Business Modelling on Personnel Contribution

London, March 2016

Greg Tzavelopoulos, Head of Corporate Performance Management, Pipelife International GmbH

CPM / Activity Based Costing Business Modelling: on Personnel Contribution

Business Modellingon

Personnel Contribution

Personnel Cost

Change Management

SharedServices

Time Allocation

Personnel Development

Value Chain Analysis

Increase Quality Reduce Costs

CPM / Activity Based Costing

40 20 20 A

30 20 10 A

10 10 B

5 2 3 C

10 5 5 C

3 3 C

2 2 C

Personnel Time Allocation

Marketing/SalesDirect Sales

Contact Customer

Visit Customer

Sales Rep

Management

Sales AdminMaintain CRM

Projectsfor

Productsfor

Systems

ReportingReport ResultsImprove Data

Quality Benefits

Cut low VA tasks

Focus on high VA tasks

Measure contribution

Manage Time

Set Org. Targets

CPM / Activity Based Costing Personnel Development

FuturePresentPast

KPIs

Manager

Position

Activities

Projects

Improvements

Personnel

Soft Skills

Hard Skills

Experience

Training

Rol

eC

apac

ityPe

rfor

man

cefor workers, employees,

ext. consultants

Registered HR data

Registered ABC data

Personnel development

Future contribution

Career Plan

KPIs

Each job position requires

a certain minimum skillset Quality Benefits

Track personnel skills

Plan future tasks

Delegate projects

Fulfill career path req.

CPM / Activity Based Costing Resource Value Chain Analysis

Purchase Production Warehouse Delivery

Adm

inist

rativ

eO

pera

tive 60

100

Customer

61

64

67

70

72

73

74

75

84 88

86

93 SalesCostProfit

100 93 7

Quality Benefits

Track value chain

Product cost analysis

Optimize operations

Question processes

Mgmt

CPM / Activity Based Costing Personnel Cost

FTE Total Sales Purchase Prod/ion Logistics Admin2014 2013 2014 2013 2014

  Total 63 65 963.000 953.000 169.530 79.800 222.490 65.360 425.820

Management

General Manager 1 1 100.000 97.000 30.000 15.000 20.000 3.000 32.000

Finance Director 1 1 76.000 74.000 3.800 3.040 1.520 3.040 64.600

Sales Director 1 1 74.000 72.000 49.580 3.700 5.180 2.220 13.320

Prod. Manager 1 1 72.000 70.000 2.160 2.160 40.320 2.160 25.200

Sup. Chain Man. 1 1 65.000 64.000 1.950 16.900 3.250 29.900 13.000

White Collar

Controllers 2 2 52.000 52.000 1.040 1.560     49.400

Accountants 4 4 46.000 46.000 46.000

IT Experts 1 1 47.000 47.000 47.000

Purchasers 1 1 42.000 42.000 34.440 1.260 6.300

Sales Force North 7 8 48.000 48.000 38.880 1.440 1.920 5.760

Sales Force South 12 11 52.000 52.000 42.120 1.560 2.080 6.240

Sales Desk 5 5 43.000 43.000 43.000

HR Team 1 1 39.000 39.000 39.000

Office Mngment 1 1 35.000 35.000         35.000

Blue

Collar

Shift Leaders 3 3 40.000 40.000     40.000    

Production Labour 12 13 32.000 32.000 32.000

Maint. Leader 1 1 40.000 40.000 40.000

Maint. Workers 3 4 31.000 31.000 31.000

Warehouse 5 5 29.000 29.000 5.220 23.780

Cost Benefits

Monitor:Full resource costCost developmentCost per process

Plan accurately the cost of new recruits

Optimize process cost

CPM / Activity Based Costing Change Management

Automate Production

Outcome

Improve Current Workflows

Automate/Eliminate Low Value Added Tasks

unloading unloading

Cost Benefits

Compare human/machine cost

Eliminate low VA tasks

Automate processes

Focus on productive tasks

Simplify workflows

CPM / Activity Based Costing Shared Services

Cost Benefits

Measure cost of doing things multiple times

Redesign workflows

Reduce time required

Reduce cost

Measuring quality of services

Increase quality

CPM / Activity Based Costing Organisational Behaviour

Complex systemscould be simpler

than simple people

Simple but hardComplex but easy

MetricsConflicts

A strategist defines what to doand a project manager how to do it

Resistance vs Acceptance

Product vs Sales

Complexity vs Simplicity

Effect = Quality x Acceptance

Time = Quality + Acceptance

IT Complexity = User Simplicity

CPM / Activity Based Costing

Profitability

Indirect Cost Analysis

Model Mechanics

CC 01 CC 02 CC 03 CC 04 … CC 99CC 04

Delivery Sales AdminProduction Purchase

Direct Analysis

Gross SalesDiscountBonusFreight Rev.Freight CostMaterialEnergyPackaging

(per product and customer)

CPM / Activity Based Costing Closing

Thank you for your attention