Two large competitive organizations recently merged and Wall Street set expectations for improved performance. Clearly, an urgent need to rationalize, streamline, and eliminate duplications were at the forefront of thought as the two companies merged. It is one thing to design a new architecture and relationships on paper, quite another to bring them to life. No matter how visionary the leader or competent the team, each quickly learns that synergy cannot be generated solely from above - or realized by reducing headcount. Synergy requires the engagement and commitment of the whole organization. And therein lies the challenge.

The executive leadership team agreed upon synergy savings targets for the newly formed organization and I was asked to lead the distribution and logistics function. My mission was to flawlessly integrate people, processes, technologies and systems to achieve world class performance. The goal was to achieve synergy target savings of $20 million. I’m in charge, so now what? I quickly realized that no one had a good roadmap to manage a merger integration or develop a transformation strategy that would deliver world class results. After giving the challenge

some thought I formulated my plan. The key tenants of a strategy focused organization are to mobilize change through the executive leadership. Translate the strategy into operational terms so that people understand the specific tasks they need to accomplish. Align the organization to the strategy by including them in the strategic planning process. Make the strategy everyone’s everyday job and give it top priority. Lastly, make the strategy a continual process and incorporate specific goals and objectives into performance plans to tie performance to pay. So, I assembled my team, agreed upon our mission and ensured we had everyone’s alignment as to the objectives and deliverables. I use a new team startup activity to establish ways of working and gain alignment as to the key objectives we need to accomplish. I developed a step by step strategic planning process to take the team from vision to execution and to translate the strategy into operational terms. After agreeing upon our vision, mission and values we quickly began to look at how we would assess and transform the organization to deliver world class performance. A benchmarking study was initiated with a collaborative effort between academia and our business experts. Dr. Rob Handfield, distinguished supply chain professor at N.C. State University was

GROWING YOUR ENTERPRISE THROUGH STRATEGIC MANAGEMENT DECISIONIMPLEMENTATION, AND PRECISE EXECUTION. A CASE BRIEF

PROVEN EXPERTISE = YOUR SUCCESS.

ALLOWING ENTREPRENEURS AND MANAGERS TO MAINTAIN AND REACH THEIR BUSINESS GOALS.

B E N E F I T S R E A L I Z AT I O N

CREATE AND EXPLOIT SYNERGIES & PARTNERSHIPS

CAPITALIZE ON CORE COMPETENCIES

ACHIEVE CRITICAL MASS OR COMPETITIVE SIZE

PRODUCTIVITY AND EFFICIENCY GAINS

Organizations need a new kind of leadership capacity to reframe dilemmas,

reinterpret options, and reform operations continuously. When leadership

creates a burning desire in the hearts and minds of their people to be the

best, creates a sense of urgency, forms a guiding coalition, agrees to a

vision for change and unleashes their talent with an entrepreneurial spirit;

transformational change will deliver world class performance.

HELPING LARGE AND MEDIUM-SIZED BUSINESSES STAY

AHEAD OF THE COMPETITION BY GENERATING POSITIVE CASH FLOWS, CONTROLLING

COSTS AND ACCELERATING PROFITABLE GROWTH.

• DEVELOP NEW PROCESSES QUICKLY

• INNOVATE WITHIN INDUSTRIES

• EVOLVE BEFORE MARKET DEMAND

INNOVATION THROUGH CO-OPETITION

When you have optimized flow, improved internal efficiencies, invested in the latest technologies and systems, what do you do next to gain step change improvement. Coopetition occurs when companies work together for parts of their business where they do not believe they have competitive advantage and where they believe they can share common costs. With this initiative we worked collaboratively with our competitors and shared common outsourced partners, transportation costs, warehouse facilities, methods, labor pools and material costs. By leveraging greater volumes between organizations we were able to achieve over $20 million in cost savings.

TAX SAVINGS

EFFICIENCY GAINS

By creating a distribution company with warehouse locations in selected state, state income tax liability which is driven by the dollar volume of sales from the Operating company through the distribution company and then to third parties was reduced by $92 million per year and was agreed by the management team.

Re-engineering initiative provided us with an opportunity to evaluate the effectiveness of our existing processes. Using the SCOR model to standardize our processes and with key investments in systems we reduced operating costs by 50%. RFID, a Warehouse Management System, DRP and VMI with order connectivity to FedEx in real time significantly improved our maturity and performance yielding better than six sigma results in quality and service level metrics.

RECOGNIZE CORE COMPETENCY

Step change improvement calls for making tough decisions and moving rapidly. Long discussions were made around what we believed our core competencies were as an organization and where we added strategic value.

It was quickly apparent to me that transportation and warehousing while critically important from a regulatory perspective was not our core competency. We were not the experts in the industry, nor did we have the capital to continually upgrade our capabilities to best-in-class performance. Competitive bidding allowed our company to find the right outsourced partners who were part of our long term strategy. Three supporting initiatives saved the company over $150 million a year while improving service levels by 3 points to 99.8% service.

• ASSET AND LIABILITY RESTRUCTURING

• STRENGTH AND WEAKNESS ANALYSIS

• LEVERAGE OPPORTUNITIES AND THREATS

Summarizing the benefits of the distribution and logistics transformation strategy and supporting initiatives yielded a total of $350 million in savings to the company. The synergy created by a successful merger is a dynamic energy. It arises from ongoing encounters between people and groups with different world views, knowledge, and experience, and it transforms the whole into something greater than the sum of its parts. But it never happens automatically. To harness the valuable differences between two merging companies and convert them into opportunities for innovation, performance excellence, and market leadership, the merging companies need a structured and methodical approach with a visionary leadership team.

As an executive in the Pharmaceutical, Energy and Industrial equipments industries for more that two decades, Jim Dixon offers an unbeatable record of performance, a visionary approach to strengthen your bottom line, and a passion for excellence in delivering shareholder value. Throughout his career, in senior executive positions with leaders in diverse industries, he has earned a track-record of success in managing complex business initiatives and achieving exceptional rather than expected results.

Jim DixoneMail: No1jimmyd@me.com

FIGURE 1-3:

TRANSFORMATION

LEADERSHIP

selected to lead this team and report back to me on the results and recommendations. With the results of this competitive analysis we were able to properly assess the gaps between our current maturity and performance against best-in-class companies. Maturity stage 4 organizations outperform lower tier organizations with 40% higher profitability. With further internal review and analysis from the benchmarking analysis, my team was able to identify detailed improvement opportunities relating to their functional roles based on people, process and system assessments using SCOR methodology. In total a list of 25 plus separate improvement initiatives figure 1-2, were identified and approved to help transform the organization and deliver the executive team’s aspiration relating to the performance of the business plan. A strategy and business case was approved in three parts over a five year period of time. The strategy phases included Operate, Optimize and Transform plans to achieve the performance improvement desired. I created a strategic planning framework with the advice and support of Dr. Rob Handfield, NCSU & Supply Chain Redesign along with Shashi Jina, ASC Consulting see figure 1-1.

FIGURE 1 -1: STRATEGIC PLANNING

I M P R O V I N G T H E P E R F O R M A N C E O F Y O U R E N T E R P R I S E TRACK RECORD LEADING STRATEGIC INITIATIVES TO REDUCE COST BY MORE THAN 50%, IMPROVE SERVICE, AND DELIVER MORE THAN $350 MILLION SAVINGS.

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Performance Monitoring & Review

Performance Planning

KPI for each objective

Monitor & Review

How are we doing?

Agree Timelines, Milestones, Resources

Prioritize Objectives/ Initiatives

Scope/ Benefit/Risk Assessment

Implementation

Who must do what?

Set Measurable Actions

Set Objectives

Excellence Indicators / High Level Goals

Objective Setting

How do we get there?

Audit & Assessment

Where are we now?

Identify Gaps

Environmental Scan

Strategic Direction

Where do we want to be?

Visioning

Strategic Thinking

Mission & Values

SWOT

FIGURE 1-2: SUPPLY CHAIN INITIATIVES

DEVELOP INNOVATE IMPLEMENT