Strategy Decision sheet Domestic Auto Parts

1. Decision Making Situation

Industry : Auto parts manufacturing Company : Domestic Auto Parts Decision : To increase ROCE from 8 % to 12 % and faster growth rate than industry

2. Decision Sheet Identify key decision questions/ options and the rationale for judging them to be so My decisions (its rationale, feasibility, effects, and tradeoffs): What are my decisions (qualitative and quantitative)? Rationale and feasibilityof implementing my decision What is the impact of my decisions and how will it make a difference to my inheritance? It will require huge change in the system and may require training of the employees. The performance metrics will change and will require change in performance evaluation system as well It will improve retailer relationship. It will reduce stock outs and hence improve customer relationship What are the trade-offs in the decisions (qualitative and quantitative)? Cost of training, cost of JIT, Risk of failure in implementation.

Just in Time system JIT system will and preventive reduce the maintenance inventory cost and reduce the wastage in operations. Preventive maintenance will increase the asset utilization

Streamline Distribution system and increase information sharing across geographies

It will help in getting our products to market at a reasonable price in a reasonable time

Cost of integration of all distributors. Cost of information sharing platform

Implement Customer Oriented Startegy. Focus on

69 % customers give 90 % profit. Hence these

Will have to deliver products on time and on

Cost of establishing good supplier and distribution

more profitable customer

customers should be focused.

Bring Innovative products in market and hence position as a innovator

Integration between marketing and R & D will help in meeting customer demand

spec. It will require good distribution and supplier relationship It will help in becoming a customer oriented company and increase profit per customer

network

Cost of R & D, Cost of market Research, Cost of integration

Specify measures to mitigate the negative consequences

First company should evaluate all the tradeoffs required in a decision and should invest only after analyzing all the scenarios. As some of the changes are not reversible and require huge investment .E.g implementing JIT will require change in many other things like performance appraisal, jobs assignment etc. Hence other requirements should be drafted and prepared beforehand to implement these changes.