrap produced in tuning a new width ofcold rolled steel sheets,the cost or time of the development process itself was notreadily k

34、nown or managed.Once the current state processes and conclusions had been validated,the team setout to aggregate best practice processes to create a gap analysis.Methodologies,metrics,benchmark values,process maps,and example case studies weredeveloped for each of the four areas.The research came fr

35、om analyst groups suchas Gartner Group,IDC,Meta Group,as well as Harvard Business Review,and steelindustry related publications.Non-industry specific information was customized toaddress Yichangs needs by the Client/KPMG Consulting process teams.Using this information,the team located gaps between b

36、est practices and the currentstate as-is processes.Three to five recommended projects were scoped in each ofthe four process areas that would help BaoSteel Yichang fill the gap.Each newprocess,organizational and infrastructural change was supplemented withcorresponding metrics.These metrics and benc

37、hmark values are consideredindispensable to manage the process effectively.A two day offsite meeting was held an hour outside of Shanghai to communicate thedetails of the recommendations.The team and executive sponsors focused onmaking sure that each internal stakeholder felt his/her needs were well

38、 representedand met by the current assessment and recommendations.Best practice informationwas presented in support of all recommendations,so the client could understand thesources of the ideas and how they can be put into practice at BaoSteel.Project scoping and validation was accomplished the seco

39、nd day leaving the team toprioritize the recommended projects.A decision model called the Business ValueMatrix was employed to help prioritize projects by ranking them based OperationalImportance and Ease of Execution.Each project was reviewed and ranked by the team along these criteria.Anindication

40、 of the rankingwas thenplaced on the matrix so theoverall portfolio ofrecommendations couldbe understood.It isimportant to note howthe recommendations foreach process area areprioritized.Anaggregation of projectsone area,suggesting similar roll-out priorities,can require lofty demands onmanagement a

41、nd staff time.This makes them difficult to roll-out effectively withoutstaggering the timing.This occurred with the Finance recommendations.The teaminre-scoped the projects to include the greatest benefit up front while still laying thenecessary foundation for future requirements.The placement was t

42、hen re-evaluated based on sequencing requirements,corporate goals,and the expected impact of earlier projects on later stageinitiatives.Once this“second-round”prioritization step was taken,those initiativesfalling in the top right quadrant those of high importance that are easy to execute are genera

43、lly pursued first.A Value Realization Roadmap(EVC Stage 3)wasthen crafted.The roadmap phased the projects into three month increments.A Scorecard(EVC Phase 5)was then built to enable management to keep the teamfocused on what needs to be accomplished.It is also a tool to drive performance.Current an

44、d target values were calculated for 40 operational and financial metrics.The metrics follow the four high priority process areas.Example metrics are:1.New Product DevelopmentNPD Cycle TimePercent of Revenue from Products Less than Two Years Old2.Marketing,Market Analysis,Product PricingMarket ShareF

45、orecast Accuracy3.Sales,Customer Service,Channel Management,Customer SolutionDevelopmentAverage Contract SizeOn Time DeliveryDispute Resolution Cycle Time4.Financial and Managerial Accounting,Cost ControlsInventory TurnsCash to Cash Cycle TimeCOGS Percent of RevenueThe Scorecard was supplemented by

46、target values that were based on benchmarks.The benchmarks came from a mixture of competitive data collected through a ValueImpact Analysis(EVC Phase 1)as well as best practice and competitive research.Industry reports such as the Steel Industry Survey provided aggregate Financial andOperational ben

47、chmarks for the most competitive companies.Working with the client,decisions were made regarding target values that could be reached as a result ofimplementing the recommendations.ResultsResultsIn ten weeks KPMG Consultings work positioned the client to:Achieve consensus on the current state issuesD

48、istinguish the areas of greatest opportunityAgree on remedies to current problemsMobilize efforts to become more efficient and competitiveSystematically measure and achieve the desired resultsThe team identified three areas of greatest client challenge:Inconsistent integration among functional group

49、sInability to share data with company-wide value beyond functional boundariesLack of metrics and no emphasis on enterprise level efficiency or valuecreationThe client is pleased with the teams conclusions and is currently moving forwardwith the recommendations to become more process-driven and to link decisions tocorporate value.Specific actions being taken include the launch of a full ERPinitiative.The CFO believes the EVC project was pivotal in the companys ability to besuccessful as the implications of Chinas acceptance into the World TradeOrganization are realized.