Any respectable five year plan needs to take a hard look at both the known competitive threats and the possible threats which are not yet obvious. You should start with your main competition. Analyze their current strategies and estimate the impact on revenues in year one. Try to anticipate the outcome and develop a strategic plan for counter-attack.
Porter's five competitive forces is an excellent tool for analyzing competitive forces.
Kamis, 13 Juli 2006
Sabtu, 08 Juli 2006
Passion For Long Term Planning
During my corporate life, the chief operating officer for our group was a frequent flyer with a huge territory. He would schedule meetings roughly twice a year although an unannounced visit was possible at any time. One topic was front page in every scheduled visit. Long range planning was his passion. He viewed the company as a "confederacy of entrepreneurs" and encouraged all of his direct reports to view their plans as a contract.
This passion was best manifested in his favorite story. I will do my best to paraphrase his short tale:
"Every one needs to be a good planner. Sometimes managers forget to plan. These managers may lose sight of their vision.
Planning isn't just for managers. Every person in the organization should have a plan. The time period we need to plan for is a function of our position in the company.
A good pot washer has a plan of attack. He needs to organize the pots and pans and setup a sequence of tasks to accomplish his mission. The tasks might include preliminary rinsing, separation of pots which require soaking and scrubbing, washing the easy pots first and then finishing the tough ones after they have soaked.
This pot washer will be much more productive than one who takes one pot at a time and deals with it.
I expect the top managers to have a much longer time horizon than one meal period. We need to forecast years in advance and have a plan to grow. This plan should keep competitive threats in mind. The plan should focus on the discovery of profitable opportunities.
We use five year plans to provide a compass for the future. Our annual budgets provide us with a means of tracking the plan and making changes over time."
We worked on a new five year plan every year. Our budgets were always based on the year 1 numbers from the most recent plan. The budgets of future years would always take into consideration the most recent year's actual results and the original expectations from the five year plan.
These plans were used to evaluate results monthly, quarterly, semi-annually and at year end. A significant portion of executive compensation was tied to performance.
This passion was best manifested in his favorite story. I will do my best to paraphrase his short tale:
"Every one needs to be a good planner. Sometimes managers forget to plan. These managers may lose sight of their vision.
Planning isn't just for managers. Every person in the organization should have a plan. The time period we need to plan for is a function of our position in the company.
A good pot washer has a plan of attack. He needs to organize the pots and pans and setup a sequence of tasks to accomplish his mission. The tasks might include preliminary rinsing, separation of pots which require soaking and scrubbing, washing the easy pots first and then finishing the tough ones after they have soaked.
This pot washer will be much more productive than one who takes one pot at a time and deals with it.
I expect the top managers to have a much longer time horizon than one meal period. We need to forecast years in advance and have a plan to grow. This plan should keep competitive threats in mind. The plan should focus on the discovery of profitable opportunities.
We use five year plans to provide a compass for the future. Our annual budgets provide us with a means of tracking the plan and making changes over time."
We worked on a new five year plan every year. Our budgets were always based on the year 1 numbers from the most recent plan. The budgets of future years would always take into consideration the most recent year's actual results and the original expectations from the five year plan.
These plans were used to evaluate results monthly, quarterly, semi-annually and at year end. A significant portion of executive compensation was tied to performance.
Rabu, 05 Juli 2006
Why Should You Count Key Items Daily?
If you have ever taken a shot at linking your entire POS item listing to recipes, the effort is significant and hopefully the return will match. The typical recipe model will include a lot of educated guesswork. Perhaps 5% subtracted from the perfect yield to allow for normal variance. When guessing the count for a typical box of 16-20 shrimp, most people use the low number - 16. If it's actually 20, that's a 20% difference.
Dry goods may settle and when called in recipes by volume, yields can be less than expected. Some models adjust to the conservative side. People want variances to be caused by actions or activities other than normal yield variation. Most people set standard yields to the low side of normal.
Let's introduce a brazen thief into the formula. Our thief is taking a case of frozen meat to the garbage bin about 20 minutes before closing each night.
In our example, it's a high volume operation and the menu is dominated with ribs. Half racks and full racks are sold with a variety of sides and combo choices. The ideal usage calls for 100 cases of ribs a week. The thief works 4 nights a week.
Would your recipe model catch the 4% variance due to theft?
Portion control helps. A case of 30# baby back ribs will include 24-1.25# racks. Daily counts of prep, preliminary cooking and POS sales will help answer the 4% riddle. You won't have time to do this analysis with each ingredient.
Pick your top 10 to start. It can get addictive when you see the savings. I'd limit this daily activity to 25 items.
Click Here For More Information
Dry goods may settle and when called in recipes by volume, yields can be less than expected. Some models adjust to the conservative side. People want variances to be caused by actions or activities other than normal yield variation. Most people set standard yields to the low side of normal.
Let's introduce a brazen thief into the formula. Our thief is taking a case of frozen meat to the garbage bin about 20 minutes before closing each night.
In our example, it's a high volume operation and the menu is dominated with ribs. Half racks and full racks are sold with a variety of sides and combo choices. The ideal usage calls for 100 cases of ribs a week. The thief works 4 nights a week.
Would your recipe model catch the 4% variance due to theft?
Portion control helps. A case of 30# baby back ribs will include 24-1.25# racks. Daily counts of prep, preliminary cooking and POS sales will help answer the 4% riddle. You won't have time to do this analysis with each ingredient.
Pick your top 10 to start. It can get addictive when you see the savings. I'd limit this daily activity to 25 items.
Click Here For More Information
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