Value Creation Copyright 2008 Alex Coman ARENA Value Delivery: Harmonic Strategic Planning Refinement Stages: Arena, Focus, Action Create Strategy Corporate Layer: Portfolio Businesses Arena Layers: Maximize Value Corporate, Business Layer: Business Positioning Products by Market Strategy Core Define Hierarchy Operations Layer: Process, Project and Product Agile value drive A A R E N A F O C U S C T I O N Arena actors: Partners, Threats; Current, Future Target Criteria Tailored Patterns. Prioritize attention Manage Control span Alex@Coman.org Tel:(972)3-510-1768 -1- WWW.Coman.Org Dynamic Vectors: Vision, Resource, Deliver Guru 2 Gorilla Value Creation Copyright 2008 Value Creation Alex Coman ARENA Canonical Form Entities: Market Firm/Coalition Vocabulary Relationships: Business Drugs Control Information Teva Web Monopoly/ Regulatory Agency Integration: FDA Vertical Syntax Horizontal Value Chain: Structure Up Low Farmer Concise: Back Dairy Push Link Markets rather than Firms Distributor Business implies information flow. Retailer Down Titles on significant arrows. Forward High Consumer Pertinent entities only. Pull Alex@Coman.org Tel:(972)3-510-1768 -2- WWW.Coman.Org Value Creation Copyright 2008 Value Creation Alex Coman Health-Care Corporate Arena FDA Ministry of Health GMP Ivax Vitamed GSK Teva Teva Innovative Generic Drug Manufacturers American CTS Lemon Glaxo IL Hospital Supplies Distributors Product EDI Disease Specialists Advertising Management Clalit Shahal Macabi Health Management Org. Admin Tele List SuperPharm ShorTab Macabi Physicians medicine Pharmacies Web eMed Prescription IMS Prescription Drugs Public Alex@Coman.org Tel:(972)3-510-1768 -3- WWW.Coman.Org Over the Counter Value Creation Copyright 2008 Value Creation Alex Coman Virtual Firm: off-shoring Agility: Value Net Li&Fung: 3,600 employees in 37 countries: Logistics South Korea: Spinning Japanese plant in Guangdong China: zippers Li&Fung European fashion designer Orders thousands of garments (Virtual Firm) Five Tai sewing workshops Shipper Distributor Customer Alex@Coman.org Tel:(972)3-510-1768 -4- WWW.Coman.Org Value Creation Copyright 2008 Value Creation Alex Coman Time-To-Market: TTM Inditex’79 HiTex 23 Robot cut & Die #3 >40% 400 Small Shops >50% Zara ‘75 Zara 467Stores Older& Wealthier Delta Fabric Far East Far Tefron Benetton Solog Delta East Garment Manufacturers Benetton Victoria’s Secret Labels Benetton Walmart Retailers St.Michael CK H&M Inner 900 Secret GAP suppliers GAP H&M M&S Macy’s 25-35yearsCollege Crowd Late Teens Girls 12+Up Anti Gap Trendy Urban Cost Conscious Cheap cool Customers Alex@Coman.org Tel:(972)3-510-1768 -5- WWW.Coman.Org Value Creation Pareto Copyright 2008 Value Creation Share of total revenue 100% 90% 80% Alex Coman C B “A” Significant few: 20% of population 80% of resources “B” 30% of population 10% of resources “C” 50% of population 10% of resources Classify – סווג Differentiate - בדל 20% Alex@Coman.org 30% Income Group Tel:(972)3-510-1768 -6- WWW.Coman.Org 50% 100% Value Creation Copyright 2008 Value Creation Alex Coman Pareto Distribution of US federal Income-tax revenue by income group 100% 50% 100% 25% 80% Share of total revenue 80% 15% 60% 4 40% 20% 60% 5 40% 20% 1 4 5 15% 25% 50% Income Group Alex@Coman.org Tel:(972)3-510-1768 -7- WWW.Coman.Org 0 Value Creation Value Creation High Oyster 80% 4% Value Expected Copyright 2008 Focus: 25% / 25% Pearl – 16% Alex Coman 4%Effort=64%Value White Low Elephant 64%E= 4%V Quick Wins 64% Difficult 80% Alex@Coman.org Easy Ease to Implement Value Creation Tel:(972)3-510-1768 -8- WWW.Coman.Org Copyright 2008 Value Creation Alex Coman FAST: from SWOT to SWAT Vision חזון Opportunities הזדמנויות Value חשוב Arena זירה Threats איומים Focus מיקוד Ease קל Action מימוש Strengths עוצמות Core ליבה Weaknesses חולשות Alex@Coman.org Tel:(972)3-510-1768 -9- WWW.Coman.Org Value Creation Copyright 2008 Value Creation Alex Coman Event-Factor-Review – EFR Event Outcome Description Value Factors Strengths Weaknesses Success Failure Pending Alex@Coman.org Tel:(972)3-510-1768 -10- WWW.Coman.Org Value Creation Value Creation Event Outcome Description Winning a tier 1 customer contract Leading a Success significant technical standards committee Copyright 2008 Alex Coman Event-Factor-Review Factor Strengths Weaknesses Rapid multidisciplinary •Product not product development. differentiated Good engineering and enough. production. New markets Good interdisciplinary require communications. “education”. Sales to market leaders. Technological innovation and professionalism. Choice people working in a creative atmosphere. High employee motivation. Exceeding Strong sales department. sales High sales growth rate. targets Tel:(972)3-510-1768 -11- WWW.Coman.Org Alex@Coman.org The firm is losing money. Value Creation Copyright 2008 Alex Coman Event-Factor-Review Event Factor Outcome Description Strengths Weaknesses Failure to sell to the leading Technological Small player in giants’ company in leadership. playground. the market Value Creation Failure Losing money over a period of 3 years Product over-specification and over-design. No access to the end-user Insufficient R&D strategic gating. High burn rate. Failure in M&A negotiations with a leading player in the industry Excessive technological orientation. No awareness of mergers and acquisition (M&A) potential. Alex@Coman.org Tel:(972)3-510-1768 -12- WWW.Coman.Org Value Creation Copyright 2008 Value Creation Alex Coman Core-Competence-Tree - CCT Owner Value was created High Sales Growth rate Sales to Market Leaders Strong Sales Department Good Engineering And Production Technological Innovation and Professionalism Rapid multidisciplinary System view Development Influence in Standards Committee Good Inter-functional High employee Motivation Communications Sales and Partnership with Choice People working in an atmosphere of excellence Leading Firms Technological Leadership Core Competencies Vision, Leadership and Managerial Ability Alex@Coman.org Tel:(972)3-510-1768 -13- WWW.Coman.Org Value Creation Copyright 2008 Value Creation Alex Coman Current-Reality-Tree - CRT Firm’s Market Value is Insufficient No Exit The Firm is Losing Money No Awareness to M&A Objectives Product Over-Specification and Over-Design Low Profitability Not enough Strategic Product Not No access to Gating in R&D Differentiated Enough The end User New markets Require “Education” Excessive Technology High Burn Focus on single Small Player Orientation New Technology In Giants’ Arena Rate Root Problems Alex@Coman.org Tel:(972)3-510-1768 -14- WWW.Coman.Org Value Creation Copyright 2008 Current-Reality-Tree Current-Reality-Tree: CRT Alex Coman Major Un-Desired Effect 8-12 Un-Desired Effects (UDE): Brainstorm Current Concrete Undesired Under our influence Value Creation Schema Arrows pointing from cause to effect. Effects at top, Causes at bottom. Root Problems ≈ 3 Feedback loops. Alex@Coman.org Tel:(972)3-510-1768 -15- WWW.Coman.Org Value Creation Value Creation Copyright 2008 Current-Reality-Tree Alex Coman Expensive Low Product High Product Cost Infrastructure Maturity Low Forecast Lack of DFX Long Lack of Reliability Planning Development commonality Process Resource Sales Process TTM Market management conditions Information management Flow in org. High mix Market Business Low volume Measurement ($) Conditions Incomplete Buyers’ Information development Market Marketing systems policy Lack of Lack of knowledge SynchronizationCompetition Culture Outdated Lack of technology Structured Forgiveness processes No value engineering Alex@Coman.org Org. size & complexity Tel:(972)3-510-1768 -16- WWW.Coman.Org Value Creation Value Creation Alex@Coman.org Copyright 2008 Tel:(972)3-510-1768 -17- WWW.Coman.Org Alex Coman Value Creation Value Creation Alex@Coman.org Copyright 2008 Tel:(972)3-510-1768 -18- WWW.Coman.Org Alex Coman Value Creation Copyright 2008 Value Creation Alex Coman Vision Value Opportunities Arena Focus Action Ease Threats Strengths Core Weaknesses Alex@Coman.org Tel:(972)3-510-1768 -19- WWW.Coman.Org Value Creation Value Creation Alex@Coman.org Copyright 2008 Tel:(972)3-510-1768 -20- WWW.Coman.Org Alex Coman Value Creation Value Creation Alex@Coman.org Copyright 2008 Google Tel:(972)3-510-1768 -21- WWW.Coman.Org Alex Coman Value Creation Copyright 2008 Value Creation Alex Coman Vision Opportunities Arena Value Focus Action Ease Threats Strengths Core Weaknesses “It is not enough to succeed; Others must fail” Gore Vidal Alex@Coman.org Tel:(972)3-510-1768 -22- WWW.Coman.Org Value Creation Copyright 2008 Value Creation Alex Coman Ansoff Product Line Ansoff Old New Market Development: Diversification: (3/4 failure) M New A R K E T Old The Firm Old Old New Old Market Market Market Penetration Product Development: The Firm Old Old Market Penetration Market Development Boutique Firm Firm Old New Old New Market Market Breadth Product Development Firm Firm New Old Old Market Diversification Depth Depth Depth Vertical Alex@Coman.org Tel:(972)3-510-1768 -23- WWW.Coman.Org Value Creation Value Creation Alex@Coman.org Copyright 2008 BritVic Tel:(972)3-510-1768 -24- WWW.Coman.Org Alex Coman Value Creation Value Creation Alex@Coman.org 2008 ReckittCopyright Benckiser Tel:(972)3-510-1768 -25- WWW.Coman.Org Alex Coman Value Creation Value Creation Copyright 2008 Alex Coman Gap Analysis Core-Competencies Gap Analysis Game-Plan Key-Success-Factors Root-Problems Alex@Coman.org Tel:(972)3-510-1768 -26- WWW.Coman.Org Value Creation Value Creation Copyright 2008 P4A: Control Cycle Alex Coman Bottleneck Performance Control Chart Process Action Deployment Who What When Exploit: Strategic Gating Utilize: Garbage Subordinate: DBR – Tactical Gating Elevate: Offload P4A Setup Job Size Cost Accounting No Kit BMT WIP Pareto Problems: CRT Tel:(972)3-510-1768 Alex@Coman.org -27- WWW.Coman.Org Value Creation Value Creation Process: .1 Aircraft Turnaround Critical Path Model Aircraft Unloading 32 minutes B747 Copyright 2008 ONBLOCK Connecting Stairs/Jetty 7 minutes Deplaning Passengers 17 minutes Recharge Catering 22 minutes Cleaning Aircraft 33 minutes Cabin Security Check 8 minutes Aircraft Loading 44 minutes Alex Coman Fueling Aircraft 32 minutes Boarding Passengers 38 minutes OFFBLOCK Alex@Coman.org Tel:(972)3-510-1768 -28- WWW.Coman.Org Value Creation 2. Performance FRONTIER OPERATIONAL PERFORMANCE vs. The Industry U.S. DEPARTMENT OF TRANSPORTATION PERFORMANCE RANKINGS On Time Arrival Performance 100 90 80 70 60 50 40 30 20 80.6 85.1 91.8 86.2 85.3 67.9 82.5 71.7 70.0 83.6 84.0 79.4 0 78.9 10 83.5 Percentage of Arrivals within 14 Minutes of Schedule Over the last 15 months, Frontier has led all major carriers in On Time Performance 8 times. May '05 Jun '05 Jul '05 Aug '05 Sep '05 Oct '05 Nov '05 Dec '05 Jan '06 Feb '06 Mar '06 Apr '06 May '06 Jun '06 Frontier Performance Industry Best Industry Average Rankings shown above compare “major” carriers with similar operations. These carriers include: Frontier Airlines, Northwest Airlines, American Airlines, AirTran Airways, Southwest Airlines, Delta Airlines, US Airways, Alaska Airlines, JetBlue Airways, United Airlines, Continental Airlines & ATA Airlines. Jul '06 Aug '06 Industry Worst Copyright 2008 3. Pareto Value Creation Alex Coman 60% 50% Reactionary 40% 30% 20% 10% 0% Technical Air Traffic Control Operations Other Weather Passengers Alex@Coman.org Tel:(972)3-510-1768 -30- WWW.Coman.Org Value Creation Value Creation Copyright 2008 4. Problems Ishikawa / Fishbone Analysis Reactionary Delay AIRCRAFT ROTATION late arrival of aircraft from another flight or previous sector CREW ROTATION awaiting crew from another flight (flight deck or entire crew) Alex Coman CABIN CREW ROTATION awaiting cabin crew from another flight Reactionary Delay LOAD CONNECTION awaiting load from another flight Alex@Coman.org THROUGH CHECK-IN ERROR passenger and baggage OPERATIONS CONTROL re-routing, diversion, consolidation, aircraft change for reasons other than technical Tel:(972)3-510-1768 -31- WWW.Coman.Org Value Creation Copyright 2008 Value Creation 5. Action Alex Coman Action Deployment Gap משימה Alex@Coman.org Process לוח זמנים Resource באחריות מי Tel:(972)3-510-1768 -32- WWW.Coman.Org Value Creation Value Creation 2008 Alex Coman מדדים 6 :הגדר Value Copyright Measures עקומת למידה:אתגר . ניהול לפי יעדים- ותגמול, מעקב – תרשים בקרה:נטר 6 Value drivers Financial: Throughput = Sales – Direct Expenses; Operating Expenses: less people or more productivity Competitive: Lead Time=Time(Finish–Start)=Work + Wait. Due-Date-Performance Functional: Inventory: Raw materials+Work-In-Process+Finished Goods Quality Robust: Problems per Million Agile: Customization Alex@Coman.org Tel:(972)3-510-1768 -33- WWW.Coman.Org Value Creation Copyright 2008 Value Creation Alex Coman Old Economy Throughput New Economy Overhead Overhead “Non recurring” Hourly rate: Overhead Hours Direct Expenses Direct Expenses “Bill-Of-Materials” Value, not quantity: Debt collection Antennas Bugs Hand sets Alex@Coman.org Tel:(972)3-510-1768 -34- WWW.Coman.Org Value Creation MAXIM Periscope Module Learning Curves I n s t r u m e n t S y n t h e s i s & A n a l y s i s L a b o r a t o r y Learning Curve Next Unit Production Cost $4,000,000 $3,500,000 $3,000,000 MAXIM PRICE H $2,500,000 90% Learning Curve $2,000,000 85% Learning Curve $1,500,000 75% Learning Curve $1,000,000 $500,000 55 49 43 37 31 25 19 13 7 1 $0 Production Unit 25 April 2003 MAXIM Periscope Module PRICE H Cost Model, p35 Final Version Copyright 2006 Coman Quality -> Garbage -> 6Dr.Alex Sigma Control Cycle: P4A Operating Due-Date- Expenses Lead Performance Time Inventory/ WIP Garbage: X10 Throughput Quality: PPM Robust Design Total Quality Management Alex@Coman.org Tel:(972)3-510-1768 -36- WWW.Coman.org Supply Chain Control Cycle: P4A Copyright 2006 Control Cycle: P4A Dr.Alex Coman Normal Distribution - Gaussian Curve Sigma = = Deviation 2 ( xi x) n 1 = ( Square root of variance ) Axis graduated in Sigma -7 -6 -5 -4 -3 -2 -1 0 1 2 3 4 5 6 7 between + / - 1 between + / - 2 between + / - 3 between + / - 4 between + / - 5 between + / - 6 68.27% result: 317300 45500 95.45% 2700 99.73% 63 99.9937% 0.57 99.999943% 0.002 99.9999998% Alex@Coman.org Tel:(972)3-510-1768 -37- WWW.Coman.org ppm outside ppm ppm ppm ppm ppm Control Cycle: P4A Copyright 2006 Dr.Alex Coman Robust Design Cost of [Lack of] Quality: X10 Law 1000 Control Cycle: P4A Acceptance Testing 100 55 185 240 Exposed 25 10 6 Coding 47% None General Planning 3 24 Damaged 1 Specifications Detailed Design Test Runs Operation 1 Complaint 250%: 380% Spec 70% Use 100% Code Alex@Coman.org Tel:(972)3-510-1768 -38- 75% Test WWW.Coman.org Control Cycle: P4A Copyright 2006 & Mean Dr.Alex/Coman Just-In-Time / Lean Pull Control Cycle: P4A Throughput Operating Expenses Due-DateLead Performance Time Quality WIP Context Switching Bad Multi Tasking Complete Kit Gator Alex@Coman.org Tel:(972)3-510-1768 -39- WWW.Coman.org Pull Control Cycle: P4A Copyright 2006 Control Cycle: P4A Dr.Alex Coman Push and Pull Tactical Gating: JIT משימות\חודש200 Pusher Gator Push Pull O O O O O O O O O O O O O O O O O O O O O O O O O 2 מחלקה O O O O O O 3 מחלקהO ב O O O O O O O O O 1 מחלקהO O O O O O O O WIP 600 משימות בתהליך O O O O O Alex@Coman.org Tel:(972)3-510-1768 -40- O 1מחלקה WIP 200 O O O משימות בתהליך2מחלקה O O O O WWW.Coman.org O 3 מחלקהO א Control Cycle: P4A Control Cycle: P4A Copyright 2006 Dr.Alex Coman Tactical Gating Garbage Time Pusher WIP = ∞ Gater 0 Control Control Freak WIP = 1 Extreme Analysis Paralysis Satisficer WWW.Coman.org Alex@Coman.org Tel:(972)3-510-1768 -41- Control Cycle: P4A Copyright 2006 Dr.Alex Coman Theory-Of-Constraints .1 .2 .3 .4 .5 .6 Control Cycle: P4A Control Cycle: P4A הגדר את המטרה זהה את האילוץ • תרשים CUT • אילוץ סרק\כשל מדיניות (תמחיר קלאסי) נצל ומצה את האילוץ • נצל :עבוד 100%מהזמן • מצה :עבוד על מה שתורם \ שעת צוואר בקבוק הכפף את שאר המערכת לאילוץ הקל על האילוץ Offload - הימנע מאינרציה WWW.Coman.org Alex@Coman.org Tel:(972)3-510-1768 -42- Copyright 2006 Dr.Alex Coman ניהול ממוקד אילוצים Control Cycle: P4A .1הגדר את מטרת המערכת :השבחת ערך הפירמה :הווה ובעתיד אילוץ: .2זהה את אילוצי המערכת כל גורם חשוב הבולם בפועל את השגת המטרה אילוצים אילוץ משאבים "צוואר- בקבוק" Control Cycle: P4A WWW.Coman.org אילוץ שוק • לקוחות • חומרים Alex@Coman.org Tel:(972)3-510-1768 -43- Copyright 2006 Dr.Alex Coman Control Cycle: P4A רהיטי דורון כמה יחידות נמכור במהלך השבוע? קצב עבודה 100יחידות בשבוע מכירות מלאי בתהליך 50יחידות בשבוע ייצור "צוואר בקבוק" 75יחידות בשבוע התקנה Control Cycle: P4A WWW.Coman.org Alex@Coman.org Tel:(972)3-510-1768 -44- Dr.Alex Coman Copyright 2006 Control Cycle: P4A ארבעה סוגי אילוצים (המשך) אילוצים אילוץ סרק • • • • • אילוץ משאבים בי"ח :מנקה פרקליטות :נייר לשכפול תנובה :אקדח שבועות מונית :רפאל פלסטיק :שפכטל "צוואר- בקבוק" Control Cycle: P4A WWW.Coman.org אילוץ שוק אילוץ כשל מדיניות • גורפת • מיושנת • מדדים מקומיים Alex@Coman.org Tel:(972)3-510-1768 -45- 2006 ExploitCopyright האילוץ- Dr.Alexומצה את .Comanנצל 3 Control Cycle: P4A מיצוי Yield - ניצול – Utilization כמה עובד: על מה עובד יעילות :האילוץ יעבוד תועלת ,אפקטיביות: 100%מהזמן האפשרי האילוץ יעבוד על מה שתורם. לחסל: תיעדוף :תרומה לשעת צוואר מפעל הזבל Muda בקבוק •אילוצי סרק יועצי השקעות בנק 8% :זמן מגע . מדיניות כשלי • עם לקוח הי-טק :סניף יקנעם Control Cycle: P4A WWW.Coman.org Alex@Coman.org Tel:(972)3-510-1768 -46- 2006 Dr.Alex Subordinate Copyright לאילוץהמערכת יתר אתComan הכפף.4 כל המחלקות האחרות צריכות ל"שרת" את האילוץ המחלקות האחרות תומכות בתוכנית לניצול ומיצוי האילוץ° שחרור העבודות בהתאם לתוכנית העבודה של האילוץ° Control Cycle: P4A Warehouse Warehouse Kit Preparation Kit Kit Preparation Preparation Lacquering Supervisor Electronic Testing Lab Processing Customer Quality Inspection Quality Assurance Processing Processing Processing Processing Electronic Testing Lab Shipping Group Technology :התמקצעות Alex@Coman.org Tel:(972)3-510-1768 -47- Customer Quality Inspection WWW.Coman.org Shipping Control Cycle: P4A Copyright 2006 המערכת אילוץ Dr.Alexפרוץ את .5 Coman Control Cycle: P4A שינוי המערכת כדי להגדיל את התפוקות שינויים הדורשים הוספת משאבים רומם – Elevate Bin, tumbler, AluAlu Peak שינויים ללא תוספת משאבים: Offload .6אם "נשבר" האילוץ ,חזור לשלב 2 Control Cycle: P4A WWW.Coman.org Alex@Coman.org Tel:(972)3-510-1768 -48- Dr.Alex Coman Copyright 2006 Offload Control Cycle: P4A שמות י"ח :וישב משה לשפט את העם .ויעמוד העם על משה מן הבוקר עד הערב... ויאמר חותן משה אליו .לא טוב הדבר אשר אתה עושה .נבל תבל גם אתה גם העם אשר עמך כי כבד ממך הדבר לא תוכל עשהו לבדך... ואתה תחזה מכל העם אנשי חיל יראי אלהים אנשי אמת שונאי בצע ...והיה כל הדבר הגדול יביאו אליך וכל הדבר הקטן ישפטו הם והקל מעליך ונשאו אתך. ויבחר משה אנשי חיל מכל ישראל ויתן אתם ראשים על העם. Control Cycle: P4A עשרת הדיברות WWW.Coman.org Alex@Coman.org Tel:(972)3-510-1768 -49- Copyright 2008 Value Creation Alex Coman FAST: from SWOT to SWAT Vision חזון Opportunities הזדמנויות Value חשוב Arena זירה Threats איומים Focus מיקוד Ease קל Action מימוש Strengths עוצמות Core ליבה Weaknesses חולשות Alex@Coman.org Tel:(972)3-510-1768 -50- WWW.Coman.Org Value Creation Control Cycle: P4A Copyright 2006 Dr.Alex Coman The Project Beam A river with no banks is a puddle Responsibility Allocation Matrix Freeze Stabilize Alex@Coman.org Tel:(972)3-510-1768 -51- Gap Deliverable SOW Nice-to-have Killer Value Risk Existential Platform WWW.Coman.org Control Cycle: P4A Control Cycle: P4A Copyright 2006 The Project Kite Dr.Alex Coman Fan Out Fan In Alex@Coman.org Tel:(972)3-510-1768 -52- WWW.Coman.org Control Cycle: P4A