战略研究准备.doc

BaoSteelBaoSteelBaoSteel GroupGroupGroup A Case Study of KPMG Consulting s Enterprise Value Creation Framework By Marcy Jill Strauss High Tech Lead Enterprise Value Creation KPMG Consulting ContentsContentsContents 海量免费资料尽在此海量免费资料尽在此 Executive Summary 3 Introduction 4 Methodology and Analysis 5 Findings 7 Results 10 E x e c u t i v e S u m m a r y Yichang a subsidiary of the 8 billion Chinese steel behemoth BaoSteel Group came to KPMG Consulting to understand the changes required to be globally competitive now that China has been admitted into the World Trade Organization WTO The client selected KPMG Consulting s Enterprise Value Creation framework that has been known to create value for companies and has earned favorable acclaim from external analysts at Goldman Sachs Aberdeen Group and AMR among others Through the Enterprise Value Creation EVC framework the team was able to understand Yichang s primary problems and to develop solutions to address these issues From the beginning a high level of executive participation helped the team to hone in on the process areas of focus They included 1 New Product Development 2 Marketing Market Analysis Product Pricing 3 Sales Customer Service Channel Management Customer Solution Development 4 Financial and Managerial Accounting Cost Controls 5 Performance Management The team relied on interviews management reports quantitative analysis benchmarking competitive intelligence and best practice information to ascertain and document the current state of Yichang s processes and operational efficiency A Scorecard and Value Impact Analysis were used to create medium and long term target metrics After two client offsite meetings to gather feedback and to develop consensus within the management team a roadmap was developed that prioritized and laid out future initiatives The scorecard metrics were directly linked to the fulfillment of the roadmap projects so ongoing measurement could be applied to gauge progress The impact of process changes were also linked to BaoSteel s financial statements In ten weeks KPMG Consulting s work positioned the client to Achieve consensus on the current state issues Distinguish the areas of greatest opportunity Agree on remedies to current problems Mobilize efforts to become more efficient and competitive Systematically measure and achieve the desired results KPMG Consulting s primary sponsor the CFO believes the EVC project was pivotal in the company s ability to be successful as the implications of China s acceptance into the World Trade Organization are realized I n t r o d u c t i o n China s economy has been expanding at an annual rate of seven percent over the past three years The GDP growth of Shanghai has approached ten percent during that same period This has been fueled by China s entry into the World Trade Organization as well as the increased globalization of trade and the development of an educated tech savvy workforce While China s steel market has become the world s largest with annual demand estimated to grow by 50 million tons to more than 182 million tons by 2005 industry expansion plans fall far short of these numbers Only 27 million additional tons of capacity are forecast to be built forcing the existing plants to either become more efficient quickly or to leave a lot of demand on the table Demand for steel in the US Europe and Japan has been sluggish while China has seen 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 130 million tons1 of steel in 2000 surpassing the United States to become the biggest steel market in the world Three percent of the nation s 1Trillion gross domestic product comes from steel and over three million people are employed in the industry Jonathan Woetzel a director in McKinsey Co s Shanghai office believes that the country s steel producers are in poor shape to take advantage of their homeland s boom Fragmented uncompetitive unprofitable heavily in debt and geared to the wrong products they are losing out to imports BaoSteel Yichang like most of China s steel industry has focused primarily on producing steel rather than on satisfying customers The company tries to keep the mill running at optimal capacity to maximize their Return On Assets instead of focusing on increasing profit and customer satisfaction Many operational improvements and mind set changes such as managing processes instead of managing siloed functions are required for real efficiency gains to be felt Yichang a subsidiary of the 8 billion steel behemoth BaoSteel Group came to KPMG Consulting to understand the many changes it would have to make to compete in the global market effectively The client wanted an actionable roadmap they could embed in their immediate operating plans They viewed the roadmap as the initiating step of an evolutionary process to sustain their profitability as they enter the global steel market Many management practices that are established in faster moving industries and in more aggressive markets had not yet been introduced into BaoSteel given the protected markets and significant government involvement in China s steel industry The Chief Financial Officer considers KPMG Consulting a strategic partner in educating the team in proven business practices Methodology and Analysis Specifically BaoSteel Yichang sought to 1 Diagnose inefficiencies in its operational and infrastructure processes 2 Identify improvement opportunities 3 Develop specific recommendations and solutions for future execution 4 Add metrics and quantitative measurement around it s key process areas 5 Instill more rigorous performance management practices to aid in accomplishing goals The client selected KPMG s Enterprise Value Creation framework that has been known to create value for companies and has earned favorable acclaim from external analysts at Goldman Sachs Aberdeen Group and AMR among others Through the Enterprise Value Creation EVC framework the team was able to understand Yichang s primary problems and to develop solutions to address these issues From the beginning a high level of executive participation helped the team to hone in on the process areas of focus They included New Product Development Marketing Market Analysis Product Pricing Sales Customer Service Channel Management Customer Solution Development Financial and Managerial Accounting Cost Controls Performance Management Starting with detailed in person interviews with each of the functional area heads the team stepped through the five stage EVC process The interviews focused on understanding the current processes used in each area These meetings paired with reviewing management reports and other materials comprised the primary method used to develop the Operational Blueprint EVC Phase 2 Pointed questions laid the foundation for the teams exploration of the As Is state Each interview was augmented by further discussions with individuals responsible for key tasks within 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 manage 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 efficiency Draw it Process maps were developed that highlight the key steps in each focus area The team distilled the metrics currently applied to as is processes to understand how efficient and effective they are These process maps together with conclusions regarding how the processes are managed and monitored were integrated into a current state blueprint Findings Based on this information the team identified trends throughout the organization suggesting that an inconsistent level of integration among the functional groups was hindering efficient management of fundamental cross functional processes In some cases the team had to create the as is process maps during the interview and to ferret out the implicit metrics around the vital activities within that process Together the team came to an understanding that functional walls and the siloed orientation of the enterprise were significant factors in creating inefficiencies and driving up costs Information useful to many teams was frequently the domain of one function and was not necessarily communicated to other groups Decision making relied on limited understanding of the impact on processes further up and down the value chain This impeded accountability for the decisions and disincented a broad contextually informed 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 asset utilization levels high while the later two are measured on customer satisfaction and sales levels A number of the groups had a difficult time diagramming the key processes under investigation Individuals thinking had been caught within functional walls Linking tasks that spanned different departments such as new product development required puzzeling together pieces of disparate functional responsibilities 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 and effectiveness from end to end Metrics such as New Product Introduction Cycle Time keenly regulated by many High Tech companies where product iterations are introduced every 3 6 months were not in place at BaoSteel Yichang While the manufacturing team could tell us the value of scrap produced in tuning a new width of cold rolled steel sheets the cost or time of the development process itself was not readily known or managed Once the current state processes and conclusions had been validated the team set out to aggregate best practice processes to create a gap analysis Methodologies metrics benchmark values process maps and example case studies were developed for each of the four areas The research came from analyst groups such as Gartner Group IDC Meta Group as well as Harvard Business Review and steel industry related publications Non industry specific information was customized to address Yichang s needs by the Client KPMG Consulting process teams Using this information the team located gaps between best practices and the current state as is processes Three to five recommended projects were scoped in each of the four process areas that would help BaoSteel Yichang fill the gap Each new process organizational and infrastructural change was supplemented with corresponding metrics These metrics and benchmark values are considered indispensable to manage the process effectively A two day offsite meeting was held an hour outside of Shanghai to communicate the details of the recommendations The team and executive sponsors focused on making sure that each internal stakeholder felt his her needs were well represented and met by the current assessment and recommendations Best practice information was presented in support of all recommendations so the client could understand the sources of the ideas and how they can be put into practice at BaoSteel Project scoping and validation was accomplished the second day leaving the team to prioritize the recommended projects A decision model called the Business Value Matrix was employed to help prioritize projects by ranking them based Operational Importance and Ease of Execution Each project was reviewed and ranked by the team along these criteria An indication of the ranking was then placed on the matrix so the overall portfolio of recommendations could be understood It is important to note how the recommendations for each process area are prioritized An aggregation of projects in one area suggesting similar roll out priorities can require lofty demands on management and staff time This makes them difficult to roll out effectively without staggering the timing This occurred with the Finance recommendations The team re scoped the projects to include the greatest benefit up front while still laying the necessary foundation for future requirements The placement was then re evaluated based on sequencing requirements corporate goals and the expected impact of earlier projects on later stage initiatives Once this second round prioritization step was taken those initiatives falling in the top right quadrant those of high importance that are easy to execute are generally pursued first A Value Realization Roadmap EVC Stage 3 was then crafted The roadmap phased the projects into three month increments A Scorecard EVC Phase 5 was then built to enable management to keep the team focused on what needs to be accomplished It is also a tool to drive performance Current and 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 Development NPD Cycle Time Percent of Revenue from Products Less than Two Years Old 2 Marketing Market Analysis Product Pricing Market Share Forecast Accuracy 3 Sales Customer Service Channel Management Customer Solution Development Average Contract Size On Time Delivery Dispute Resolution Cycle Time 4 Financial and Managerial Accounting Cost Controls Inventory Turns Cash to Cash Cycle Time COGS Percent of Revenue The Sc