XTRA POWER ENERGY SYSTEMS
BREAKING THE BOTTLENECK
Lean Consulting Alireza Almaleki Faith Kaplan Brian Chipman Amandeep Sekhon
Agenda Clarification
Analysis
Recommendation
Implementation
Risks
• Demand exceeds supply • Supply chain needs
reconfiguring Key
Issues
• Switch suppliers to solve bottleneck
• Incentivize DLSP to manage and support open face battery system
Solution
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Where is the Bottleneck? Customers
return batteries
Retailer stores batteries
Battery pick-up and return
to plant
Ship retailers new and
refurbished batteries
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Strengths
Robust supply chain
Dynamic distribution network
Strong retailer relationships
Challenges
Market demand outstrips supply
Retailer dissatisfaction affects customer purchases
Threats
Fluctuating commodity pricing
Foreign exchange rate
Opportunities
New revenue stream
Partnerships
XTRA
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Efficient logistics Revenue Feasibility
Criteria for Success
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Alternatives
Work with Cretto to address bottleneck
Replace Galaxy Electrical with Haley Power
Replace Avani International and Cretto with DLSP and Dolphin Power
Replace all existing suppliers with DLSP, Dolphin Power, and Haley Power
Advantages Disadvantages
Lose market share
Demand exceeds supply
Retailer dissatisfaction
Same cost
Maintain trusted relationship
Work with Cretto
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Replace Galaxy with Haley Power
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Advantages Disadvantages
Supplier trust
Bottleneck remains
Increased costs
Larger lead producer
Shorten lead time by 2 days
Replace Cretto and Avani
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Advantages Disadvantages
Supplier trust
Supplier bargaining power
Increased costs
Happier retailers
Solves bottleneck
Change All Suppliers
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Advantages Disadvantages
Resolves bottleneck
Meet increased battery demand
Happy retailers
Supplier trust
HR issues
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OK, Good, Better, Best Status Quo Change Lead
Supplier Change Transportation and Lead Suppliers
Change All Suppliers
Efficient Logistics
Revenue
Feasibility
• Demand exceeds supply • Supply chain needs
reconfiguring Key
Issues
• Switch suppliers to solve bottleneck
• Incentivize DLSP to manage and support open face battery system
Solution
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Implementation
Bottleneck solution
Partnership agreement
Retailer solutions
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Bottleneck Solution
• DLSP • Dolphin Power
New partnership
• Down from 12 to 6 days
• Aligns with production
Lead Time • Replace with
superior product
Avanti
Partnership Agreement
Concern with commitment in production chain
Tie success of reconditioned batteries to DLSP
Connect DLSP to XTRA Power Auto Industries
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Retailer Solutions
Retailer Satisfaction
• Reimburse key retailers • B2B marketing • Retailer training • Relationship management
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Key Performance Indicators
Turnaround
• 6 day production cycle
Sustainability
• Eliminate waste
• Increase battery recycling to 10%
Customer Satisfaction
• Increase customer interaction to monthly
• Feedback surveys
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Human Resources
Staffing Increase
• Maintain optimum staff levels
• Local reps for local customers
Training
• Align with lean corporate culture
• Training best practices
• Reduce training to 1 from 3 months
Performance
• Supervision until confidence
• Quality assurance
• Feedback survey - quarterly
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Operations
Standardization
• suppliers to reduce production time: 6 to 5 days
• Company wide efficiencies
Optimization
• Limit in-house waste
Sharpen the Saw
• Examine production for optimization
• Off-site training
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Clarify Analyze Implement Risks Lean Consulting
Marketing
Outdoor
• Increase brand awareness and quality
Point of Purchase
• Promote XTRA batteries
• Highlight reconditioned batteries
B2B
• Contests • Incentivize
sellers to maximize sales
Timeline Months 0 to 3 3 to 6 6 to 12 12 to 18 18 to 24 24 to 32 32 to 40
PartnershipAgreementMaintenance
MarketingB TO BB TO CRetailerTraining
HRHireTrainQA
OperationsStandarizeEfficencies
QA
Phase 1 Phase 2 Phase 3
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Revenue Projections
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INR in Millions 2013 2014 2015 2016
Heat shielded 89.9 105 135 160
Open shielded 126 140 170 200
Recondition 17 22 27 40
Others 125 135 155 165
Total 360 402 487 560
Cost
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INR in Millions 2013 2014 2015 2016 Raw material 89 99 110 130 Packaging 8 11 13 15 Logistics 95 120 145 175 Direct Costs 193 230 268 320
OVERHEADS Employee salary 41 46 51 56 Utilities 37 42 44 47 Marketing 0.7 1.5 1.5 1.5 Total Overheads 78 89 96 104
Income Statement
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INR in Millions 2013 2014 2015 2016
Revenue 360 402 487 560
Direct costs 193 230 268 320
Overhead costs 78 89 96 104
N. Profit 89 83 123 136
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0
100
200
300
400
500
600
1 2 3 4
Revenue N. Profit Linear (Revenue)
Risks • Scale up supply of batteries • Improve pick-up times of open-shield
batteries
Dissatisfied retailers
• Link Dolphin Power and Xtra Auto to ensure mutual sustainable success
Supplier bargaining power
• Buy forward and futures Foreign exchange
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• Demand exceeds supply • Supply chain needs
reconfiguring Key
Issues
• Switch Suppliers to solve bottleneck
• Incentivize DLSP to manage and support open face battery system
Solution
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