NEWSLETTERArête

Vol 27

January 20201

Arête Vol 27

Dear reader, we are delighted to

bring you yet another edition of

Arête. We have endeavoured to

make each edition of Arête as fresh

and content rich as possible. This

time around we have added new

case studies and knowledge

nuggets, which we’re sure you will

find intriguing and enlightening.

Please feel free to share your

thoughts and views by writing to us at

knowledge@ssa-solutions.com.

Happy reading!

Knowledge Nugget: Stock Turnover Ratio

Case Study: Lean Deployment in a Utility service company

News: SSA conducts a DDMRP Leadership Session in Colombo

Chairman's desk

Snippets from our Global Forums: Lean Leaders’ Forum - 2019

Lean Tip: Andon (Japanese term for lamp)

Upcoming Events

News: SSA exhibits at 14th Edition of ELECRAMA –Greater Noida

2

3

7

1

5

6

4

9

Upcoming Event: ”Leaders Forum – Business Transformation 2020 – Thailand”

8

Chairman's desk

Dear reader, welcome to a new edition of Arete. In this edition, we feature a case study which talks about

how SSA helped a client improve their ‘Ease of Doing Business’ aspect in the course of Lean Deployment at

a utilities company in Oman. The knowledge nugget section features “Stock Turnover Ratio”, an important

metric for organisations, especially manufacturing units. In the Lean tips section, we have shared some

pointers on Andon (Japanese term for lamp). It makes me glad to share in the News, that SSA presented a

DDMRP Leadership session in Colombo, Sri Lanka which was attended by 25 business leaders. As

announced in the last edition, SSA will be organizing an international conference, ‘Leaders Forum –

Business Transformation’ in Thailand in January 2020. Also, I will be conducting a webinar session on

‘Inventory Optimization through DDMRP’ on the 24th of January 2020. I hope to interact with you and all our

other subscribers! Wish you a happy reading and, as always, I welcome your feedback!

Knowledge Nugget: Stock Turnover Ratio

Stock Turnover Ratio is an efficiency metric that indicates how effectively inventory is managed by a

company. It is calculated by dividing the Cost of Goods Sold for a Period by the Average Inventory

possessed during that period.

𝑆𝑡𝑜𝑐𝑘 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑅𝑎𝑡𝑖𝑜 =𝐶𝑜𝑠𝑡 𝑜𝑓 𝐺𝑜𝑜𝑑𝑠 𝑆𝑜𝑙𝑑

𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝐼𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦

Implications of Stock Turnover Ratio:

• Inventory, usually, forms a large chunk of a company’s assets in the

Profit & Loss statement. This inventory is however useful only if

converted to Finished Goods and sold. A high turnover ratio would

imply that the inventory is easily turned and sold.

• A low turnover ratio on the other hand would indicate that either the

company has piled up huge amount of inventory or is finding it difficult

to convert and sell the inventory. Either way, large amount of working

capital is being blocked in form of inventory and it’s carrying costs.

Inventory turnover ratios vary from industry to industry and need to be

compared with the industry benchmarks.Reference:

https://www.myaccountingcourse.com/finan

cial-ratios/inventory-turnover-ratio

Case Study: Lean Deployment in a Utility service company

Situation: The World Bank publishes a report on the economic profile of

countries. ABC Ltd, a major Omani utility service provider for electricity and

water, approached SSA with an aim to improve the “Ease of doing Business”

aspect of the company. It would also contribute to improving the economic

profile rating of Oman in further world bank reports.

Actions Taken:

• After carrying out initial diagnostic study, a Value Stream Map was generated.

• Steps to strengthen the value stream were identified.

• Process gaps and constraints were noted.

• The “as-is” process was re-engineered, and a new process across sectors was

proposed.

Goals/Benefits:

▪ Reduction in cycle time.

▪ Eliminate dependency on external factors.

▪ Improvement in throughput.

Situation – deep dive

World Bank publishes a report on economic profile

of GCC countries on ease of doing business.

To boost the economic profile, ABC Ltd wanted to

improve and “facilitate ease of connection”.

The profile was determined by Procedure, Time,

Cost , Reliability & transparency of Tariffs being key factors.

Approach

A Business Project re-

engineering project was

developed with 7 main areas of focus.

A project timeline of

about 7 months was

created and divided into 5 Categories.

1. Define

2. Measure

3. Analyse

4. Inspect

5. Control

Actions Taken – deep dive

Collection of VOCAssessment of

Qualitative surveyPerformance

Analysis

Quarterly ratings of

“Voice of Customer”

score of various

business verticals

compared to that of

previous years’.

• Procedures need to be

easy to setup.

• Time taken for these setups

should improve.

• Making the experience for

the customer hassle free; more important than

providing a connection

quickly.

Measurement of

process cycle time,

divided into several

phases “as-is”.

Time taken to check

“network feasibility” is high. It should be

looked at.

▌ Collection and Analysis of Data

Actions Taken – deep dive

▌ VSM and proposed process improvement

• A value stream map is

developed.

• Areas of priority are

identified. Improvements

are suggested to

strengthen the Value

Stream Map.

• Process Gap and

Constraints across

various domains are

listed.

• A re-engineered approach

has detected several

improvement to the process

“as-is”.

• Steps were taken to

eliminate the need of wiring

inspection completely.

• An approved electrician should calculate load and

wiring as per requirement or

getting the contractor

inspect wiring before it gets

“completion certificate”.

A consultant to be on

boarded and calibrated

to carry out customers’

need and ensure

minimum interaction with

end customer in the new

process.

Value Steam MapRe-engineering

ApproachProcess Proposal

Actions Taken – deep dive

▌ Re-engineering Approach (Transformative)

Re-engineered approach has

eliminated

major waste

sources.

Actions Taken – deep dive

▌ New Process Design

01

02

03

04

05

Step 01Consultant Apply for ED

Step 02

Automated Extension

application via integration

with MM

Step 03Consultant will apply for

simple NC before the final

stage of construction

Step 04MEDC will assign electricity contractor to

inspect, prepare all the technical scope

required, customer will receive SMS with the

payment details and link to pay the fees

Step 05Customer will apply for NC

connection (One day for

energization/activation)

1 Day as opposed to 12 days TAT

Benefits achieved:

Reduced Cycle time

70% reduction in cycle

time, from 12 days to 1

day, as no

inspection cycle and no

waiting for approval from

distribution

Controlled process

End to End process

Managed by us. No

dependency on customer

payment & contractor

work completion

Customer convenience

No Follows up in the

process

Enhanced Value Stream

Increased overall

throughput will ensure on

time revenue realization.

Lean Tip: Andon

Andon (Japanese term for lamp) is a visual management tool that highlights the status of operations in an area at a single

glance and that signals whenever an abnormality occurs.

An Andon can indicate

• Production status (for example, which machines are

operating, plan vs actual quantity etc.),

• An abnormality (for example, machine downtime, a quality

problem, tooling faults, operator delays, and materials

shortages), and

• Actions needed, such as changeovers.

A typical Andon, is an overhead signboard with rows of numbers

corresponding to work- stations or machines. A number lights

when a problem is detected by a machine sensor, which

automatically trips the appropriate light, or by an operator who

pulls a cord or pushes a button. The illuminated number summons

a quick response from the team leader. Coloured lighting on top

of machines to signal problems (red) or normal operations

(green) is another type of Andon.

Product A

Product B

Planned3900

Actual 3450

Line1

Line1

Line2

Line2

Line3

Line3

Snippets from our Global Forums: Lean Leaders’ Forum - 2019

Mr. NC, Founder Chairman, SSA Group of Companies, sheds light upon the subject of LEAN and

its increasing relevance in today’s rapidly growing industries.

News: SSA conducts a DDMRP Leadership Session in Colombo

SSA Sri Lanka held a DDMRP Leadership session in a

conference organised by MyBiz institution. Mr. NC

Narayanan, Founder Chairman – SSA Group, Mr. Vijay

Dhonde, CEO – SSA and Mr. Abhidnya Mahatekar –

COO, SSA shared the principles and approach of

DDMRP systems with 25 business leaders.

News: SSA exhibits at 14th Edition of ELECRAMA – Greater Noida

SSA exhibits at the 14th edition of ELECRAMA

organized by IEEMA (Indian Electrical and

Electronics Manufacturers' Association) at Greater

Noida. The exhibition saw participation from all the

leading and upcoming brands from the electrical

industry.

Upcoming Event: ”Leaders Forum – Business Transformation 2020 –

Thailand”

For enquiries, reach us on: kittiphana@ssa-solutions.com

Chasing The Next Big Thing!

SSA is proud to announce that we are organising a conference in Thailand!An evening designed to uncover the mystery behind building a thriving organisation to take business

to the next level.

Key Takeaways:

• Paradigm shift in business goal setting

• Learn the science of new age business transformation practices

• Overcome the fear of change through other success stories

• Create your own 3-year change management roadmap

• Quick fix to make 2020 a successful year

“Leaders Forum - Business Transformation 2020” –

Conference in Thailand

• 28th January 2020, 6pm to 8pm Indochina Time (ICT)

• Venue: Sofitel Bangkok Sukhumvit

Key Speaker:

Mr. NC Narayanan

Founder Chairman, SSA Group of Companies

BUSINESS SOLUTIONS TECHNOLOGY INTERNATIONALSPECTRUM

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