羅蘭貝格Financialorganizationandprocessesanalysis

1、- 122 -sha-4309-03690-08-15c.pptc. financial, organization and processes analysis- 123 -sha-4309-03690-08-15c.pptc1. financial situation analysis- 124 -sha-4309-03690-08-15c.pptc1.1 geberit shanghai- 125 -sha-4309-03690-08-15c.pptpresently, gsha is in serious corporate crisisphases of corporate cris

2、isweakstrongpathology of crisis symptomsnormative misfitstrategic crisisresults crisisliquidity crisisgeberitlowhighbankruptcy crisisback-up- 126 -sha-4309-03690-08-15c.pptall liabilities are short term and are increasing 4-fold. by the end of july 2000, liabilities are 75% of total assets developme

3、nt of liabilities (% of total assets)rmb 0004,07515,35825,352199819992000(1-7)13.4%46.4%75%+522%source: p&l geberit (shanghai), rb&p analysis- 127 -sha-4309-03690-08-15c.pptcompanys liquidity situation is deteriorating. current liabilities are increasing much faster than current assets, the

4、cash injection from the parent company is used to cover the running expenses in stead of building up assetsdevelopment of liabilities & assetsrmb 00011,50714,00715,7204,07515,35825,35098992000(1-7)current ratioquick ratio2.821.710.910.430.620.25current assetscurrent liabilitiessource: balance sh

5、eet geberit (shanghai), rb&p analysis+37%+522%- 128 -sha-4309-03690-08-15c.pptthe companys inventory increased by 91% , while current assets increased by 37%4,5177,2678,644199819992000(1-7)development of inventoriessource: balance sheet, geberit (shanghai), rb&p analysiscurrent asset structu

6、re (% of the current assets)+91%rmb 000199819992000(1-7)44%11%6%11%11%10%7%26%8%18%2%13%9%21%7%4%26%10%10%8%18%8%15%0%15,72014,00711,507raw materialswork in progressfinished goodsgoods purchased for resaleother inventoriestrade accounts receivable+37%rmb 000cash & cash equivalentsother accounts

7、receivable- 129 -sha-4309-03690-08-15c.pptdue to huge losses, the company is solely financed by inter-company loans, the liabilities increase much far faster than assetsbalance sheet geberit (shanghai) 19982000.7 rmb 000back-up199819992000(1-7)fixed assetsintangible assetsother prepaid expensesadvan

8、ced payments to suppliersinventoriesaccount receivablecash & cash equivalenttotal assetsshare capitalretained earningsnet income current yeartotal provisions & deferred revenuestotal (liabilities)total shareholder capitals & liabilities18,3185871004,5171,8625,11830,41241,426(5,420)(9,669

9、)0407530,41260.2%1.7%0.0%0.0%14.9%6.1%16.8%100.0%136.2%(17.8%)(31.8%)0.0%13.4%100.0%18,9968725737,2673,6632,97933,09041,426(15,089)(10,177)1,57215,35833,09057.4%0.32%0.1%0.2%22.0%11.1%9.0%100.0%125.2%(45.6%)(30.8%)4.8%46.4%100.0%18,06002343918,6444,0972,35433,78041,426(25,266)(8,293)56325,35033,7805

10、3.5%0.0%0.7%1.2%25.6%12.1%7.0%100.0%122.6%(74.8%)(24.6%)1.7%75%100.0%- 130 -sha-4309-03690-08-15c.pptthe accumulated losses till september 2000 are 86% of share capital. left alone the company will be insolvent by the end of this year net income losses(1997.122000.09)rmb 0005,42041,42635,67796691017

11、71041197(7-12)989900(1-9)accumulatedlossesshare capitalsource: p&l geberit (shanghai), rb&p analysis86%- 131 -sha-4309-03690-08-15c.pptthe company has been losing money since the foundation of jv, and the loss is continuously increasing in spite of the increase of sales-13,735-10,526-9,764+4

12、1%*: estimation199819992000*source: roland berger & partners analysissales developmentrmb 000operating lossesrmb 00014,80115,56810,219199819992000*+45%- 132 -sha-4309-03690-08-15c.pptmore than 70% of products sold in 2000 ( 1-9 ), including geberit locally produced products, have a negative gros

13、s profit marginmixture of product sold(2000.09)23.65%25.50%52.71%lida productsgeberit local producedgeberit importedgross profit margin2)(at actual cost)gross profit margin1)(at standard cost)+25%+44%- 6.93%- 7.43%+38%+ 38%lida productgeberit imported productsgeberit locally produced productssource:

14、 geberit (shanghai), roland berger & partners analysis1): calculate based on the full capacity utilization rate (80%90%)2): calculate based on the actual capacity utilization rate (20%30%)- 133 -sha-4309-03690-08-15c.pptthe disproportional increase of operating expense results in the increase of

15、 operating loss in spite of the improvement of product mixsource: p&l geberit (shanghai), roland berger & partners analysis19,29918,37915,012199819992000*+29%146.9%118.1%130.4%total operating expenses 19982000rmb 000* estimation% of sales- 134 -sha-4309-03690-08-15c.pptamong the cost of good

16、s sold, cost of materials and labor are two major cost driverssource: p&l, balance sheet, geberit (shanghai), roland berger & partners analysiscost of goods sold (% of sales)gsha 1999gsha 2000 (1-9)turnover15.568 million rmb10.514 million rmbcost of goods sold12.87million rmb (82.66% to sale

17、s)9.7 million rmb (92% to sales)structure of cost of goods sold113618512154293455685cost of materials*labour costdepreciationenergy consumptionmaintenanceothers75212493120364856543948%16%8%4%3.6%2.8%2%4%3.3%11%17%54%rmb 000rmb 000*note: the materials cost are the cost of all materials purchased, ins

18、tead of materials actually consumed.- 135 -sha-4309-03690-08-15c.pptand among the sales cost, salaries and travelling are two major cost drivers. meanwhile, promotion fees and staff training cost increasesource: p&l, balance sheet, geberit (shanghai)sales cost (% of sales)gsha 1999gsha 2000 (1-9

19、)turnover15.568 million rmb10.514 million rmbsales cost5.66 million rmb (36.35% to turnover)5.4 million rmb (52.4% to turnover)structure of sales costsalarytravelling costpromotion feeroom rental & parkingcommunication feestaff trainingothers315897958822129102120%6.2%3.8%0.2%6.6%6.08%1.6%3.4%6%9

20、%26%3.7%5761.4%0.6%269092558235216064626rmb 000rmb 000- 136 -sha-4309-03690-08-15c.pptincrease operating expenses results in increase of operating losses in spite of the improvement of salesback-upprofit & loss statement geberit (shanghai)19982000 rmb 000199819992000 (112)salescost of materials

21、gross profitpersonnel expenses energy/maintenancedepreciationmarketing expensesadministration expensesother operating expensestotal operating expensesoperating profit (loss)net income10,2194,9385,2486,8101,2361781855,76783615,012(9,764)(9,669)100.0%48.3%51.4%66.65%12.1%1.7%1.8%56.4%8.2%146.9%(95.5%)

22、(94.6%)15,5687,5217,8539,3451,6701,7811,2384,72230718,379(10,526)(10,177)100.0%48.3%50.4%60.0%10.7%11.4%8.0%30.3%2.0%180.1%(67.6%)(65.4%)14,8018,0036,6409,6081,5221,9881,3202,3172,54419,299(13,735)(14,656)100.0%54.35%44.9%64.9%10.3%13.4%8.9%13.7%17.2%130.4%(92.8%)(99.0)%source: geberit (shanghai), r

23、oland berger & partners analysis- 137 -sha-4309-03690-08-15c.pptthe company can not generate enough cash from business operations and it solely relies on the continuous cash injection from the parent company for survivalsource: cash flow, geberit (shanghai)cash inflow and outflow, 2000 (1-6)rmb

24、000-6545-8615554-1878-8615-192operatingworking capitalinvestmentcash before financinginter company loan- 138 -sha-4309-03690-08-15c.pptc1.2. geberit daishan- 139 -sha-4309-03690-08-15c.pptgdais sales have continuously improved, and cost are reducing; the inter-company sales increased much faster tha

25、n to third party2) including write-offs for obsolete materials: 1 million rmb & other unclear accountssales development rmb 000operating losses development rmb 00012%29%31%69%71%88%1998199920001)+136%+36%1) estimation(8,561)(10,706)(6,490)199819992)20001)-24%+74%328444517763third partyinter-comp

26、anysource: geberit (daishan)- 140 -sha-4309-03690-08-15c.pptgdais operating losses are decreasing due to reduction of costssource: p&l geberit (daishani)cost structure rmb 000199819992000 (1-9)11%15%10%21%1%4%36%8%12%1%3%23%29%13%3%16%5%29%22%19%16%other operating expensesadministrationmarketing

27、energy maintenancepersonnel expensescost of materialdepreciation 10,05814,44411,668359%325%206% of total sales- 141 -sha-4309-03690-08-15c.pptas a result of cost control, operating losses are reducing in line with the improvement of salesback-upprofit & loss statement (geberit daishan) rmb 000sa

28、lescost of materials gross profit (loss)personnel expenses energy/maintenancedepreciationmarketing expensesadministration expensesother operating expensesmanagement feetotal operating expensesoperating profit (loss)net income199819992000(19)3284(939)2168(4195)(427)(2267)(171)(2422)(1247)0(10729)(-85

29、61)(-8659)100.0%28.6%66.0%127.7%13.0%69.0%5.2%73.8%38.0%0%326.7%-260.7%-263.7%4451(4211)240(3361)(464)(2280)(170)(1756)(1719)483(10233)(10706)(-11052)100.0%94.6%5%75.5%10.4%51.2%3.8%39.5%39%10.9%229.1%-240.5%-248.3%4866(2224)2574(2959)(540)(1659)(321)(1309)(978)0(7834)(5255)(5401)100.0%45.7%52.9%60.

30、8%11.1534.1%6.6%26.9%20.1%0%160.6%107.7%110.5%source: geberit (daishan), roland berger & partners analysis2000(112)*7763(4000)3425(3947)(721)(2241)(427)(1742)(555)(100)(9915)(6490)(7223)100.1%51.5%44.1%50.8%9.3%28.5%5.5%22.4%7%1.3%127.7%83.6%93%* estimation- 142 -sha-4309-03690-08-15c.ppt8.8%24.

31、3%48.2%short-term interest bearing debt increased nearly 4 fold, leading the short-term liabilities increase by 123%. this amounted to 68.5% of total assets by the end of july, 2000source: balance sheet, geberit (daishan), roland berger & partners analysisliabilities developmentliabilities devel

32、opment, 98-00 (1-7)9,25914,25120,642199819992000(1-9)+123%rmb 000short-term interest-bearing debt development 98-00 (1-7)2,4807,02714,549+487%199819992000(1-9)rmb 000% of total assets% of total assets32.9%50.2%68.5%- 143 -sha-4309-03690-08-15c.ppt0.850.420.600.360.490.28as a result of the disproport

33、ional use of current assets and current liabilities, gdais liquidity situation is deterioratingsource: balance sheet geberit (shanghai), rb&p analysis7,8848,54710,2049,25914,25120,64298992000(1-7)current ratioquick ratiocurrent assetscurrent liabilities+29%+127%development liabilities and assets

34、 rmb 000- 144 -sha-4309-03690-08-15c.pptdue to huge losses, the company is solely financed by inter-company loans. liabilities increase faster than assets.balance sheet geberit (daishan) 19982000.7 rmb 000back-up199819992000fixed assetsintangible assetsinventoriesother prepaid expensesaccount receiv

35、able (net)cash & cash equivalenttotal assetsshare capitalretained earningsnet income current yeartotal liabilities & provisions total share capital & liabilities16,3093,9423,2967302,2861,57228,13535,447(8,372)(8,659)9,71928,13558.0%14.0%11.7%2.6%8.1%5.6%100.0%126.0%-29.8%-30.8%34.5%100.0

36、%16,4173,4323,1242222,3252,87628,39640,901(17,031)(11,052)15,59628,39657.8%12.1%11.0%0.8%8.2%10.1%100.0%143.9%-59.9%-38.1%54.9%100.0%17,0103,1353,9993082,3823,33530,16941,201(28,083)(3,919)20,97030,16956.4%10.4%13.2%1.0%7.9%11.1%100.0%136.6%-93.1%-13.0%69.5%100.0%source: geberit (daishan)- 145 -sha-

37、4309-03690-08-15c.pptc2. organization & processes- 146 -sha-4309-03690-08-15c.pptc2.1. organization structure- 147 -sha-4309-03690-08-15c.pptgdais organisation structures and management team have been improved after the change of the ownership, providing the basis for further improvementgdaibase

38、 for further improvement is establishedwholly controlled by geberitorganisation structure is clear and followedauthorities and responsibilities are cleargms management skills are accepted by the employeeschinese middle management team is set-upreporting system has set-uppositive corporate culture is

39、 forminginternal communication and co-operation have been improvedemployees are generally motivated and have the positive attitude to the future of the company- 148 -sha-4309-03690-08-15c.pptin gsha, geberit and lida have not integrated well from the foundation of jv. this creates a lot of internal

40、conflicts and management chaosgshalidageberitcorporate culturemanagement style/skillsproduct linesmarketswork style- 149 -sha-4309-03690-08-15c.ppthrhrhrhrmore importantly, in gsha, the official organization structure is not implemented official organization structureorganization structure in realit

41、ygmdpt. gmsales & marketingproduction & logisticccsadmin two parties exist leading to internal conflicts and complexities unclearly defined authorities and responsibilities, leading to overlap of some functions ccs is separated from the companys system, leading to inefficient co-operation an

42、d low efficiency gmdpt. gmccssales & marketingproduction & logisticadmin- 150 -sha-4309-03690-08-15c.pptgeneral manager is directly in charge of sales and administration by being the department manager, leading to no middle management team. most 3rd tier managers are newly appointed, which r

43、esults in lacking continuity in management 1): employees from lida2): the management team of sales department is relatively stable, but the turnover of sales staff is relatively highgmh. schuettesales & marketing2)h. schuetteproduction & logisticken leung 7 monthsccsk.koenigslehneradministra

44、tionh. schuetteprocess engineering 24 yearsquality control1 monthlogistic 5 monthsoutside purchase 5 monthsproduction control 32 yearsproduction 3 monthsmaintenance5 monthslocal purchase2 yearscontrolling1 yearedp2 monthsdoc. admin17 yearsmaterial dev.2 monthspersonnel 32 yearsaccounting2 yearsprodu

45、ction dep.past-timequality management n/nprocess dep. n/n 6 months 3- 6 months 3 months1)1)1)1)1)- 151 -sha-4309-03690-08-15c.pptc2.2. management structure- 152 -sha-4309-03690-08-15c.pptthe high hierachy management design in gsha leads to low efficiency, and slow decision making processorganization

46、 & management structuredecision-making processgmdpt. gmdep. managerregional managersectional management2111421total: 48, upto 32% of total employeesgmdpt. gmtotal: 12 people report to gm directly- 153 -sha-4309-03690-08-15c.pptpersonnel expenses in gsha have been up to 73.5% of total sales in ju

47、ly 2000, as a result of the change of personnel structure personnel development & structure 1997-2000*turnover per employee *rmb 0001997199819992000* exclude staff in beijing office7410598199819992000* estimationproductionadminsalesccs11%2%6%6%15%17%19%31%29%25%23%59%54%52%52%129138148151+13%0%-

48、 154 -sha-4309-03690-08-15c.pptthe general manager can not gain necessary and correct data from the company for decision-makingmain problems of data/reportingno control of data input (e.g. no cross check in the warehousing)data inputa lot of useful data arent available (e.g. scrapped product report)

49、data processingno strict control system (e.g. no comparison of actual cost and standard cost)data is only for document, not for analysisdata controllingtoo high figures in budgeting and sales forecastplanningpoor quality decision basis- 155 -sha-4309-03690-08-15c.pptperformance evaluation and incent

50、ive system in gsha is very weak, leading to low motivation and commitmentproblemsevaluation & promotionimpactsno defined procedure & criteria were found for evaluationno clear criteria for promotionpoor cooperationirresponsible workincentive system & trainingno incentive schemeno personn

51、el development program not enough training programs low motivation among stafflow commitment to the companylow quality of employeeshigh staff turnover- 156 -sha-4309-03690-08-15c.pptgsha does not have the proper management system, therefore it is run inefficientlymain problems in managementmain prob

52、lems in management systemcontrolling system is not followedlack of performance evaluation system no incentive schemeunclearly defined authorities & responsibilitiesno reliable information for decision - making (e.g. actual cost)quality of data is poorno formal reporting system to collect dataoff

53、icial structure isnt implementedgm doesnt have leadershipredundant management level leads to prevarication & inefficiencymanagement team isnt integrated and huge turnover in the middle managementno motivating corporate cultureno trustworthiness between gm & local staffdecision - makingcontro

54、lling, promotion & evaluationmanagement structureculture, morale, communicationlow morale/motivationlow commitment to the companyinefficient internal communicationunclear criteria for promotion- 157 -sha-4309-03690-08-15c.pptc2.3. key process analysis- 158 -sha-4309-03690-08-15c.pptcurrently, in

55、 gsha the production-oriented process leads to unawareness of the market, as a result, there are no right products in the right marketproductionsalesmarketinghrr&dfinancelogisticsafter-sales servicecorporate strategybusiness unit strategyproduct strategyprofitscorporate culturemoralemanagement c

56、apabilitiescooperation with chinese partners- 159 -sha-4309-03690-08-15c.pptccs does not have enough market information which leads to long development time and limited number of new productsproduct initiationproduct developmentproduct launchno clear product development strategy, no comprehensive ma

57、rket research, no detailed quantitative forecast and non market oriented method lead to low number of successful products and waste of resourcesnot enough manpower and technology resources and lack of cooperation and communication with other departments (e.g. production and sales) leads to poor desi

58、gn and limited number of new productslong time -to-market leads to missed market opportunity ( especially for daishan )- 160 -sha-4309-03690-08-15c.pptin gsha, process control in production system is inadequate, leading to high production costproduction planningpurchasingimprecise sales forecast fig

59、ure from sales department and too many “daily sales order”lead to difficulties in arranging the production schedule and purchasing. this least to high inventory level and delivery delayno mis for purchase plan leads to high amount of storage or shortage of some materialsno evaluation of suppliers le

60、ads to high price and poor quality selection and review of suppliers are all done by purchasing department which leads to difficulties for further improvementfrequent change of suppliers leads to unsustainable quality and high waste ( e.g. pvc) - 161 -sha-4309-03690-08-15c.pptin gsha , process control in production system is inadequate,leading to high production cost (continued )control of input/outputproductionstorage controlccs can not provide all the necessary te