Claire - Overview of Danker.

Conor - Main issues and logistics management.

Niall - The approach of management and the issues raised.

Maria - Analysis of forecasting.

Ali - Recommendations.

Long established Craft manufacturer based in county Meath.

They can trace origins back 5 generations.

The business is now under the management of Rolf Danker

The strategic focus of the business is growth

through new products and services.

Danker had a great period of growth in the

1990’s due to the economic boom in the

construction sector in Ireland.

Danker expanded into the cabinetry business

which was a huge success for them.

However the expansion also highlighted

problems in the business, with the extra

responsibility causing missed deadlines and

quality to suffer.

• Poor Forecasting

• Lack of expertise

• Sales Decreasing

0

2000

4000

6000

8000

2005 2006 2007 2008 2009 2010 2011

t ot al sal es r evenue€ 000

39504200

5150

6850 6450 62505941

year s

t ot al sal es

r evenue( € 000)

years 2005 2006 2007 2008 2009 2010 2011

"total sales revenue

(€000)"

3950 4200 5150 6850 6450 6250 5941

2010

2011

Sal es Revenue 2010( € 000)Qt r . 1,

1, 000, 16%

Qt r . 2, 2000, 32%Qt r . 3,

2200, 35%

Qt r . 4, 1050, 17%

Qt r . 1

Qt r . 2

Qt r . 3

Qt r . 4

Sal es Revenue 2011( € 000)

Qt r . 1, 1450, 24%

Qt r . 2, 1513, 25%

Qt r . 3,

1525, 26%

Qt r . 4,

1453, 25%

Qt r . 1

Qt r . 2

Qt r . 3

Qt r . 4

Executive opinion◦ The views of executives from sales and other fields

◦ To generate a forecast about future sales

◦ Forecast modified based on managements opinions and expectations

Executive opinion◦ Sales manager

◦ CEO

◦ Discussed breakdown of market demand

Home improvements

New house builders

◦ “The marketing effort is fine” – no need for increase in cost

Trend analysis◦ An aspect of technical analysis that tries to predict

the future movement of a stock based on past data.

◦ Trend analysis is based on the idea that what has happened in the past gives traders an idea of what will happen in the future.

Trend analysis◦ Annual percentage Sales Trend per Quarter in 2010

◦ Qtr. 1: 16% - €1000

◦ Qtr. 2: 31% - €2000

◦ Qtr. 3: 35% - €2200

◦ Qtr. 4: 18% - €1050

◦ Total: 100% - €6250

Forecasting

Preparation of financial statements Price quotations Costs estimation

Only estimates Allowances made for inaccuracy Longer periods – greater uncertainty

Executive Opinion

Quick and easy

The only means of forecasting in the absence of adequate data

Vague and inaccurate

Virtually wrong

Biased – too optimistic/pessimistic

Trend Analysis

Moving average

Simple and useful in a stable market

Change in market’s dynamics - growth rate swings

Inaccurate estimates impact future trends

Sales revenue decreased in 2011. Due to the nature of the business and the industry it is in it is likely that future growth would be optimistic.

In the short term a capacity freeze would be wise.

Benefits - wouldn’t be faced with excess inventory which would be a cost to the firm.

Disadvantages – could lose sales to competition. (increase part-time work to deal with high demand)

As we can see stagnant growth we could reduce working hours and try re-negotiate costs for raw materials.

Recommend have a level output plan. Although it relies on forecasts it would allow us to manage our directs costs more effectively. Forecasted quarter sales in 2011- similar 24%-26%

Can put an EDI system in place, this will increase the speed of transactions and also make the company more efficient. – fewer stock outs.