Strategic Planning - 09 09 2016

‫وما توفيقي إال باهلل‬
Strategic Planning Best Practice

I Have a Dream !
To be a leader in ...
Dr. Attia Gomaa

Industrial Engineering Professor & Consultant
Mechanical Eng. Department – Shoubra Faculty of Eng. - Benha University
& Engineering and Science Services - American University in Cairo
Facebook: Attia Gomaa & Group: Strategic Planning– Dr. Attia Gomaa
PM September 2016
Strategic Planning Best Practice
Contents:
1. Strategic Planning Overview
2. Vision; Mission and Values
3. Brainstorming and Focus Groups
4. Goals, Strategic Objectives and Strategy
5. Key Performance Indicators
6. Benchmarking
7. SWOT Analysis (Strengths – Weaknesses – Opportunities - Threats)
8. TOWS Analysis (Future Strategies)
9. Action Plan
10. Risk Analysis
11. Change Management
12. Case Studies
Grading Policy:
Class work: 10%, Project: 30% , Final Exam: 60%
PM Strategic Planning – Dr. Attia Gomaa - 2016 2

Rules of the Course:
This is an Open Discussion Course:
– Share Knowledge ‫– تبادل المعرفة‬

– Share Experiences ‫– تبادل الخبرات‬ Team Approach
– Share Best Practices ‫– تبادل التجارب الجيدة‬

– Share Questions ‫– تبادل األسئلة‬
Remember … You can’t do it alone!
Let us be a teamwork.
Strategic Planning ≈ Long-term planning
Strategic planning is a tool for continuous improvement
A Systematic Methodology to design the business future.
A systematic approach to develop blueprint for action and change
Strategic planning is a journey, not a destination

Planning Levels
Long term  Medium term  Short term
Environmental
Forecasting
Long range
Medium range Strategic Planning
Short
range
Very
Short
range
Management
Action
Now 2 months 1 Year 5 Year
Forecast Accuracy
Risk

Basic Levels of Planning Process
(Depend on The Planning Horizon)
1. Long-rang planning: it covers a period of 3 to 5 years
and sets plans for future activities and long-range
improvement.
2. Medium-range planning: it covers a period of 1 month

to 1 year.
3. Short-rang planning: it covers a period of 1 day to 1

week. It focuses on the determination of all the elements
required to perform maintenance tasks in advance.

Hierarchy of Plans
Site  Process Leaders Work Orders Monthly

Strategic Planning Process – Three Basic Questions
Long-Term
1: Where Do We Want To Go? View
Situation
2: Where Are We Now?
Analysis
3: What Must We Do To Close The Gap? Strategy

Strategic Planning Process:
1: Where Do We Want To Go?

Long-
Vision Values Mission Goals Strategic Term
Objectives
View
2: Where Are We Now?
Situation
Assumptions Strengths Weaknesses Opportunities Threats Analysis
3: What Must We Do To Close The Gap?
Critical Issues Strategies Action Plans Strategy

Planning Hierarchy
Vision
Mission
Goals
Strategic Objectives
Strategies
Action Plan
Work Orders

Strategic Plan Outline
1) Overview 6) Goals 11) Strategies
• ____________________________ • ____________________________ • ____________________________
• ____________________________ • ____________________________ • ____________________________
• ____________________________ • ____________________________ • ____________________________
• ____________________________ • ____________________________ • ____________________________
2) Vision 7) Strategic Objectives 12) Action Plan

• ____________________________ • ____________________________ • ____________________________
• ____________________________ • ____________________________ • ____________________________
• ____________________________ • ____________________________ • ____________________________
• ____________________________ • ____________________________ • ____________________________
3) Mission 8) KPIs 13) Financial Plan

• ____________________________ • ____________________________ • ____________________________
• ____________________________ • ____________________________ • ____________________________
• ____________________________ • ____________________________ • ____________________________
• ____________________________ • ____________________________ • ____________________________
4) Values 9) Benchmarking 14) Risk Plan

• ____________________________ • ____________________________ • ____________________________
• ____________________________ • ____________________________ • ____________________________
• ____________________________ • ____________________________ • ____________________________
• ____________________________ • ____________________________ • ____________________________
5) Focus Groups 10) SWOT Analysis 15) Change Management

• ____________________________ • ____________________________ • ____________________________
• ____________________________ • ____________________________ • ____________________________
• ____________________________ • ____________________________ • ____________________________

Strategic Planning Overview
Roadmap to transform the
Vision, Mission, Values
Mission Into Action Plan
SWOT Analysis “Environmental assessment”
8 Steps (Strengths – Weaknesses – Opportunities - Threats)
Strategies “TOWS Analysis”
Action Plan & Financial Plan
Implementation & Feedback
Control & Corrective Actions

Strategic Directions:
Vision:
Ultimate goal for future image
(Has to be realistic and not something impractical)
(Future oriented) - (4-10 words)
Mission:
How to achieve the vision?
Core purpose of your organization
Missions should be realistic, specific and motivating.
(Customer-Oriented) - (8-16 words)
Values:
A Guide for good behaviour / Beliefs
(How people treat each other?) - (3 to 6)

A Steel Company:
Our Vision is to be
one of the best steel companies in Egypt & Middle East.
Our Mission
is to produce and supply the highest quality products to our
customers up to international standards in steel industry.
Values:
We believe that strong leadership, unified teamwork, highly skilled
manpower, customer satisfaction and customer relationship are
the key to achieve our goals.
A Consultant Company
Our Vision is to be
the number one consultant company in the construction projects
in Egypt & Middle East.
Mission
to provide high quality consultant services to our clients up to
international standards in construction projects.
Values:
Strong leadership, Effective communications, Quality, Integrity,
Customer Service, Customer satisfaction, and Problem solving.
For Example: A Construction Company
Our Vision:
To be a leader in the construction projects
in Egypt & Middle East.
Our Mission:
To offer a wide range of construction projects of good design on

the international standards at low cost
Our Values:
Effectiveness, Efficiency, Integrity, Transparency, Reliability
Proactive
Our Vision: To be a leader in the construction projects in Egypt & Middle East.
What do we need to be? A leader

In which field? Construction projects
Is it ambitious? yes
Is it a clear and simple vision? yes
Does it represent an ultimate goal? yes
Is it future oriented? yes
Size (4-10 words) 11
Is it easy to remember yes
Is it a SMART ?
Specific Yes It is specified as “a leader in the construction projects”
Measurable No It is not quantified
Applicable Yes It could be applicable (depends on the current sitiuation)
Realistic / Reliable Yes It could be realistic
Time frame No It has no time bound
Recommendations:
Our Vision:
To be one of the best ten companies in the construction projects in Egypt & Middle East.

Our Mission: To offer a wide range of construction projects of good design on
Is it represent how to achieve the vision? yes

Is it a clear mission? yes
Is it customer oriented? yes
Is it easy to remember? yes
Is it a SMART ?
Specific Yes It is specified as “international standards”
Applicable Yes It could be applicable (depends on the current situation)
Recommendations:
Our Mission:
To offer a wide range of construction projects of high quality on the international standards
at low cost
Our Values: Effectiveness, Efficiency, Integrity, Transparency, Reliability, Proactive
Clear and direct values

Fundamental beliefs
Guide for good behavior
Represent how people treat each other
Show the company culture
Easy to remember
Seven values (3 to 5)
Value Objective
Effectiveness Improve the customer satisfaction
Efficiency Improve the resource utilization
Integrity Improve the integration management between the different departments
Transparency Improve the work environment
Reliability Improve the quality levels for the different tasks
Proactive Improve the risk assessment for the different tasks
Recommendations:
Our Values:
Effectiveness, Efficiency, Integrity, Transparency, Proactive

Brainstorming, 1950:
Problem-solving Approach
• Brainstorming is useful for generating
innovative ideas topic.
• Brainstorming is some kind of sharing

information of some experts. Team size 9±3
Brainstorming Characteristics
and Rules:
Leader • Don’t interrupt colleagues.
• Don’t despise or criticize any idea.
Mind maps • All participants have the same
to arrange and develop ideas. opportunities and time to express their
ideas.
• Try to be creative and to find new
ideas.
"Never cut what you can untie”
© 1995 Corel Corp.
Brainstorming Session:
• Specific Topic
• Planned meeting (one hour per week)
• Employee participation:
– Employee performance is a critical quality variable
– The implementation of work teams and empowerment of employees to

build workplace involvement
• Quality circle:
– A group of employees who meet regularly to discuss quality-related

problems
• Don’t criticize or evaluate ideas (respect each other)
• Continuous improvement

Focus Groups:
– Provides opportunity to address
specific issues
– Provides opportunity for maximum

participation
A focus group can
– Provides maximum information in
establish great ideas &
short period of time management loves ideas

Goals, Strategic Objectives and Strategy
Goal – What do you want?
Broad statement of intention (long term outcome)
A goal typically leads to several objectives
Strategic Objective – How do you want it?

Specific statements that support the goal. (Medium term outcomes)
More focused and specific than goal
Strategy:
A strategy is a systematic method to achieve a certain objective
A strategy is a plan or method to achieve a certain objective

For Example: A Construction Company
Goal: Achieving High Quality and Low Cost Projects
Strategic
Strategy Main Activities
Objectives
Improve the Running advanced training program
customer Creating competitive advantage

satisfaction Creating new markets
production Analyzing the production system

capacity Developing the motivation program
resource Preparing the product resource files

utilization Developing the motivation program

SMART Objectives  Goals & Targets
Plan Your Road Map
Writing down your goals creates the

roadmap to your success.

Goals should be SMART
Specific Measurable Applicable
Reliable Timely

SMART Objectives
Targets = Medium Term (<= year) SMART Objectives

Goals = Long Term (> year) SMART Objectives
SMART  Main 5 Parameters
S = Specific
(Scope of Work, Bill of Quantity, Quality, Performance, Cost, Tech. Standard, etc.)
M = Measurable
(Certain value, range, parameters, indicators, Specs., etc.)
A = Applicable
(Achievable, Flexible, Most likely, Working condition etc.)
(should be customized)
R = Reliable
(Reference, Accuracy, Assurance, Trust, Risk assessment, Positive, Convince, etc.)
T = Time frame
(Certain duration: Week, Month, Annual, 2 years)
(Certain date: Start date, Finish date)
Goals:
A Goal is a long term objective
Goal is a long term action statement to change something.
• Increasing … • Increasing the market share
• Decreasing … • Decreasing the defect ratio
• Reducing … • Reducing the production cost
• Maintaining … • Maintaining the high-trust customer relationship
SMART Goals:

• Goals and Objectives Should Be SMARTER
– Specific Start with an action verb

– Measurable
– Acceptable
– Realistic
– Timeframe
– Extending
– Rewarding
• Continuous improvement:
Focuses on improving customer satisfaction through
continuous and incremental improvements to processes

Benchmarking
Best of the best Practice for
continuous improvement
A tool for identifying and measuring best practice

in order to improve performance
Benchmarking means learn from the best practice

Benchmarking
Best of the best
Practice
External
Benchmarking
Internal Goal
Benchmarking
Target Best Practices,

Processes &
Current
Products
“Until you take the first step, it will not be possible to see the next step”
What is Benchmarking?
A “benchmark” is a reference or measurement standard used for comparison
Management technique to improve business performance
Systematic search for best practices to improve the business performance.
Benchmarking is the process of measuring one business against a similar business (best
practice) for the purpose of improving the performance.
Sharing information between companies
• External Benchmarking
• Internal Benchmarking
‫ ورنك عُذيا تذأ انياتاَيىٌ تسيارج انعذيذ يٍ انشركاخ‬،‫كاَد انياتاٌ أول انثهذاٌ انتي طثقد يفهىو انًقارَح انًرجعيح‬
.‫ إر إستطاعىا إستيعاب يا َقهىِ يٍ انغرب يع يراعاج يا يُاسة ظروفهى‬،‫انغرتيح في تذايح انخًسيُياخ‬
Current Gap Benchmarking
Situation Analysis
What is Benchmarking?
• The process of comparing performance against others in
the same or similar industry to
– Confirm competitive position
– Gauge the opportunity for improvement
– Identify practices employed by best performers
Benchmarking  Target  Actual  Variance Analysis

Objective Levels:
Benchmarking
(Best of the best practice for continuous improvements
 Internal / External)
Vision / Policy
(Strategic Objectives  3 to 10 years)
Goals SMART:
(Long term  2 to 3 years) • Specific
• Measurable
• Applicable
• Reliable
Targets • Time frame
(Short term  month to year)
Performance Evaluation - (ISO 9001:2015 – Clause #9)
Key Performance Indicators (KPI)

(Balanced Scorecard)
Stephen Covey ‫ستيفن كوفي‬
KPIs as key decision-making tools

KPIs measure the performance of certain areas of a business.
Control = Monitor + Compare + Analysis + Corrective Action

Performance Indicators:
Balance Between:
Actual Target
Actual Target
Performance Performance
Actual Variance Analysis

Target
Continuous Improvement

Key Performance Indicators (KPIs) for each managerial level
Top Management
 Facility Managers Top
Middle Management Middle

 XX Managers
Operational Level
 XXX disciplines Operational
Work order Level

 XXXX Crews Site

Bad Normal Good Excellent
Key Performance Indicators (KPIs)
35
How to minimize this GAP?
30
25
GAP
20
15 Target
10 Actual
5
0
-5 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35
-10
-15
Months
1) Scope of Work: 2) Period: 3) Status Analysis
5) Actual Performance 6) Indicators 4) Target Performance

(Where you are?) (Where you want to be?)
7) GAP (+ / -)  (Graph)
KPIs must be SMART:
- Specific
8) Analysis (Strength / Weakness) - Measurable
One Page - Applicable
Management - Reliable
9) Improvement Recommendations
- Time Based
10) Improvement Plan
(Activity, Schedule, Budget, Responsibility)

What are key performance indicators?
1) Critical success
indicators
6) Continuous 2) Relevant to your

improvement strategies / goals
KPIs
5) Total view 3) Quantifiable
(integration) measurements
4) Readable &
standardized

Brainstorming; For examples:
Company Departments
Market & Sales Financial

….
Operation
…..
Company Maintenance
Planning
Safety
Human Resource
Procurement IT
Inventory

Market & Sales Department

Resources Outputs
Performance % Market Share
Labor Productivity Customer

KPIs Satisfaction
Lead Response Time Overdue %
Cost Variance Number of new

customers

Financial Department
Resources Outputs
Total cost Total revenue
Unit cost
KPIs Unit price
Cost Variance
Profit ratio
Inventory Turnover
Value added

Operation Department
Resources Outputs
Performance % Operation rate
Labor Productivity Unplanned %

KPIs
Material Utilization Overdue %
Cost Variance
Quality %

Maintenance Department
Resources Outputs
Customer
Performance % Satisfaction

KPIs
Cost Variance
Availability %

‫‪Safety & Health Department:‬‬
‫مؤشرات السالمة والصحة ‪Safety & Health Indicators‬‬

‫يؤشراخ انصحح ‪Health Indicators‬‬ ‫يؤشراخ انساليح ‪Safety Indicators‬‬
‫نسبة األمراض المزمنة‬ ‫لكل ‪ 1,000,000‬ساعة‬ ‫يعذل انحىادث‬

‫‪1‬‬ ‫(‪ ،C‬السكر‪ ،‬الضغط‪ ،‬القلب)‬ ‫(ساعة عامل)‬ ‫(حىادث أدخ إني إصاتاخ أو خسائر)‬
‫‪10‬‬ ‫نسبة األمراض المهنية‬ ‫يعذل شذج انحىادث‬

‫(الربو‪ ،‬السمع‪ ،‬النظر)‬ ‫(أجازاخ يرضيح)‬
‫‪30‬‬ ‫نسبة األمراض العادية‬ ‫‪KPIs‬‬ ‫يعذل اإلصاتاخ انجسيًح‬

‫(إصاتاخ وفاج أو عجس)‬ ‫‪1‬‬
‫متوسط تكاليف الرعاية الصحية‬ ‫مثال لحساب معدل الحوادث‪:‬‬ ‫يعذل اإلصاتاخ‬
‫(نصيب الفرد)‬ ‫‪ 100‬عامل‬
‫(إصاتاخ دخىل يستشفي)‬ ‫‪10‬‬
‫‪ 1500‬ساعة عمل سنوي للعامل‬
‫= ‪150,000‬ساعة عامل‬
‫معدل الكشف الدوري للعامل‬ ‫عدد الحوادث = ‪ 10‬حادثة‬
‫يعذل اإلسعافاخ األونيح‬
‫معدل الحوادث =‬
‫‪%‬‬ ‫‪(10/150000)*1000000‬‬ ‫(داخم انًىقع)‬ ‫‪30‬‬
‫= ‪ 66.7‬حادثة لكل مليون ساعة‬
‫‪PM‬‬ ‫‪Strategic Planning – Dr. Attia Gomaa - 2016‬‬ ‫‪45‬‬

Safety Department
Resources Outputs
Accident
Performance % Frequency Rate
Safety Training Accident

Hours
KPIs Severity Rate
Number of Safety Injury

Inspections Frequency Rate
Cost Variance Minor Injury

Frequency Rate

Safety Performance Indicators
Accidents Frequency Rate = (# Accidents) x 1,000,000
(Accident / 1,000,000 hours) Employee hours worked
Accidents Severity Rate = (# Total days lost) x 1,000,000

(Lost hours / 1,000,000 hours) Employee hours worked
Injury Frequency Rate = (# injuries) x 1,000,000

(Injury / 1,000,000 hours) Employee hours worked
Minor Injury Frequency Rate = (# minor injuries) x 1,000,000

(Minor Injury / 1,000,000 hours) Employee hours worked
(First aid = minor injury)
Near-miss Frequency Rate = (# Near-misses) x 1,000,000

(Near-miss / 1,000,000 hours) Employee hours worked
Case Study:
Safety Information (2014):
Average Number of Workers = 3000 man
Average Working Conditions = 2000 hour/year/man
Total Number of Accidents = 150 accidents
Total Number of Injuries = 240 injury
Total Lost Time Accidents = 600 man-day
Total Number of Minor Injuries= 900 injury
Total Number of Near-Miss = 1200 near-miss
Employee hours worked = 3000 man * 2000 hours = 6,000,000 man-hours
Accident Frequency Rate = (# Accidents) x 1,000,000 / Employee hours worked
= 150 *1000000 / 6,000,000 = 25 (Accident / 1,000,000 hours)
Injury Frequency Rate = (# Injuries) x 1,000,000 / Employee hours worked
= 240 *1000000 / 6,000,000 = 40 (Injury / 1,000,000 hours)
(Lost Time Injury = LTI = 40 )

IT Department
Resources Outputs
Customer
Performance % Satisfaction

KPIs
Cost Variance
Availability %

Inventory Department
Resources Outputs
KPIs

Procurement Department
Resources Outputs
KPIs

Human Resource Department

Resources Outputs
KPIs

For example;
Company Integration Management:
Financial Market
Process (Outputs)
Manpower
KPIs for each Discipline
KPI Report for Top Management

Strategic Objectives  (3 to 5) years
(Small vision statement for each discipline)
For example;
Financial Improve the Profitability
Market Grow the Market Share
Process Enhance the Process Efficiency
Manpower Develop the Workforce
“If you can’t measure it, you can’t manage it”; Peter Drucker
How to measure the strategic objectives?
Cause / Effect Relationship; for example
Profitability Sales Revenue

Financial
Market # of
Market Share Customers
Quality Performance
Process Rate Rate
Labor Safety
Manpower Productivity (Near-Miss Rate)

Calculations of KPIs; for example:
Perspective Key Indicators Equation Raw Data Responsibility
Revenue = Total Incomes

Financial
Department = (Revenue–Total Cost)/
Profit Ratio
Total cost
= Sales Quantity/ Standard Data Sheet 
Market Share
Market Market Quantity
Department # of Data Forms  Information
= Total Customers
Customers
= Net Quantity / Collection
Quality Rate
Process Total Quantity
Department Performance = Net Quantity /
Rate Total Working hours
Labor = Total Quantity/
Human Productivity man-hours
Resource
Department Near-Miss = Total Near-Miss /
Rate Actual working hours

KPIs Analysis; for example:
Actual Target
Perspective Key Indicators Unit Benchmark
2015 2016
Finance Sales Revenue M$ 70 80 100
Profitability % 21 24 30
Customer Market Share % 14 16 20
# Customer # 90 80 ≥ 100
Process Quality Rate % 95 94 ≥ 98
Performance Rate U/h 85 80 100
Manpower Labor Productivity U/m-h 7 8 10
Near-Miss Rate # 14 15 ≤ 12

Actual Target Benchmark

Indicator
Perspective Key Indicators Unit 2015 2016
Evaluation
(x/10) (8/10) (10/10)
Finance Sales Revenue M$ 70 80 100 (7/10)
Profitability % 21 24 30 (7/10)
Customer Market Share % 14 16 20 (7/10)
# Customer # 90 80 ≥ 100 (9/10)
Process Quality Rate % 95 94 ≥ 98 (8.5/10)
Performance Rate U/h 85 80 100 (8.5/10)
Manpower Labor Productivity U/m-h 7 8 10 (7/10)
Near-Miss Rate # 14 15 ≤ 12 (8.5/10)

Star Diagram Revenue
Benchmarking Profitability
Target
# Near-Miss
Market
Share
Actual
#
Labor
Customer
Productivity
Performance Rate Quality Rate
Company Index = Current Area / Benchmark Area ≈ 50%

KPIs Report; for example:
Above At Below Far Below

Perspective Key Indicators
Target Target Target Target
Finance Sales Revenue X
Profitability X
Customer Market Share X
# Customer X
Process Quality Rate X
Performance Rate X
Manpower Labor Productivity X
Near-Miss Rate X

For example:
KPIs Report
Sales Revenue Market %
Unit Cost Labor Productivity
Recommendations:
•
•
•

For example:
KPIs Report
KPI A B C
Recommendations:
•
•
•

Case Study: The production information for cast iron manufacturing is as follows:
Department Item Unit Actual 2014 Actual 2015
Sales Sales Quantity ton 350 380

Department
Unit Price LE/ton 4857 5000
Net Production Quantity Tons 310 330

Process
Production Material Weight Tons 510 560
Department
Production Time hour 300 320
Financial Unit Material Cost LE/ton 1930 1939

Department
Unit Cost LE/ton 3967 4000
Targets (Benchmarking or planned ) KPIs:
Indicator Equation Unit Targets
Profit Ratio (Unit Price – Unit Cost) / Unit Cost % 20 to 30
Value Added Factor Unit Price / Unit Material Cost Factor 2.4 to 2.6
Production Rate Net Production Quantity / Production Time Ton/hr 1.1 to 1.2
Material Yield Net Production Weight / Production Material Weight % 70 to 80

Based on this information, discuss the key performance indicators & improvement recommendations.
Actual Actual Bench
Item Unit
2014 2015 marking
Profit Ratio % 22% 25% 20 30%
Value Added Factor Factor 2.51 2.57 2.40 2.60
Production Rate Ton/hour 1.033 1.031 1.100 1.200
Material Yield % 60.7 58.9 70.0 80.0
Profit Ratio 10 8.4 9 8 10
Value Added Factor 10 9.1 9.7 8 10
Production Rate 10 6.66 6.62 8 10
Material Yield 10 6.14 5.78 8 10
Profit Ratio Value added Production Rate Material Yield
Actual 30 10 2.6 10 1.2 10 80 10
2015 25 x= 9 2.57 x=9.7 1.1 8 70 8
20 8 2.4 8 1.031 x=6.62 58.9 x= 5.78
Profit Ratio Value added Production Rate Material Yield

Actual 30 10 2.6 10 1.2 10 80 10
2014 22 x= 8.4 2.51 x=9.1 1.1 8 70 8
20 8 2.4 8 1.033 x=6.66 60.7 x=6.14

1) Profit Ratio 10 Actual 2015
Actual 2014
4) Material 2) Value
Yield Added
0
10 8 8 10
10
3) Production Rate
Current Situation Analysis
Company: xxxx Product: yyyy
Main Indicators (2015):

Sales quantity: 380 ton Unit Price : 5,000 LE/ton Profit Ratio: 25 %
Losses - Weakness Points:

-- %
Total 1 - Production Rate (1.031 <1.10)
Performance--- 2- Material Yield (58.9 < 70%)
%
Recommendations:
• To increase the production rate ; reduce the
Strength Points: time losses
• To improve the material yield; reduce the
1 - Profit ratio (25 > 20%)
material scrape
2 – Value Added (2.57 > 2.4 %) •To improve the overall performance, achieve
motivation programs

Department Item Unit Actual 2014 Actual 2015
Market Plan ton 450 450
Sales
Sales Quantity ton 400 420
Department

Process
Department
Average Labors Man 10 14
Financial Total Material Cost 1000 LE 600 800

Department Total Cost 1000 LE 1300 1700
Targets (Benchmarking or planned ) KPIs:
Indicator Equation Unit Targets
Sales Revenue Unit Price* Sales Quantity M.LE 1.9 to 2.1
Market Ratio Sales Quantity / Market Plan % 85 to 95
Unit Cost Total Cost / Net Production Quantity LE / unit 3800 to 3500
Labor Productivity Net Production Quantity / Average Labor Ton / man 34 to 36

Based on this information, discuss the key performance indicators & improvement recommendations.
Actual 2014 Sales Revenue 10
Labor
Productivity Market Ratio
10 8 8 10
10
Unit Cost
Benchmarking KPIs or Targets: Sacle A2014 Scale (10) Evaluation
Sales Revenue (1.9 to 2.1) M.LE 8-10 2.0 9 +
Market Ratio (85 to 95) % 8-10 88.9 8.8 +
Unit Cost (3800 to 3500) LE/unit 8-10 3939 6.8 -
Labor Productivity (34 to 36) ton/man 8-10 33 7.0 -

Actual 2015 Sales Revenue 10
Labor
Productivity Market Ratio
10 8 8 10
10
Unit Cost
Benchmarking KPIs or Targets: Sacle A2015 Scale (10) Evaluation
Sales Revenue (1.9 to 2.1) M.LE 8-10
Market Ratio (85 to 95) % 8-10
Unit Cost (3800 to 3500) LE/unit 8-10
Labor Productivity (34 to 36) ton/man 8-10


Sales quantity: 420 ton Unit Price : 5,100 LE/ton Profit Ratio: -- %

-- %
Total •
Performance--- •
%
•
Recommendations:
Strength Points: •
•
• •
• •
•
What is the balanced scorecard?
An Integrated Approach to Performance Management
Developed by Dr. Robert Kaplan and David Norton in 1992.

Improvement Plan; for example
Company Description: Spare Parts Manufacturing
Products Description: Product #1: XXXXXX Product #2: YYYYYYYY
Main Objectives: Improve the customer satisfaction

Main Outcomes: Improve the market share
Strategic Objectives:
Strategy Measurement
Perspective Targets Main Activities
(Objectives) (Indicators)
- Increase the revenue Revenue 5% +/yr - Market Motivation program
Financial - Increase the profit 5% +/yr
Profitability - Cost Reduction program
- More Customers # Customers 5% +/yr - Customer Relationship
Market Offer Hit Rate 5% +/yr - Quality management
- Improve Production Performance 5 % +/yr - Lean Six sigma program
Process Rate Rate 5% +/yr
Quality Rate
- Improve Manpower % Labor 5% +/yr - Training program / Plan
Manpower skills productivity - Motivation Policy
Update the strategic Plan Action Plan

for the Next Period for the Next Period
Company Integration Management:
Financial
Process Procurement
Market
KPIs for each Discipline
KPI Report for Top Management

Strategic Objectives  (3 to 5) years
(Small vision statement for each discipline)
For example;
Finance Improve the Profitability
Customer /
Grow the Market Share
Market
Process Enhance the Process Efficiency
Manpower Develop the Workforce
“If you can’t measure it, you can’t manage it”; Peter Drucker
How to measure the strategic objectives?
Cause / Effect Relationship; for example
Profitability Sales Revenue

Finance
Market #
Customer
Share Customer
Quality Performance
Process Rate Rate
Labor #
Manpower ``
Productivity Near-Miss

Calculations of KPIs
Perspective Key Indicators Equation Data Responsibility
Revenue = Total Incomes

Financial
Department = (Revenue–Total Cost)/
Profit Ratio
Total cost
= Sales Quantity/
Market Share
Market Market Quantity
Department
# Customer = Total Customers
= Net Quantity /
Quality Rate
Process Total Quantity
Department Performance = Net Quantity /
Rate Total Working hours
Labor = Total Quantity/
Human Productivity man-hours
Resource
Department Near-Miss = Total Near-Miss /
Rate Actual working hours
PM Standard DataStrategic
Sheet  Data Forms  Information Collection
Planning – Dr. Attia Gomaa - 2016 76
Actual Target
Perspective Key Indicators Unit Benchmark
2015 2016
Finance Sales Revenue M$ 70 80 100
Profitability % 21 24 30
Customer Market Share % 14 16 20
# Customer # 90 80 ≥ 100
Process Quality Rate % 95 94 ≥ 98
Performance Rate U/h 85 80 100
Manpower Labor Productivity U/m-h 7 8 10
# Near-Miss # 14 15 ≤ 12

Actual Target Benchmark

Indicator
Perspective Key Indicators Unit 2015 2016
Evaluation
(x/10) (8/10) (10/10)
Finance Sales Revenue M$ 70 80 100 (7/10)
Profitability % 21 24 30 (7/10)
Customer Market Share % 14 16 20 (7/10)
# Customer # 90 80 ≥ 100 (9/10)
Process Quality Rate % 95 94 ≥ 98 (8.5/10)
Performance Rate U/h 85 80 100 (8.5/10)
Manpower Labor Productivity U/m-h 7 8 10 (7/10)
# Near-Miss # 14 15 ≤ 12 (8.5/10)

Star Diagram Revenue
Benchmarking Profitability
Target
# Near-Miss Actual Market
Share
#
Labor
Customer
Productivity
Performance Rate Quality Rate

Above At Below Far Below

Perspective Key Indicators
Target Target Target Target
Finance Sales Revenue X
Profitability X
Customer Market Share X
# Customer X
Process Quality Rate X
Performance Rate X
Manpower Labor Productivity X
# Near-Miss X

Actual Actual
Department Item Unit
2014 2015
Sales Sales Quantity ton 350 380

Department

Process
Department
Financial Unit Material Cost LE/ton 1930 1939

Department
Unit Cost LE/ton 3967 4000
Benchmarking (Competitors KPIs):

Profit Ratio = (Unit Price – Unit Cost)/Unit Cost (20 to 30)%
Value Added Factor = Unit Price / Unit Material Cost (2.4 to 2.6)
Production Rate = Net Production Quantity / Production Time (1.1 to 1.2) ton/hr
Material Yield = Net Production Weight / Production Material Weight (70 to 80) %
Based on this information, discuss the Key Performance Indicators, Star Diagram & Improvement
recommendations for this company
Actual Actual Performa Bench
Item Unit
2014 2015 nce marking
Profit Ratio % 22% 25% Within (+) 20 30%
Value Added Factor Factor 2.51 2.57 Within (+) 2.40 2.60
Production Rate Ton/hour 1.033 1.031 Below (-) 1.100 1.200
Material Yield % 60.7 58.9 Below (-) 70.0 80.0
Profit Ratio 10 8.4 9 8 10
Value Added Factor 10 9.1 9.7 8 10
Production Rate 10 6.66 6.62 8 10
Material Yield 10 6.14 5.78 8 10
Profit Ratio: Value added: Production Rate: Material Yield:
Actual 30 10 2.6 10 1.2 10 80 10
2015 25 x= 9 2.57 x=9.7 1.1 8 70 8
20 8 2.4 8 1.031 x=6.62 58.9 x= 5.78
Profit Ratio: Value added: Production Rate Material Yield:

Actual 30 10 2.6 10 1.2 10 80 10
2014 22 x= 8.4 2.51 x=9.1 1.1 8 70 8
20 8 2.4 8 1.033 x=6.66 60.7 x=6.14

Profit Ratio 10 Actual 2015
Actual 2014
Material Value
Yield Added
10 8 8 10
10 Production Rate

sales quantity: 380 ton Unit Price : 5,000 LE/ton Profit Ratio: 25 %
Weakness Points:
Losses - 1 - Production Rate (1.031 <1.10)
-- %
Total 2- Material Yield (58.9 < 70%)
Performance---
%
Recommendations:
time losses
Strength Points: • To improve the material yield; reduce the
material scrape
1 - Profit ratio (25 > 20%) •To improve the overall performance, achieve
motivation programs
2 – Value Added (2.57 > 2.4 %)
• To improve the overall performance; run
advanced training programs

Actual Actual
Department Item Unit
2014 2015
Sales Quantity ton 350 380
Sales
Sales Revenue 1000 LE 1700 1900
Department
Overdue Quantity ton 35 40
Standard Production Rate ton/hour 1.2 1.2
Process Total Production Quantity ton 311 332
Department Production Defect (Rejected) ton 1 2
Production Material Cost 1000 LE 600 640
Financial Processing Cost 1000 LE 330 340
Department Technical Overhead Cost 1000 LE 200 240
Office Overhead Cost 1000 LE 100 100
Inventory Production Materials ton 510 560
Department Average Inventory Value 1000 LE 310 320
Benchmarking (Competitors KPIs):
Profit Ratio = (Unit Price – Unit Cost)/Unit Cost (20 to 30)%
Value Added Factor = Unit Price / Unit Material Cost (2.4 to 2.6)
Production Rate = Net Production Quantity / Production Time (1.1 to 1.2) ton/hr
Material Yield = Net Production Weight / Production Material Weight (70 to 80) %
Based on this information, discuss the Key Performance Indicators, Star Diagram & Improvement
recommendations for this company
Actual Actual Bench
Item Unit
2014 2015 marking
Unit Price = LE/ton 4857 5000
Sales Revenue/Sales Quantity
Unit Cost= LE/ton 3967 4000
Information
Total Production Cost / Net Production Quantity

Unit Material Cost = LE/ton 1930 1939
Production Material Cost/ Net Production
Quantity
Production Time Hours 300 320
Net Production Weight Tons 310 330
Profit Ratio % 22% 25% 20 to +

= (Unit Price–Unit Cost)/Unit Cost 30%
Value Added Factor Factor 2.51 2.57 2.4 to +
= Unit Price / Unit Material Cost 2.6
KPIS Production Rate Ton/hour 1.033 1.031 1.1 to
= Net Production Quantity / Production Time 1.2
-
Material Yield % 60.7 58.9 70 to -
= Net Production Weight / Production Material Weight 80%

Profit Ratio 10 Actual 2015
Actual 2014
Material Value
Yield Added
10 8 8 10
10 Production Rate

sales quantity: 380 ton Unit Price : 5,000 LE/ton Profit Ratio: 25 %

-- %
Total 1 - Production Rate (1.031 <1.10)
Performance--- 2- Material Yield (58.9 < 70%)
%
Recommendations:
Strength Points: time losses
• To improve the material yield; reduce the
1 - Profit ratio (25 > 20%)
material scrape
2 – Value Added (2.57 > 2.4 %) •To improve the overall performance, achieve
motivation programs

Case Study:
Company Description: ABC Manufacturing
Products Description: Product #1: XXXXXX Product #2: YYYYYYYY
Process Description:
Mat. #1 WIP2 Product #1
WIP1
Mat. #2 Process #1 Process #2 Process #3 Product #2
Mat. #3 …..
Product Code Unit PRD1 PRD2 ….

Financial Annual sales quantity Unit 15,000 10,000
Information: Average Unit Cost $/unit 48 62
Average Unit Price $/unit 55 72
Market Information:
Annual Sales Quantity = 25,000 unit (15,000 Prod. #1 & 10,000 Prod. #2)
Total Number of offers = 300 offer Number of work orders= 75 w/o
Number of Customers = 50 Number of Claims = 5 claims (major)
Process Information:
Annual Production Quantity = 29,000 unit Number of Defects = 800 unit
Actual Working Hours= 1,800 hr/year Total Labor Effort = 24,000 man-hour
Inventory Information:
Item Code MAT1 MAT2 MAT3 WIP1 WIP2 PRD1 PRD2
Average Level; unit 15000 2500 3000 5000 4000 2000 1000
Average Unit Value; $ 3 5 1 14 18 48 62
Procurement Information:
Material Type MAT1 MAT2 MAT3
Supplier Code SR01 SR01 SR02
Annual Material Quantities; units 60000 11000 12000
Annual Material Defects; units 4500 800 1100
Overdue Quantities; units 10000 1000 900
Benchmarking (KPIs):
Financial  • Profit Ratio (20 to 30) %TC • Inventory Turnover (5 to 6) turn
Market  • Offer Hit Rate (40 to 50) % • Claim Ratio (5 to 10)%
Process  • Production Rate (15 to 20) unit/hr • Defect Ratio (2 to 4)%
Supplier  • Delivery Reliability ( 92 to 96) % • Material Quality Rate (92 to 95)%
Based on this information, discuss the Key Performance Indicators, Star Diagram
& Improvement recommendations for this company
Targets KPIs  Benchmarking:
1- Financial Analysis: 2- Market Analysis
1-1- Profit Ratio (20 to 30) %TC 2-1- Offer Hit Rate (40 to 50) %
1-2- Inventory Turnover (5 to 6) turn 2-2- Claim Ratio (5 to 10)%
3- Process Analysis: 4- Supplier Analysis:

3-1- Production Rate (15 to 20) unit/hr 4-1- Delivery Reliability ( 92 to 96) %
3-2- Defect Ratio (2 to 4)% 4-2- Mat. Quality Rate (92 to 95)%

1- Financial Analysis 1-1- Profit Ratio Analysis
Product #1:
Annual sales quantity = 15,000 Unit Av. Unit Cost= 48 $/unit Av. Price = 55 $/unit
Annual Cost of Sales For Product #1 = 15000*48 = $ 720,000

Annual Sales Revenue For Product #1 = 15000*55 = $ 825,000
Profit Ratio For Product #1 = (55-48)/48 = 14.5% < 20% It is very low
Product #2:
Annual sales quantity = 10,000 Unit Av. Unit Cost= 62 $/unit Av. Price = 72 $/unit
Annual Cost of Sales For Product #2 = 10000*62 = $ 620,000

Annual Sales Revenue For Product #2 = 10000*72 = $ 720,000
Profit Ratio For Product #2= (72-62)/62 = 16.1% < 20% It is very low
Total:
Annual Cost of Sales = 15000*48 + 10000*62 = $1,340,000
Annual Sales Revenue = 825000 + 720000 = 1,545,000
Profit Ratio = (1545000 – 1340000)/1340000 = 15.3 % < 20% It is very low
Comments:

1- Financial Analysis 1-2- Inventory Turnover Analysis
Item Number Average Level Unit Value Total Value

1 – MAT1 15,000  $ 3.00 = $ 45,000
2 – MAT2 2,500  5.00 = 12,500
3 – MAT3 3,000  1.00 = 3,000
4 – WIP1 5,000  14.00 = 70,000
5 – WIP2 4,000  18.00 = 72,000
6 – PRD1 2,000  48.00 = 96,000
7 – PRD2 1,000  62.00 = 62,000
Average aggregate inventory value = $360,500
Annual Cost of Sales

Inventory Turnover =
Average Inventory Value
$1,340,000
= = 3.72 turns < 5 It is very low
$360,500

2- Market Analysis:
Annual Sales Quantity = 25,000 unit (15,000 Prod. #1 & 10,000 Prod. #2)
Total Number of offers = 300 offer Number of work orders= 75 w/o
Number of Customers = 50 Number of Claims = 5 claims (major)
2-1- Offer Hit Rate = Number of work orders / Total number of offers
= 75 / 300 = 25 % < 40% It is very low
2-2- Claim Ratio = Number of claims / Number of work orders

= 5 / 75 = 6.6% with range (5 to 10)% , Good performance
3- Process Analysis:
Annual Production Quantity = 29,000 unit Number of Defects = 800 unit
Actual Working Hours= 1,800 hr/year Total Labor Effort = 24,000 man-hour
3-1- Production Rate = Production quantity / Actual working hours

= 29,000 / 1,800 = 16.11 unit/hour within range (15 to 20), Good performance
3-2- Defect Ratio = Number of defects / (Net Production quantity + Number of defects)
= 800 / (29000+800) = 2.68 % within range (2 to 4)%, Good performance

4- Procurement Analysis:
Material Type M#1 M#2 M#3
Supplier Code SR01 SR01 SR02
Annual material quantities 60000 11000 12000
Annual material Defects 4500 800 1100
Overdue Quantities 10000 1000 900
4-1- Delivery Reliability = (Annual quantity – Overdue quantity) / Annual quantity

For M#1 = (60000 – 10000)/60000 = 83% < 92 %, Very low performance
For M#2 = (11000 – 1000)/11000 = 90.9% < 92 %, Low performance
For SR01= (71000 – 11000)/71000 = 84.5 % < 92 %, Very low performance
For M#3 = (12000 – 900)/12000 = 92.5% within range ( 92 to 96) %, Good performance
Total = (83000 – 11900) / 83000 = 85.6 % < 92, Very low performance
4-2- Materials Quality Rate = (Annual quantity – Defect quantity) / Annual quantity
For M#1 = (60000 – 4500)/60000 = 92.5 % within range ( 92 to 95) %, Good performance
For M#2 = (11000 – 800)/11000 = 92.7% within range ( 92 to 95) %, Good performance
For SR01= (71000 – 5300)/71000 = 92.5 % within range ( 92 to 95) %, Good performance
For M#3 = (12000 – 1100)/12000 = 90.8% < 92 %, Low performance
Total = (83000 – 6400) / 83000 = 92.3 % > 92, within range, Good performance

Benchmarking & Gap Analysis, for example:
Perspective KPI Unit Current Benchmark Gap Comment
2012 %
Profit Ratio % 15.3 20 to 30 4.7 % Low
Finance Inventory Turn 3.72 5 to 6 1.3 Low
Turnover turn
Offer Hit Rate % 25 40 to 50 15 % Low
Market
Claim Ratio % 6.6 5 to 10 Within Good
Production Rate Unit/hr 16.11 15 to 20 Within Good
Process
Defect Ratio % 2.68 2 to 4 Within Good
Delivery Reliability % 85.6 92 to 96 6.4 Low
Procurement
Mat. Quality Rate % 92.3 92 to 95 Within Good
Comments:

Star Diagram Profit Ratio Inventory
Turnover
Mat. Quality
Offer Hit
Rate
Rate
Claim
Delivery Ratio
Reliability
Defect Ratio Production Rate

Main Indicators:
sales quantity: 25000 unit Sales Revenue: $ 1,545,000 Profit Ratio: 15.3 %
Weakness Points:
Losses - 1 - Profit ratio (15.3 < 20%)
-- %
2 - Inventory turnover (3.7<5)
Total
Performance--- 3- Offer hit rate (25 < 40%)
%
4- Delivery Reliability (85.6 < 92%)
Recommendations:
Strength Points: • To increase the profit ratio, reduce the
production cost
1 - Claim ratio (6.7% < 10) • To improve the inventory turnover, reduce the
inventory levels
2 - Production Rate (16.11>15) • To increase the offer hit rate, improve the
3 - Defect Ratio (2.68 <4 %) technical study skills & increase the product
awareness
4- Mat. Quality Rate (92.3>92%) • To improve the delivery reliability, achieve
supplier evaluation & motivation program
Key Performance Indicators (KPIs): Controlling
Planning
Not all indicators are equally important
Goal
KPIs are systematic indicators to measure and evaluate a certain
KPIs
goal or objective. Should be:
Metrics
1. Customized according to the types of business and field
Information
2. Support the decision making process (managerial level)
Data
3. Driven by business goals or objectives
4. Proactive “leading & lagging indicators (focus on +/- points)”
In summary; if we
5. Integrated indicators (total view) have good KPIs we
6. Focus on the critical (3 to 8 indicators) will keep our goals
7. Standard units (ratio, rate, average, … ) on track
8. SMART (Specific, Measurable, A , R , Time-based)
9. Looked at over time (frequency: monthly, quarter, annual)
10. Each indicator has a reference or target value to compare
Brainstorming:
Company: Department: Quality Management
Goal: Achieving high quality projects at low cost
KPIs:

Strategic Direction:
Future Attitudes and Reason for
intent policies existence
Vision Values Mission
Goals & Strategic Objectives •Surveys

•Questionnaires
•Focus Groups
Analysis (Environmental assessment)
SWOT Analysis:
Positive (Beneficial) Negative (Harmful)
Strengths Weaknesses
Internal
Opportunities Threats
External
DIRECTION
SWOT Analysis (Strengths – Weaknesses – Opportunities - Threats)
Internal Assessment:
Organizational assets, resources, people,
quality, culture, systems, suppliers, . . .
External Assessment:
Marketplace, competitors, social trends,
technology, economic cycles, …
•Strengths can be: Very high quality, Good leadership, high skilled workforce, excellent financial
condition, …
•Weaknesses include: Bad leadership, unskilled workforce, insufficient resources, poor product
quality, lack of planning, . . .
•Opportunities can be: Good market location. better economic conditions, good customer
relationship, more open trading policies, . .
•Threats include: New technology, strong competitors, luck of suppliers, new regulations, . . .

Company: ABC Steel Company SWOT Matrix

Internal
S1. High product quality W1. High overhead cost
S2: Advanced training plan W2: High employee turnover
External
O1. New & online markets T1. Strong competitors
O2: High customer satisfaction T2. Unstable market price

SWOT Analysis:
Factors Department
S1. High product quality Process

Strengths
S2: Advanced training plan HR
W1. High overhead cost Financial

Weaknesses
W2: High employee turnover HR
O1. New & online markets Market

Opportunities
O2: High customer satisfaction Market
T1. Strong competitors Market

Threats
T2. Unstable market price Market
SWOT Analysis
Item Strengths Weaknesses Item Strengths Weaknesses
Product quality High Low Budget
Customer service Good Weak Supply Chain Good Weak
Product lead time Area Sufficient Insufficient
Product Price Location
Know-how Infrastructure
Information Complete Incomplete Assets
Communication Staff Culture
Managers Qualified Not qualified Lead Time
Coordination Capacity
Staff Qualified Unskilled Utilization
Staff culture New
Technology
Planning
Leader &
Resources Sufficient Insufficient Team Work
Product Cost
Overhead Low High

SWOT Analysis
Item Opportunities Threats Item Opportunities Threats
Market Price Stable Unstable Economic Strong Weak
Conditions
Market Price High Low
Location
Market Share
Head Hunter
Markets New
Organization
Market Online Structure
Brand name Strong Weak
Reputation Good Poor
Competitors Strong
Customer
culture
Customer needs High Low
Currency Stable Unstable
Technology New
Suppliers Availability
Trading Policies More open

Brainstorming: Select the best response.
1- Which of the following is considered as strength points in SWOT analysis?
A. bad process quality B. lack of customers
C. good layout D. strong competitors
2- Which of the following is considered as weakness points in SWOT analysis?

A. high process quality B. unskilled labor
C. good leaders D. strong competitors
3- Which of the following is considered as opportunities points in SWOT analysis?

A. high process quality B. unskilled labor
C. good leaders D. good location
4- Which of the following is considered as threats points in SWOT analysis?

A. no quality system B. lack of information
C. good experience D. strong competitors

A. high defect ratio B. material availability
C. good safety D. strong competitors

A. high machining cost B. low material cost
C. good supplier relationship D. strong competitors

A. high process quality B. good labor experiences
C. good leaders D. good customer relationship

A. no safety awareness B. lack of suppliers
C. low labor experience D. strong leaders
9. In SWOT analysis; good market location is considered as:

A. strength points B. weakness points
C. opportunities points D. threats points
10. In SWOT analysis; internet as a market tool is considered as:

11. In SWOT analysis; a poor weather is considered as:

12. In SWOT analysis; growing market is considered as:


13. In SWOT analysis; customer loyalty is considered as:
14. In SWOT analysis; strong brand name of competitors is considered as:

15. In SWOT analysis; strong relationship with customers is considered as:

16. In SWOT analysis; strong relationship with suppliers is considered as:

17. In SWOT analysis; strong relationship with labors is considered as:

18. In SWOT analysis; incomplete production information is considered as:


SWOT Analysis – Integration is key
SWOTs need Integrating

Project SWOT Analysis – Integration is key
SWOTs need Integrating

SWOT Interactions

TOWS Analysis: Matching Stage
Develop four types of strategies:

‫‪TOWS Analysis:‬‬ ‫)‪(Strategy Formulation‬‬ ‫االستراتيجيات البديلة‬
‫‪Business Mission & Strategic Objectives‬‬
‫‪Strengths‬‬ ‫‪Weaknesses‬‬
‫‪Opportunities‬‬
‫‪SO – Strategy‬‬ ‫‪WO – Strategy‬‬

‫استراتيجيت انتوسع واننمو‬ ‫استراتيجيت انتطوير وانتحسين‬
‫كيفيت تطوير جوانب انقوة‬ ‫كيفيت تقهيم جوانب انضعف‬

‫تاستغالل انفرص انًتاحح‬ ‫تئستغالل انفرص انًتاحح‬
‫‪ST – Strategy‬‬ ‫‪WT – Strategy‬‬

‫‪Threats‬‬
‫استراتيجيت انثباث واالستقرار‬ ‫استراتيجيت االنكماش وانتقهيم‬
‫كيفيت إستغالل جوانب انقوة‬ ‫كيفيت تقهيم بعض األنشطت انضعيفت‬

‫نًىاجهح انتهذيذاخ انًؤثرج‬ ‫نًىاجهح انتهذيذاخ انًؤثرج‬

Internal
External
O1. New & online markets T1. Strong competitors
O2: High customer satisfaction T2. Unstable market price

SWOT Analysis:
Factors Department
S1. High product quality Process

Strengths
S2: Advanced training plan HR
W1. High overhead cost Financial

Weaknesses
W2: High employee turnover HR
O1. New & online markets Market

Opportunities
O2: High customer satisfaction Market
T1. Strong competitors Market

Threats
T2. Unstable market price Market
TOWS Analysis: (Strategy Formulation) ‫االستراتيجيات البديلة‬
Opportunities SO – Strategy WO – Strategy

O1. New & online ‫استراتيجيت انتوسع واننمو‬ ‫استراتيجيت انتطوير وانتحسين‬
markets
O2: High customer ‫كيفيت تطوير جوانب انقوة‬ ‫كيفيت تقهيم جوانب انضعف‬
satisfaction ‫تاستغالل انفرص انًتاحح‬ ‫تئستغالل انفرص انًتاحح‬
Threats ST – Strategy WT – Strategy
T1. Strong ‫استراتيجيت انثباث واالستقرار‬ ‫استراتيجيت االنكماش‬
competitors
T2. Unstable ‫كيفيت إستغالل جوانب انقوة‬ ‫كيفيت تقهيم بعض األنشطت انضعيفت‬
market price ‫نًىاجهح انتهذيذاخ انًؤثرج‬ ‫نًىاجهح انتهذيذاخ انًؤثرج‬

Strengths
S1. High product quality
S2: Advanced training plan

Opportunities SO – Strategy
O1. New & online markets • Enhancing the customer service
O2: High customer satisfaction • Improving the customer satisfaction

• Creating competitive advantage
• Creating new market
• Developing the current products
• Creating new product
• Improving market share

Weaknesses
W1. High overhead cost
W2: High employee turnover

Opportunities WO – Strategy
O1. New & online markets • Using new motivation programs
O2: High customer satisfaction • Improving the process efficiency

• Improving the resource utilization
• Reducing the overhead cost
• Reducing the production cost
• Reducing the product price
• Reducing the employee turnover

Strengths

Threats ST – Strategy
T1. Strong competitors • Maintaining the high quality
T2. Unstable market price • Improving the market study

• Achieving the quality function deployment
• Developing the current products
• Creating new product
• Planning risk assessment for market price
• Improving the supply chain management
Weaknesses
Threats WT – Strategy
T1. Strong competitors • Using new motivation programs
T2. Unstable market price • Improving the staff efficiency

• Improving the resource utilization
• Improving the working conditions
• Analyzing the competition parameters
• Developing a benchmarking
• Planning risk assessment for market price
• Improving the organization structure
• Reducing the employee turnover
TOWS Analysis: (Strategy Formulation)
S1. High quality W1. High overhead
S2. Good R & D W2. Old equipment
S3. Good marketing W3. High energy consumption
O1. Market is growing • Improve the customer satisfaction • Improve the R&D activities
• Maintain the high quality • Upgrade the old equipment
O2. Online market • Improve the market survey • Improve the production capacity
O3. Economic conditions • Develop the product features • Reduce the production cost
• Develop new products • Improve the labor skills
• Increase the market share • Improve the online marketing
• Create new markets •
• Improve the advertizing •
T1. Strong competitors •Improve the resource utilization • Improve the energy consumption
• Identify the competition points rates
T2. Energy cost • Develop the benchmarking • Improve the maintenance plan
T3. Market price • Create competitive advantages • Use green energy policy
• • Improve the motivation program
Top Priories
Case Study: A Manufacturing Company in Egypt
Strategic Strategy
Action Plan
Objectives (Main actions to achieve a certain objective)
1. Running advanced training programs
Improve the
2. Developing the motivation programs
customer
3. Creating competitive advantages
satisfaction
4. Creating new markets
Improve the 1. Running advanced training programs For each action:
energy 2. Developing the motivation programs Activities?
consumption 3. Analyzing the production systems How?
rates 4. Upgrading the old equipment Period?
1. Running advanced training programs Budget?
Improve the Indicators?
2. Developing the motivation programs
resource Responsibility?
3. Preparing the product resource files
utilization Priority?
4. Reducing the production costs
1. Running advanced training programs
Improve the 2. Developing the motivation programs
R&D activities 3. Developing the current products
4. Creating new products

Action Plans:
• Specify steps or actions required to attain an objective.
• Designate who will be held accountable for seeing the each

step or action is completed.
• Define when these steps or actions will be carried out.
• Define resources needed to be allocated in order to carry out

the required steps or actions.
• Define feedback mechanisms needed to monitor progress

within each action step.

Action Plan:
What? When? How?

Strategic Planned Planned Resp.
Strategies Activities Duration Budget Priorities
Objectives Start Finish Eng.
Running advanced
training programs
Developing the
motivation
Improve the programs
customer
satisfaction Creating
competitive
advantages
Creating new
markets
Improve the
energy
consumption
rates

Priorities:
 Important matrix:
Urgent Not urgent

(due soon) (not due soon)
Important
1 3
Not important
2 4
Case Study: McDonald's
McDonald's® Brand vision is "To be the best quick service restaurant experience".
Being the best means providing outstanding quality, service, cleanliness, and value, so
that we make every customer in every restaurant smile.
And our brand mission "Is to be our customer's first choice, when it comes to, top
quality products, outstanding service / cleanness and great value for money ".

Case Study: McDonald's, 2007 SWOT Analysis
S1. Brand name W1. Sales are down
Internal
S2. Marketing success W2. Stock price is down

S3. Breakfast market share W3. Unhealthy menu
S4. Best coffee taste
External
O1. Connoisseur coffee T1. High Competition in burgers

O2. Market is growing T2. Coffee outlets
O3. Bargain menu is seeking T3. Healthier fast-foods alternatives
O4. High-end burgers
Which are the strategies (SO, ST, WO, and WT)?
Which is more effective SO, ST, WO, or WT?

Strategic Strategy Action Plan
Case Study: McDonald's, 2007 TOWS Analysis (Strategy Formulation)
(Use strengths to take advantage (Overcome weaknesses by taking
O1. Connoisseur coffee of opportunities) advantage of opportunities)
O2. Market is growing
1. 1.
O3. Bargain menu is seeking 2. 2.
O4. High-end burgers 3. 3.
(Use strengths to avoid threats) (Minimize weaknesses and avoid
T1. High Competition in burgers threats)
T2. Coffee outlets 1. 1.
2. 2.
T3. Healthier fast-foods alternatives 3. 3.

Case Study: McDonald's, 2007 TOWS Analysis (Strategy Formulation)
(Use strengths to take advantage (Overcome weaknesses by taking
O1. Connoisseur coffee of opportunities) advantage of opportunities)
O2. Market is growing
1. Reducing the premium coffee 1. Pushing the premium coffee
O3. Bargain menu is seeking costs sales
O4. High-end burgers 2. Improving the advertising 2.
program
(Use strengths to avoid threats) (Minimize weaknesses and avoid
T1. High Competition in burgers threats)
T2. Coffee outlets 1. Developing the current 1. Compelling value across the
products menu
T3. Healthier fast-foods alternatives 2. Creating new products 2.

Strengths
SO – Strategy S1. Brand name S2. Marketing success
S3. High number of stores S4. Best coffee taste
Opportunities Matching:
O1. Coffee market is •
growing
•
O2. Breakfast market is •
growing Strategy: (Main actions):
O3. Bargain menu is •
seeking •
•
•
Main Activities:
•
•
•
•
•
•
•
Strengths
SO – Strategy S1. Brand name S2. Marketing success
S3. High number of stores S4. Best coffee taste
Opportunities Matching:
O1. Coffee market is •
growing
•
O2. Breakfast market is •
growing Strategy: (Main actions):
O3. Bargain menu is •
seeking •
•
•
Main Activities:
•
•
•
•
•
•
•
Action Plan:
Strategic Budget Duration Planned Planned Resp.
Strategies Activities
Objectives $1000 (month) Start Finish Eng.
Running advanced
training program
Improve the
Creating competitive
customer
advantage
satisfaction
Creating new markets
Running advanced
training program
Improve the
Analyzing the
production
production system
rates
Developing the
motivation program
Running advanced
training program
Improve the
Preparing the product
resource
resource files
Utilization
Developing the
motivation program

Risk Analysis:
ISO 31000(2009) : Risk Management Principles and Guidelines
Risk - Effect of uncertainty on objectives
For example:
Market risk is the uncertainty resulting from changes in market prices .
Investment risk is the probability of earning a return less than that expected.
Risk Types:
• Business (risk to overall business)
• Delivery (risk to project delivery)
• Technical (specific to particular technology)

Risk Analysis:
Risk Assessment Process

Detailed Risk Analysis Worksheet
Project:_____________________________ Prepared by: ________________
Date: ___________ Reviewed by: ________________
Risk Category: __________________________ Risk Level: _____________
Risk Description:
Risk Impact (Cost, Schedule, Technical):

PROJECT
RISK
Quality
SCOPE
Risk Analysis:
Identify Activities with

High Probability of Delay
4 2
Critical Activity Risk
Add Extra Time Based on Best Collective Judgment

Risk Analysis:
Sensitivity Analysis Graph:
Bill of
Quantity
Profit
6000
Critical
Material
Cost
-30 -20 -10 0 10 20 30

% change
Base from base

Risk Plan:
Project:
Scope of work:
Activity / Risk Source/ Corrective Responsible Due

Consequence Probability
Item Type Root cause Action Engineer date
Schedule Project Late High
Cost
Scope
Quality
Safety

Change OUR VISION OUR MISSION
• ____________________ • ____________________
Management •
•
____________________
____________________
•
•
____________________
____________________
• ____________________ • ____________________
OBJECTIVES STRATEGY In general, people

• ____________________ • ____________________
•
•
____________________
____________________
•
•
____________________
____________________
don’t like change.
• ____________________ • ____________________
How to Change this Attitude? What can YOU do?

Change Management ‫إدارة التغيير‬
Current State Future State

How?
1. Reactive 1. Proactive
2. Groups 2. Teamwork
3. Pessimistic 3. Optimistic
4. Short-term 4. Long term
5. Data
5. Information
Change management is a systematic approach to change from a
current state to future state.
Resistance to Change
Effort to block new

ways of doing things
Four Factors
Lack of
understanding
Different
assessments
Low tolerance
Self-interest
for change
“If you want to make enemies, try to change something” – Woodrow Wilson
Change Management ‫إدارة التغيير‬
Good
Communication
Top-Management Training
Support
Minimizing
Resistance
to Change Employee
Negotiation
Involvement
Stress
Management

Change Control in Project Management
Management
System
Change
Management
Change must involve

Leaders the people
People
Culture
1. Scope Change
2. Quality Change
Change
3. Schedule Change Management Plan
4. Budget Change
5. Culture Change

PM vs CM
Test Exam

Question #1: True or False? Correct the false statement.
Statement √ or X
Vision is a clear statement for future image across the business.
Goal is a short term SMART objective.
SWOT stands for: Strengths, Weaknesses, Operation and Threats.
Brainstorming is useful for generating innovative ideas topic.
Change is the process of moving from current state to future state.
Marketing strategy is the same as business strategy.
SWOT analysis originated as a military tool.
All leaders are managers but not all managers are leaders.
Strategic planning is the same thing as long-term planning.
Only one individual is needed to develop and build a strategic plan.
Strategic planning prepares for an exact result desired in the future.
Strategic planning is not necessary in nonprofit organizations.
SWOT stands for: System, Weaknesses, Opportunities and Threats.
The strategic plan is a dynamic process.
Benchmarking means learn from the best practice
Goal is a short term action statement to change something.

Statement √ or X
Vision is a clear statement for future image across the business. √
Goal is a short term SMART objective. x
SWOT stands for: Strengths, Weaknesses, Operation and Threats. x
Brainstorming is useful for generating innovative ideas topic. √
Change is the process of moving from current state to future state. √
Marketing strategy is the same as business strategy. x
SWOT analysis originated as a military tool. √
All leaders are managers but not all managers are leaders. √
Strategic planning is the same thing as long-term planning. √
Only one individual is needed to develop and build a strategic plan. x
Strategic planning prepares for an exact result desired in the future. √
Strategic planning is not necessary in nonprofit organizations. x
SWOT stands for: System, Weaknesses, Opportunities and Threats. x
The strategic plan is a dynamic process. √
Benchmarking means learn from the best practice √
Goal is a short term action statement to change something. x

Statement √ or X
Vision is a clear statement for future image across the business. √
Goal is a long term SMART objective. x
SWOT stands for: Strengths, Weaknesses, Opportunities and Threats. x
Brainstorming is useful for generating innovative ideas topic. √
Change is the process of moving from current state to future state. √
Marketing strategy is a part of the business strategy. x
SWOT analysis originated as a military tool. √
All leaders are managers but not all managers are leaders. √
Strategic planning is the same thing as long-term planning. √
Teamwork is needed to develop and build a strategic plan. x
Strategic planning prepares for an exact result desired in the future. √
Strategic planning is necessary in any organizations. x
SWOT stands for: Strengths, Weaknesses, Opportunities and Threats. x
The strategic plan is a dynamic process. √
Benchmarking means learn from the best practice √
Goal is a long term action statement to change something. x

Question #2: Select the best response.
A. bad process quality B. lack of customers C. good layout D. strong competitors
A. high process quality B. unskilled labor C. good leaders D. strong competitors
A. high process quality B. unskilled labor C. good leaders D. good location
A. no quality system B. lack of customers C. good experience D. strong competitors
A. high defect ratio B. material availability C. good safety D. strong competitors
A. high machining cost B. low material cost C. good supplier relationship D. strong competitors
A. high process quality B. good labor experiences C. good leaders D. good customer relationship
A. no safety awareness B. lack of suppliers C. low labor experience D. strong leaders
A. strength points B. weakness points C. opportunities points D. threats points
PM
A. strength points Strategic Planning – Dr. Attia Gomaa - 2016
B. weakness points C. opportunities points D. threats points 150
Question #2: Select the best response.
A. bad process quality B. lack of customers C. good layout D. strong competitors
A. high process quality B. unskilled labor C. good leaders D. strong competitors
A. high process quality B. unskilled labor C. good leaders D. good location
A. no quality system B. lack of customers C. good experience D. strong competitors
A. high defect ratio B. material availability C. good safety D. strong competitors
A. high machining cost B. low material cost C. good supplier relationship D. strong competitors
A. high process quality B. good labor experiences C. good leaders D. good customer relationship
A. no safety awareness B. lack of suppliers C. low labor experience D. strong leaders
PM
A. strength points Strategic Planning – Dr. Attia Gomaa - 2016
B. weakness points C. opportunities points D. threats points 151
Question #3: Discuss briefly the following for a construction company:
Our Vision:
To be a leader in the construction projects in Egypt & Middle East.
Our Mission:
To offer a wide range of construction projects of good design on
Our Values:
Effectiveness, Efficiency, Integrity, Transparency, Reliability, Proactive

Our Vision: To be a leader in the construction projects in Egypt & Middle East.
What do we need to be? A leader

Is it ambitious? yes
Is it a clear and simple vision? yes
Does it represent an ultimate goal? yes
Is it future oriented? yes
Is it a SMART ?
Recommendations:
Our Vision:
To be one of the best ten companies in the construction projects in Egypt & Middle East.

Our Mission: To offer a wide range of construction projects of good design on

Is it a SMART ?
Recommendations:
Our Mission:
To offer a wide range of construction projects of high quality on the international standards
at low cost
Our Values: Effectiveness, Efficiency, Integrity, Transparency, Reliability, Proactive

Fundamental beliefs
Easy to remember
Value Objective
Effectiveness Improve the customer satisfaction
Efficiency Improve the resource utilization
Integrity Improve the integration management between the different departments
Transparency Improve the work environment
Reliability Improve the quality levels for the different tasks
Proactive Improve the risk assessment for the different tasks
Recommendations:
Our Values:
Effectiveness, Efficiency, Integrity, Transparency, Proactive

Question #4: Discuss briefly the SMART goals for the following goals:
"Increase the market share by 10%"
" One of the business goals could be to increase the market share by 20% the following year
and 10% each year thereafter. "

"Increase the market share by 10%"
Is it a SMART ?
Specific Yes Market share
Measurable Yes Increasing by 10%
Applicable Yes There is no base to judge
Realistic / Reliable Yes There is no base to judge
Conclusion:
It is not a SMART goal
Recommendations:
"Increase the market share from 20% to 30% by the end of 2018"

Is it a SMART ?
Measurable Yes 20% & 10%
Time frame Yes Following year & each year thereafter
Conclusion:
The current year is not specified exactly.
It is hard to increase the market share by 10% annually.
It is a SMART goal
Recommendations:
Increase the market share by 20% the following year and 10% each year thereafter

Question #5:
Discuss briefly the TOWS analysis (strategy formulation) for the following SWOT
for a manufacturing company:
Internal
S1. High quality W1. High overhead cost
External
O1. Market is growing T1. Strong competitors
O2. Online market T2. Energy cost is increasing
O3. Economic conditions are improving T3. Market price is decreasing

S3. Good marketing W3. High energy con.
O1. Market is growing ‫استراتيجيت انتوسع واننمو‬ ‫استراتيجيت انتطوير وانتحسين‬
O2. Online market
‫كيفيت تطوير جوانب انقوة‬ ‫كيفيت تقهيم جوانب انضعف‬
O3. Economic conditions ‫تاستغالل انفرص انًتاحح‬ ‫تئستغالل انفرص انًتاحح‬
T1. Strong competitors ‫استراتيجيت انثباث واالستقرار‬ ‫استراتيجيت االنكماش‬
T2. Energy cost
‫كيفيت إستغالل جوانب انقوة‬ ‫كيفيت تقهيم بعض األنشطت انضعيفت‬
T3. Market price ‫نًىاجهح انتهذيذاخ انًؤثرج‬ ‫نًىاجهح انتهذيذاخ انًؤثرج‬
Strategy
(Main actions to achieve a certain objective)
O1. Market is growing • Improve the customer satisfaction • Improve the R&D activities
• Maintain the high quality • Upgrade the old equipment
O2. Online market • Improve the market survey • Improve the production capacity
O3. Economic conditions • Develop the product features • Reduce the production cost
• Develop new products • Improve the labor skills
• Increase the market share • Improve the online marketing
• Create new markets •
• Improve the advertizing •
T1. Strong competitors •Improve the resource utilization • Improve the energy consumption
• Identify the competition points rates
T2. Energy cost • Develop the benchmarking • Improve the maintenance plan
T3. Market price • Create competitive advantages • Use green energy policy
• • Improve the motivation program
Top Priories
Question #6:
The Benchmarking information for a manufacturing company is as follows:
• Profit Ratio = (Unit Price – Unit Cost)/Unit Cost (25 to 30)%
• Inventory Turnover = Cost of Sales / Average Inventory Value (5 to 6 ) turn
• Overdue Ratio = Overdue Quantity / Sales Quantity (1 to 2 ) %
• Production Rate = Net Production Quantity / Production Time (1.2 to 1.3) ton/hr
The actual production information for this company is as follows:
Department Item Unit Actual 2015
Sales Quantity ton 400
Sales
Sales Revenue 1000 LE 2500
Department
Overdue Quantity ton 30
Standard Production Rate ton/hour 1.2
Process Total Production Quantity ton 350
Department Production Defect ton 10
Production Time hour 360
Production Material Cost 1000 LE 700
Financial
Processing Cost 1000 LE 400
Department
Overhead Cost 1000 LE 500
Inventory Production Materials ton 600
Department Average Inventory Value 1000 LE 400
Based on this information, discuss the Key Performance Indicators, Star Diagram &
Improvement recommendations for this company.
Indicators Calculation:
Unit Price = Sales Revenue / Sales Quantity = 2,500,000 / 400 = 6250 LE/ton
Total Cost = Production Material Cost + Processing Cost + Overhead Cost
= 700,000 + 400,000 + 500,000 = 1,600,000 LE
Net Production Quantity = Total Production Quantity - Production Defect
= 350 -10 = 340 ton
Unit Cost = Total Cost / Net Production Quantity = 1,600,000 / 340 = 4,705 LE/ton
Profit Ratio = (Unit Price - Unit Cost ) / Unit Cost = 32.84%
Cost of Sales = Unit Cost * Sales Quantity = 4,705*400 = 1,882,000 LE

Average inventory value = 400,000 LE
Inventory Turnover = Cost of Sales / Average Inventory Value = 4.7 turn
Overdue Ratio = Overdue Quantity / Sales Quantity = 30/400 = 7.5%
Production Rate = Net Production Quantity / Production Time

= 340 / 360 = 0.94 ton/hour
KPIs Analysis:
KPIs Unit Actual Benchmark Evaluation
Profit Ratio % 32.84 25 to 30 Strength
Inventory Turnover turn 4.7 5 to 6 Weakness
Overdue Ratio % 7.5 1 to 2 Very Weakness
Production Rate Unit/hour 0.94 1.2 to 1,3 Weakness
Ranking (from 1 to 10):
Profit Ratio: Inventory Turnover : Overdue Ratio: Production rate :

32.84 x = 11.1 6 10 1 10 1.3 10
30 10 5 8 2 8 1.2 8
25 8 4.7 x = 7.4 7.5 x = -3=0 0.94 x = 2.8

Star Diagram: Profit Ratio
Benchmark
Actual
Production Inventory
rate Turnover
Overdue Ratio
Recommendations:
- Maintain the profit ratio and improve the profit benchmark
- Improve the inventory turnover through reducing the inventory stock
- Improve the overdue ratio through improving the production schedule
- Improve the production rate through improving the machine utilization
Strategic Planning
Company:
Vision, Mission, Values

Department:
Long Goal
Goals
What?
Time Frame
Objectives
Strategies
How?
Tactics
Short

Goal:
Increase Sales
Objective #1: Objective #2:

Increase Product Revenue by 5% -
yearly
Strategy: Strategy:
- -
Tactic: Tactic:
- -
Tactic: Tactic:
- -
Tactic: Tactic:
- -

Is it a SMART ?
Measurable Yes 20% & 10%
Time frame Yes Following year & each year thereafter
Conclusion:
The current year is not specified exactly.
It is hard to increase the market share by 10% annually.
It is a SMART goal
Recommendations:
Increase the market share by 20% the following year and 10% each year thereafter

Case Studies

Company: ABC Egyptian steel company
Our vision is to be one of the best steel companies in Egypt & Middle
East.
Our mission is to produce and supply the highest quality products to

our customers up to international standards in steel industry.
Our Values:
We believe that strong leadership, unified teamwork, highly skilled
manpower, customer satisfaction and customer relationship are the
key to achieve our goals.

Our vision is to be one of the best steel companies in Egypt & Middle East.
Is it a SMART ?
Specific Yes It is specified as “one of the best steel companies ”
Recommendations:
Our Vision:
-

Our mission is to produce and supply the highest quality products to our
customers up to international standards in steel industry.
In which field? Steel Companies
Is it a SMART ?
Specific Yes It is specified as “international standards in steel industry”
Recommendations:
Our Mission:
-

Our Values: We believe that strong leadership, unified teamwork, highly skilled manpower, customer
satisfaction and customer relationship are the key to achieve our goals.

Fundamental beliefs
Easy to remember
Value Objective
Recommendations:

Company: ABC Egyptian steel company
Our vision is to be one of the best steel companies in Egypt & Middle East.
Our mission is to produce and supply the highest quality products to our customers up to
international standards in steel industry.
Our Values: We believe that strong leadership, unified teamwork, highly skilled manpower,
customer satisfaction and customer relationship are the key to achieve our goals.
Strategic
Perspective KPIs Strategy
Objectives
Profit Ratio • Running advanced training program
Financial Improve the
• Preparing the financial resource files
Department Profitability Inventory Turnover • Analyzing the financial system
Offer Hit Rate • Running advanced training program
Market Grow the
Department Market Share Claim Ratio • Creating new markets
Enhance the Production Rate • Running advanced training program
Process
Process Defect Ratio • Analyzing the production system
Department • Developing the motivation program
Efficiency
Improve the Delivery Reliability • Running advanced training program
Procurement
Procurement • Preparing the supplier files
Department Mat. Quality Rate • Developing the motivation program
Reliability
Company: ABC Steel Company SWOT Matrix (Top 5 Points)

Internal
S2. Good leadership & teamwork W2. Insufficient area
S3. Skilled and young labor W3. Lack of standard information
S4: Advanced training plan W4: Lack of plans
S5: Good motivation programs W5: High employee turnover
O1. New & online markets T1. Strong & international competitors
External
O2: High customer satisfaction T2. New technology
O3. Suppliers & resource availability T3. Unstable market price
O4: Strong relationship with suppliers T4. Unstable currency rate
O5: International standards availability T5: High energy cost rate

Company: ABC Steel Company SWOT Analysis
Internal External
Perspective
Strengths Weaknesses Opportunities Threats
Financial W1 T4 - T5
Department
Market O1 - O2 T1 - T3
Department
Process S1 O5 T2
Department
Procurement O3 - O4
Department
S2 - S3 - W2 - W3 -
General
S4 - S5 W4 - W5

Company: ABC Steel Company
Quantitative Qualitative
Factors Areas Areas
Strengths
S2. Good leadership & teamwork

S3. Skilled and young labor
S5: Good motivation programs
Weaknesses
W2. Insufficient area

W3. Lack of standard information
W4: Lack of plans
Total
Company: ABC Steel Company
Quantitative Qualitative
Factors
Areas Areas
Opportunities
O1. New & online markets

O2: High customer satisfaction
O3. Suppliers & resource availability
O4: Strong relationship with suppliers
O5: International standards availability
T1. Strong & international competitors
Threats
T2. New technology

T3. Unstable market price
T4. Unstable currency rate
T5: High energy cost rate
Total

Internal Factor Evaluation Matrix (IFE)
Factors Weight (10) %
S1. High product quality 10 13.4%
S2. Good leadership & teamwork 8 11.9%
Strengths
S3. Skilled and young labor 7 10.4%

S4: Advanced training plan 5 7.5%
S5: Good motivation programs 6 9.0%
S% 52.2%
W1. High overhead cost 7 10.4%
Weaknesses
W2. Insufficient area 5 7.5%

W3. Lack of standard information 7 10.4%
W4: Lack of plans 7 10.4%
W5: High employee turnover 6 9.0%
W% 47.8%
External Factor Evaluation Matrix (EFE)
Factors Weight (10) %
O1. New & online markets 7 9.7%
Opportunities
O2: High customer satisfaction 10 13.9%

O3. Suppliers & resource availability 9 12.5%
O4: Strong relationship with suppliers 8 11.1%
O5: International standards availability 7 9.7%
O% 56.9%
T1. Strong & international competitors 7 9.7%
T2. New technology 6 8.3%
Threats
T3. Unstable market price 6 8.3%

T4. Unstable currency rate 6 8.3%
T5: High energy cost rate 6 8.3%
T% 43.1%


Internal
S2. Good leadership & teamwork W2. Insufficient area
S5: Good motivation programs W5: High employee turnover
O1. New & online markets T1. Strong & international competitors
External
O2: High customer satisfaction T2. New technology
O3. Suppliers & resource availability T3. Unstable market price
O4: Strong relationship with suppliers T4. Unstable currency rate
O5: International standards availability T5: High energy cost rate

Company: ABC Steel Company Focus Group
S2. Leadership & teamwork W2. Insufficient area
S5: Motivation programs W5: High employee turnover
O1. New & online markets ‫استراتيجيت انتوسع واننمو‬ ‫استراتيجيت انتطوير وانتحسين‬
O2: High customer satisfaction
O3. Suppliers & resource availability ‫كيفيت تطوير جوانب انقوة‬ ‫كيفيت تقهيم جوانب انضعف‬
O4: Strong relationship with suppliers ‫تاستغالل انفرص انًتاحح‬ ‫تئستغالل انفرص انًتاحح‬
O5: International standards availability
T1. Strong competitors ‫استراتيجيت انثباث واالستقرار‬ ‫استراتيجيت االنكماش‬
T2. New technology
T3. Unstable market price ‫كيفيت إستغالل جوانب انقوة‬ ‫كيفيت تقهيم بعض األنشطت انضعيفت‬
T4. Unstable currency rate ‫نًىاجهح انتهذيذاخ انًؤثرج‬ ‫نًىاجهح انتهذيذاخ انًؤثرج‬
T5: High energy cost rate
SO – Strategy: Focus Group
Strengths Opportunities
S1. High product quality O1. New & online markets
S2. Good leadership & teamwork O2: High customer satisfaction
S3. Skilled and young labor O3. Suppliers & resource availability
S4: Advanced training plan O4: Strong relationship with suppliers
S5: Good motivation programs O5: International standards availability
Strengths + Opportunities = SO – Strategy
Improving the customer service
S1 & S3 & S5 + O1 & O2 & O3 = Creating new products
Creating new markets
Improving the standards applications
Improving the customer service
S1 & S3 & S4 + O2 & O5 =
Competitive advantage
Improving environmental conditions
Improving SCM
Improving the supplier reliability
S2 & S3 & S5 + O3 & O4 & O5 = Improving resource utilization
Developing the current products
PM Increasing
Strategic Planning – Dr. Attia Gomaa - 2016 the market share 184
WO – Strategy: Focus Group
Weaknesses Opportunities
W1. High overhead cost O1. New & online markets
W2. Insufficient area O2: High customer satisfaction
W3. Lack of standard information O3. Suppliers & resource availability
W4: Lack of plans O4: Strong relationship with suppliers
W5: High employee turnover O5: International standards availability
Weaknesses + Opportunities = WO – Strategy
Improving the process efficiency
W1 + O1 & O2 =
Reducing the overhead costs
Improving motivation program
W5 + O1 & O2 = Increasing the online market
Increasing market share
Improving training program
W3 & W4 + O5 = Improving information & planning
Increasing standard awareness
Reducing material storage area
W1 & W2 + O3 & O4 & O5 = Achieving Lean approach (Visual control 5S)
Reducing overhead cost
ST – Strategy:
Focus Group
Strengths Threats
S1. High product quality T1. Strong & international competitors
S2. Good leadership & teamwork T2. New technology
S3. Skilled and young labor T3. Unstable market price
S4: Advanced training plan T4. Unstable currency rate
S5: Good motivation programs T5: High energy cost rate
Strengths + Threats = ST – Strategy
Creating competitive advantage
S1 + T1 & T2 = Developing the current products
Creating new products
Using new technology
S3 & S4 & S5 + T2 & T5 = Running advanced training program
Increasing energy utilization
Improving SCM (Supply Chain Manag.)
S2 & S4 + T3 & T4 =
Increasing inventory turnover

WT – Strategy:
Focus Group
Weaknesses Threats
W1. High overhead cost T1. Strong & international competitors
W2. Insufficient area T2. New technology
W3. Lack of standard information T3. Unstable market price
W4: Lack of plans T4. Unstable currency rate
W5: High employee turnover T5: High energy cost rate
Weaknesses + Threats = WT – Strategy

Running advanced training program
W1 + T5 = Developing the motivation program
Increasing the energy productivity
W2 & W3 & W4 + T2 = Improving resource utilization
+ =
+ =
+ =

WT – Strategy:
Focus Group
Weaknesses Threats
W1. High overhead cost T1. Strong & international competitors
W2. Insufficient area T2. New technology
W3. Lack of standard information T3. Unstable market price
W4: Lack of plans T4. Unstable currency rate
W5: High employee turnover T5: High energy cost rate
Weaknesses + Threats = WT – Strategy

Analyzing the business unit
Reducing time losses
W1 & W5 + T1 & T3 & T4 =
Reducing overhead cost
Reducing product price
+ =
+ =
+ =
+ =

Company: A Retail Computer Store

Company: A Retail Computer Store

TOWS Analysis:

Reference Books:

Reference Books:
The Project
Management Body of
Knowledge
http://www.PMI.org
• www.pmi-ctt.org
• www.projectkickstart.com/html/tips.htm
FastForwardMBA in • www.pmforum.org
Project Management • www.princeton.edu/ppo
•Value at Risk : A New Benchmark for Measuring Derivatives Risk - by Philippe Jorion
Hardcover - 332 pages (August 1996)
Irwin Professional Pub; ISBN: 0786308486 ; Dimensions (in inches): 1.20 x 9.33 x 6.34
•Managing Financial Risk : A Guide to Derivative Products, Financial Engineering and Value
Maximization (Irwin Library of Investment & Finance) -
•by Charles W. Smithson, Clifford W. Smith
Hardcover - 620 pages 3rd edition (July 1998)
McGraw-Hill; ISBN: 007059354X ; Dimensions (in inches): 2.05 x 9.76 x 7.86

‫صنع في مصر ‪Made in Egypt -‬‬
‫اللهم يا حفيظ ‪ -‬أحفظ مصر وأهل مصر من كل سوء – اللهم أمين‬
Thank you for your attention! Useful Science For the
Sake of Allah
Suggestions Comments ‫اللهم تقبل هذا العلم‬

‫َقا ُنىا ُس ْث َحا ََ َك ال ِع ْه َى َن َُا إال َيا‬
َ ‫َع َّه ًْ َت َُا إ ََّ َك َأ‬
"‫َد ان َعهِي ُى ان َحكِي ُى‬
)32 ‫(سىرج انثقرج آيح‬
Questions
Copyrights of this file & More information:
Dr. Attia Gomaa

Industrial Engineering Professor & Consultant
Mechanical Eng. Department – Shoubra Faculty of Eng. - Benha University
& Engineering and Science Services - American University in Cairo
attiagomaa@yahoo.com or attiagomaa@aucegypt.edu
Tel: 01222738497

Strategic Planning - 09 09 2016

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‫وما توفيقي إال باهلل‬

Strategic Planning Best Practice

Dr. Attia Gomaa

PM Strategic Planning – Dr. Attia Gomaa - 2016 2

This is an Open Discussion Course:

– Share Knowledge ‫– تبادل المعرفة‬

– Share Best Practices ‫– تبادل التجارب الجيدة‬

Remember … You can’t do it alone!

Strategic planning is a tool for continuous improvement

A Systematic Methodology to design the business future.

A systematic approach to develop blueprint for action and change

Strategic planning is a journey, not a destination

PM Strategic Planning – Dr. Attia Gomaa - 2016 5

2. Medium-range planning: it covers a period of 1 month

3. Short-rang planning: it covers a period of 1 day to 1

PM Strategic Planning – Dr. Attia Gomaa - 2016 6

Site  Process Leaders Work Orders Monthly

Strategic Planning Process – Three Basic Questions

3: What Must We Do To Close The Gap? Strategy

PM Strategic Planning – Dr. Attia Gomaa - 2016 8

1: Where Do We Want To Go?

2: Where Are We Now?

3: What Must We Do To Close The Gap?

Critical Issues Strategies Action Plans Strategy

PM Strategic Planning – Dr. Attia Gomaa - 2016 9

PM Strategic Planning – Dr. Attia Gomaa - 2016 10

2) Vision 7) Strategic Objectives 12) Action Plan

3) Mission 8) KPIs 13) Financial Plan

4) Values 9) Benchmarking 14) Risk Plan

5) Focus Groups 10) SWOT Analysis 15) Change Management

PM Strategic Planning – Dr. Attia Gomaa - 2016 11

Strategies “TOWS Analysis”

Action Plan & Financial Plan

Implementation & Feedback

Control & Corrective Actions

PM Strategic Planning – Dr. Attia Gomaa - 2016 13

To offer a wide range of construction projects of good design on

What do we need to be? A leader

PM Strategic Planning – Dr. Attia Gomaa - 2016 17

Is it represent how to achieve the vision? yes

Clear and direct values

PM Strategic Planning – Dr. Attia Gomaa - 2016 19

• Brainstorming is some kind of sharing

• Planned meeting (one hour per week)

– Employee performance is a critical quality variable

– The implementation of work teams and empowerment of employees to

– A group of employees who meet regularly to discuss quality-related

• Don’t criticize or evaluate ideas (respect each other)

PM Strategic Planning – Dr. Attia Gomaa - 2016 21

– Provides opportunity for maximum

PM Strategic Planning – Dr. Attia Gomaa - 2016 22

Strategic Objective – How do you want it?

PM Strategic Planning – Dr. Attia Gomaa - 2016 23

Improve the Running advanced training program

customer Creating competitive advantage

Improve the Running advanced training program

production Analyzing the production system

Improve the Running advanced training program

resource Preparing the product resource files

PM Strategic Planning – Dr. Attia Gomaa - 2016 24

Plan Your Road Map

Writing down your goals creates the

PM Strategic Planning – Dr. Attia Gomaa - 2016 25

Specific Measurable Applicable