In-basket Exercise
Instructions to the participants
1.0 You are promoted to the position as SBU Head / CEO of Consumer Products Division of Asiatic Pharma Limited. You have already spent about 6 months learning the new job. You have just returned from your brief holiday and today you have reported back to work.
2.0 As usual your mail box is full and you are required to take a number of decisions. The mail box contents are attached.
3.0 You may first classify all the papers as High, Medium and Low priority. – Task 1
4.0 Take decisions on high priority items. – Task 2
5.0 Your responses like “asking for more details” or “pass it on to the colleagues” do not qualify for scoring.
6.0 You can draw your own assumptions about the company in which you are required to take decisions.
7.0 MOST IMPORTANT:
You are required to send your recommendations immediately on the following items of the mail box; which will be discussed in the next top management team meeting.
7.1 Mini Dairy Project.
7.2 BINODIA
Asiatic Pharma Ltd – Consumer Product Division
Organization Structure
You have the following organization set up.
Response sheet for the participants
TASK 1
Please classify all the papers / items in the file in three categories: High Priority, Medium Priority and Low Priority.
- 4 -
Item No. 1
Asiatic Pharma Ltd
CEO
Sub: Mini Dairy Project
Task force meeting will be held in the next two days at 3 p.m. This was already communicated to you. Additional copy of the feasibility report is enclosed.
Please send your personal recommendations immediately, so that we can discuss the same in the above meeting and take a final decision. We expect you to take charge of this new project in addition to your current responsibilities.
M.D.
PROJECT PROFILE
MINI DAIRY (MILK PROCESSING PLANT)
1. GENERAL DESCRIPTION:
The Mini-Dairy capable of processing 3000 liters of raw milk per shift into different milk products is supplied, pre-assembled & ready to operate, to be installed in a locally constructed building.
The design specifications and supervision for this building can be provided for during the construction till acceptance of the building by the client.
Alternatively it is possible to supply this dairy in remodeled containers which are especially adapted to the industrial requirements. Due to the severe climatic conditions, these containers will have to be assembled inside a locally built structure/ production hall.
This Dairy production unit, will be based on advanced technologies, allowing optimal utilization and integration between equipments, structures and human resources.
Processing technologies, work routines and equipment have been especially developed and adopted for these mini-dairies. All these elements will assure, year round continuous operation, production/ processing, maintenance, etc.
Due to the fluctuations in the milk-supply to the dairy it is possible to use milk-powder to supplement the daily production capacity.
The proposed small-scale Dairy provides a sound basis for a wide range of products, but in view of the small-scale of production it is recommended to limit production in the early stages to a small number of products.
With relatively small additional investments, it would be possible to introduce at a later stage additional products such as hard yellow cheese.
2. PROCESSING CAPACITY:
3,000-liter milk (3.7% fat content fresh milk and reconstituted milk) per day, one shift.
3. PRODUCTS:
a. Consumption Milk (1 – 1.5% fat content)
b. Soft White Cheese (Quark)
c. Sour Cream (10% fat content)
d. Yogurt (1 – 1.5% fat content)
e. Butter (80 – 82% fat content)
Other products may be evaluated based on market demands and preferences.
4. PACKING:
One semi-auto. bag filling machine for liquids.
Capacity: 360 – 400 units/ hours (500 cc./1000cc. bags)
One semi-auto. cup filling machine for Soft Cheese, Yogurts, Sour cream, etc.
Capacity: 1,000 units/ hour (150 cc / 500 cc cups with clip on lids)
5. PRODUCTION TABLE:
Type of Product Quantity of Milk Quantity of Prod. Packing
Cream Cheese 1600 ltrs. 350 kg. 250 gr. Plastic cont.
Salted White Cheese 1100 ltrs. 160 kg. 1/2 kg
Sour Cream 60 ltrs. 60 ltrs. 200 ml. Plastic Cups
Yogurt 300 ltrs. 300 ltrs. 125 ml. Plastic Cups
Butter 30 kg. 1/2 kg.
Please note that the product range for a mini dairy project in India might be different and will be discussed with the client.
NOTE:
The above capacities are based on a one-shift operation and can be substantially increased without major additional investments.
It is an option to use the equipment / lines in order to produce milk based drinks and other products, such as choco and / or soft drinks based on reconstituted fruit juices, etc.
6. SPECIFICATIONS AND STANDARDS:
This proposal is for the standard Dairy but it is also possible to supply the unit according to specific requirements by the client.
7. The survey of the local market on the variety of diary products have already been carried out. The general conclusion is that there is a good market potential for diary products if quality of products can be matched to global standards.
INVESTMENT COST
The total investment cost of the project is estimated at Rs. 200 lakhs as follows:
APPLICATION OF FUNDS
Sr. No. Particulars Rs. in lakhs
1. Land (1 Acre including development cost) 10.00
2. Building (4000 sqft Built-up @ Rs. 500/-) 20.00
3. Plant and Machinery (including assembly & guidance) 120.00
4. Power connection & other infrastructure 10.00
5. Delivery Van 15.00
6. Preoperative Expenses 15.00
7. Margin for working capital 10.00
200.00
MEANS OF FINANCE
Sr. No. Particulars Rs. in lakhs
1 Promoters equity 60.00
2 Term loan from financial Institution 140.00
TOTAL 200.00
PROFITABILITY ESTIMATE
A) SALES TURNOVER
PRODUCT QTY PRICE SALES VALUERs. (in lakhs)
1. Cream Cheese 350 kg. 100.00 126.00
2. Salted White Cheese 160 kg. 125.00 72.00
3. Sour Cream 60 kg. 75.00 16.20
4. Butter 30 kg. 115.00 12.42
5. Consumption Milk 2000 lit 12.00 86.40
Total sale per Annum 313.02
Annual Working days 360
Annual Sale 313.02 lakhs
B) EXPENDITURE
1.Cost of Milk (3000 lit / per day @ Rs.12/-) 129.60
2.Consumables 21.00
3.Utilities (Power, Water etc.) 8.00
4.Manpower Cost 15.00
5.Overhead Cost 16.00
6.Financial Cost 30.00
7.Selling and Distribution 30.00
8.Depreciation 30.00
259.60
Net Profit 53.42
1. Break even point @ 64% capacity utilization can be achieved in the second year
2. Gestation period - 16 to 18 months
3. Pay-back period - 3 1/2 years.
Your Recommendations with reasons.
Item No. 2
Asiatic Pharma Ltd
CEO
Last week we had a meeting in which we had agreed to finalize the targets for the coming 12 months in this week.
Please come fully prepared, so that we can finalize the targets and review process etc. day after at 2 P.M. in my office.
CRITICAL SUCCESS FACTORS TARGETS KEY PERFORMANCE INDICATORS REVIEW PROCESS
M.D.
Item No. 3
Asiatic Pharma Ltd
150406
TELEGRAM
AWAITING MONEY TRANSFER FOR THE EQUIPMENT PAYMENT TO US MACHINERY COMPANY LTD FOR OUR NEW MACHINES. AM UNABLE TO SHIP THEM WITHOUT PAYMENT. YOUR GUIDANCE PLEASE.
REGARDS
AS
Item No. 4
Report on Population distribution in India
Area - sq. km. 3287273
No of states 25
No of Union territories 6
No of towns 58702
No of villages 938374
Urban and Rural population
Urban - 26%
Rural - 74%
Tea Main Distributors - 8399 all over India.
DDTE Market Share - 32%
No in market share - 2nd
Item No. 5
Asiatic Pharma Ltd
170406
Note from Maushami
Have received two tickets for you to Sri Lanka - one dated 220406 (to Colombo) and one dated 250406 (to our plantation in Sri Lanka). I can't make out why two tickets have come. Please advise.
Item No. 6
Billoria Fencing Company LTD
Ref: AEL/04/955
280306
Final Quotation
GM OPERATION
Sub: Final quotation
As discussed we are sending our final quotation for the supply of wire and posts for your requirement.
Wire - per meter - Rs. 33
Post - per Post - Rs.98
Installation Charge - Rs. 947 per 100 meters
This has been calculated based on your commitment to release full payment of the material 1 week in advance. Also we have given these bulk rates due to the quantity you have confirmed which is as below
Wire - 300 kms
Posts - 20000 Nos
The prices are valid only for the next fifteen days.
From,
Marketing Manager
Billoria Fencing Company.
Item No. 7
Asiatic Pharma Ltd
Consumer Product Division
120406
CEO
This is for your information that we have lost 6% market share in DDTEA during the last quarter. This is alarming, as there has never been such a steep drop. This may result into a drop of about 60 crores in our projected turnover and subsequent drop in profitability and cashflow.
Signed
GM Marketing.
Item No. 8
CEO
Interesting stuff - hope you love this.
Canoe racing … sound familiar?
A Japanese company and a California company decided to have a canoe race on the Columbia River. Both teams practiced hard and long to reach their peak performance before the race.
On the big day, the Japanese won by a mile.
Afterwards, the California team became very discouraged and depressed. The management of the California Company decided that they had to find a reason for the crushing defeat. A “Measurement team” made up of senior management was formed to investigate and recommend appropriate action.
Their conclusion was that the Japanese company had 8 people rowing and 1 person steering, while the Californians had 1 person rowing and 8 people steering.
So the management of the California company hired a consulting company and paid them incredible amounts of money. They advised that too many people were steering the boat and not enough people were rowing.
To prevent losing to the Japanese again the next year, the rowing team’s management structure was totally reorganized to 4 steering supervisors, 3 area steering superintendents and 1 assistant superintendent steering manager. They also implemented a new performance management system that would give the 1 person rowing the boat greater incentive to work harder. It was called the “Rowing Team Quality First Program”, with meetings, dinners and free pens for the rower. “We must give the rower empowerment and enrichment throughout this quality program”.
The next year the Japanese won by 2 miles. Humiliated, the management of the California company laid off the rower for poor performance, halted development of a new canoe, sold the paddles and cancelled all capital investments for new equipment. Then they used the money saved by giving a High Performance Award to the steering managers and distributed the rest of the money as bonuses tote senior executives.
Too long in a “Consultancy firm”
1. You ask the waiter what the restaurant’s core competencies are.
2. You decide to re-organize your family into a “team-based organization”
3. You refer to dating as test marketing
4. You can spell “paradigm”
5. You actually know what a paradigm is
6. You understand your airline’s fare structure
7. You write executive summaries on your love letters
8. Your Valentine’s Day cards have bullet points
9. You think that it’s actually efficient to write a ten-page presentation with six other people you don’t know.
10.You celebrate your wedding anniversary by conducting a performance review.
11.You believe you never have any problems in your life, just “issues” and “improvement opportunities”
12.You calculate your own personal cost of capital
13.You explain to your bank manager that you prefer to think of yourself as “highly leveraged” as opposed to “in debt”
14.You end every argument by saying “let’s talk about this off-line”
15.You can explain to somebody the difference between "re-engineering", "down-sizing", "right-sizing", and "firing people".
16.You actually believe your explanation in number 15.
17.You talk to the waiter about process flow when dinner arrives late.
18.You refer to your previous life as "my sunk cost".
19.You refer to your significant other as "my co-CEO".
20.You like both types of sandwiches: ham and turkey.
Item No. 9
Asiatic Pharma Ltd
Consumer Products Division
Notes for Today
Note from Maushami
News Reporter from THE TIMES OF INDIA has been trying to contact you, to make a write up on our organization. He wants you to contact him urgently.
Trade Team from South Africa is already being briefed in our Conference Room, by our DGM Technical. He desires that you also address the Trade Team for a while, as there are good opportunities of business development in South Africa.
Item No. 10
Asiatic Pharma Ltd
FAX
160406
FROM
EARL GREY COMPANY - London
URGENT: SHIP FIRST LOT IN THE NEXT TWO DAYS. ACKNOWLEDGE AND CONFIRM.
PRODUCTION HEAD UP
STEVE.
Item No. 11
Asiatic Pharma Ltd
20th April, 06
URGENT AND CONFIDENTIAL
CEO
We are launching the public Issue on 30th June 06. Please ensure that everything is in order at the Factory and that we are not in the newspapers for any wrong reasons. I don’t want any wrong signals to be passed on to the market. This is very crucial for us as a company.
M.D.
Item No. 12
Asiatic Pharma Ltd
170406
CEO
URGENT AND CONFIDENTIAL
Yesterday in Plant No. 2, Ram, our Ex-Trade Union leader had met with an accident. The doctor who is attending to him in the hospital feels that Ram will lose his right leg permanently. The Union has taken up this issue and they want compensation. Although, the accident was caused due to negligence, all the staff members are sympathetic towards Ram. The move is to get a huge compensation and job to his wife who is not educated. Union wants to see you immediately.
Production Manager.
Item No.13
Asiatic Pharma Ltd
170406
Message from Maushami
Data to be sent to HR Dept: By 30-04-06
TRAINING NEED IDENTIFICATION OF THOSE WHO REPORT TO YOU (Refer to the organization chart)
NAME PRESENT ROLE FUTURE ROLE(if constituted) WHAT KIND OF TRAINING
Item No. 14
Asiatic Pharma Ltd
VOUCHER FOR PAYMENT
Enclosed bills for Payment.
Total Amount Rs. 5507/-. Expenses incurred on account of Entertainment's to Company customers.
Please approve.
ACCOUNT ASSISTANT
Item No. 15
Asiatic Pharma Ltd
CEO
PRODUCTION PLANNING 2007-2008
We are considering the different aspects of bottlenecks, barriers, etc. for achievement of planned targets in our production units. I want you to prepare a note for discussion in our next strategic planning meeting to be held on 150506. Please confirm your participation.
In this meeting, we will also examine our future direction.
Please ensure that you EMAIL details to me as soon as possible.
M.D.
Item No. 16
Asiatic Pharma Ltd
Cost Sheet
FOURTH QUARTER 2005 FIRST QUARTER 2006
SALES 100 100.0
MATERIAL COST 35 37.0
EMPLOYEE COST 15 17.5
POWER, FUEL 9 9.0
COMMISSION 5 5.0
MAINTENANCE 7 10.5
OTHER 15 14.0
TOTAL 86 93.0
MARGIN 14 7.0
100 100.0
Item No. 17
Asiatic Pharma Ltd
CEO
170406
COST REDUCTION MEETING
The Meeting will be held on next Tuesday at 10 am. You are requested to contribute effectively in this meeting. Appreciate your giving points for discussion in advance. Please email.
TASK FORCE
Coordinator.
Item No. 18
Asiatic Pharma Ltd
CEO
BINODIA
A team has visited “BINODIA” to find out the business prospects. They have prepared a detailed report. Copy enclosed. You are requested to send your responses to me by 220406.
1. A chart comprising of relevant data from the report.
2. What are the strengths of this country?
3. What are the immediate business opportunities in this country?
4. What are the long-term business prospects?
5. What are the business prospects for a Pharma Company?
BINODIA
The Country
Binodia has an area of about 300,000 square kilometers and at last years sensus a population of 22 million, growing at about 2.5 % p.a. About two-thirds of the area lies in the plain which is bounded by the sea to the west. To the east of the plain lies the broad mountain area which covers the remaining third of the country, along the crest of which runs the frontier which isolates Binodia from white-ruled Brookstad, except for the broad valley created by the major tributary of the river Binod which feeds Lake Lava and its new Hiwata hydroelectric scheme. The valley provides a mountain crossing for the road and single track rail links between Brookstad and Binodia, which create an important source of revenue for Binodia and form the main access to and from the isolated plateau which forms the under-developed west of Brookstad. Binodia’s commercial contacts with the Islamic Socialist Republic of Jehadaland to the North and to the People’s Republic of Marxia to the South are currently limited by reliance on coastal shipping, as the colonial era left border areas devoid of roads and railways, while the cataracts on the Jehadaland border prevent river traffic.
The area of the capital, Igorata, contains 8 million of Binodia’s population and this figure is expected to almost double in two decades. An even faster population growth is expected in the region of the booming industrial city of Illogos, favoured by good communications and natural resources, where the 3 million population is currently growing at twice the rate of Igorata.
The Economy
The year 0 economic performance showed a GDP of Binodian Dollars ($b) 19 billions, about $b 850 per capita, with a GDP growth rate just under 5% p.a. Exports were $b 5.02 m, overbalanced by $b 5.87m important of which half were imported crude oil. The recent currency realignment leaves the official exchange rate at $b 1.03 to the US Dollar, currency controls exist but are not severe enough to produce a significant currency black market or unofficial exchange rate. Allowing for purchasing parity, the GDP per capita is assessed as about $US 1800.
The traditionally, Binodia has been an agricultural country with an export trade mainly in cereals and coffee conducted through Igorata port. The sedimentary rocks and alluvial deposits of the plain give way to the older rocks which form the mountains and extend across the north of the country to Petit Island. Tin is present on Petit Island, and is produced from a rather antiquated pre-colonial mine for export to Europe and Japan. A Uranium open pit in the foothills near Judytown was closed as uneconomic 20 years ago, but some copper is mined south of the river above Lake Lawa. In the foothills to the south of the lake there appears to be coal deposits, not yet exploited except by local hillmen for village use.
The country does not yet produce oil commercially, and onshore prospects seem slight. Offshore, there appears to be large potential reserves. Exploration to date handled by the Binodian State Oil Company (BINODOIL) has been unsuccessful, but promising offshore concessions have recently been opened for survey to Binodian-based oil majors.
Most commercial traffic is by coasters up to 3000 dwt which can also navigate upriver as far as Illogos. The river Binod allows year-round barge traffic as far as Judytown. One dual-carriageway round Igorata bay and down the Delha peninsular, and east of Ilogos alongside the single track railway to the Brookstadian frontier. Both the Eastern and Western blocks, however, are making bids to construct a grandiose from Jehadaland to Marxia. The location of the highway’s crossing point on the Binod is hotly disputed between Igorata and Ilogos.
The Eastern Block-build Hiwata Hydroelectric scheme at the outlet of lake Lawa is expected to give impetus to village industries in the mountains and foothills, besides rendering the Ilogos area less dependent on fuel oils shipped upriver from the Gama refinery installation.
Retail trade and local banks are mainly in the hands of overseas merchants, sometimes associated with and frequently ‘fronted’ by long established Binodian land-owning families from the region of large estate close to the capital. Government may introduce legislation to ‘rationalize the situation’. Most firms operating in Binodia depend on this group for brokerage and financing, and use their talents as agents, dealers and contractors.
The People
About 19 million of the population live in the plains and constitute a homogenous ethnic group, although lifestyle vary from the Northern nomads who extend across the Jehadaland border, through the fishermen and seamen of the coast and lower Binod and the peasantry and city dwellers of the central plain, to the sparse population of the Southern forests on the Marxian frontier. The population of the central plain includes an emerging middle class of landowners and of professionals and business people in the urban areas. They place great value on their children’s education, fostered originally two generation ago by mission schools, which still exist as an elite private educational sector. A colonial college taking external University of London degree in law and arts subjects was extended at independence to the University of Binodia with additional facilities of Physics and Chemistry. The degree, however, are considered less reputable than those awarded abroad. Many Binodian graduates and lawyers produced are absorbed into government service and politics. A government programme “Homeward Bound” attempts to attract scientists, technologists and engineers back to Binodia.
The culture of the plains people respect the wisdom which comes with age. There is a statutory retirement age of 65, and the majority of the business and community leaders are now in the 55-60 age band. The ‘Better Child Care’ programme which began 30 years ago resulted in a population bulge with half the population in the late twenties / early thirties and 20% in the late tens / mid-twenties. The programme changed early life expectancy dramatically, and the late life expectancy is expected to respond to the relative absence of childhood malnutrition and chronic disease among those who are now aged up to thirty-five.
Family life is matriarchal among both plainsmen and mountain people, with the women usually controlling the family budget (and doing a substantial amount of work). Although the university population contains an increasing proportion of women, currently 10%, there are few women in executive posts in industry, commerce, and government and feminist movement is developing, led by women members of profession like law and medicine, demanding more equal opportunities.
The number of mountain dwellers are uncertain but probably exceed million. Known as “hillmen” to the plain dwellers, they are a different ethnic group, which extends over the frontier into Brookstad. They were neglected before independence, except for a few isolated missions run by small sects. The presence of the government is still evident mainly in the tax collector, the recruiting officer and the army pensioner. This is also obvious in the Binodian armed forces, whose crack troops and technical crops tend to be predominantly hillmen with a reputation for decisive, even ruthless, action when required. The mountain tribal structure is matriarchal; the main tribal grouping is the Callovians, around Lake Lawa but extending East to Brookstad.
A Higher technical School was established at a mission in the Callovian area about 10 years ago, and has produced many good craftsmen / artisan, the best of whom have gone overseas to become graduate engineers of higher value to Binodian Industry than the pure scientists produced by the University of Binodia located in Igorata. Some have returned to their tribes and are teaching civilian skills, particularly to soldiers who might otherwise turn to traditional intertribal banditry, raids on the plains villages whose cultivation encroaches on winter pasture in the foothills, or mercenary service on Brookstad’s border with Marxia. Government approval is awaited on a proposal to raise the Higher Technical School to University College of Technical status, but has been delayed by objections from Interalia, the National University.
The Government
“Chairman” Aurelios (his preferred title) holds the Life Presidency and also heads a cabinet of young plainsmen, originating from the commercial / land-owning classes or fairly interactive administrative positions in the officer corps. The top hierarchy they represent are still steeped in the free market entrepreneurial spirit which created them. The Chairman’s own background is a leading Igorata family of landlords and merchants. He completed his legal education in the “mother country” in colonial times, and returned to join and eventually lead the comparatively peaceful struggle which resulted in independence for Binodia during the decade following World War 2. His first wife fulfills a magnified version of the role of a leading family matriarch, as Vice-Chairman and Ombus person. There is no obvious successor, but the Chairman, aged 63, seems to enjoy good health.
The unicameral parliament approves his decrees, officially, only one party “The Binodian People’s Congress”. The party contains a spread of opinions represented by factions ranging from the Blues, traditionally favouring an open market economy and strong in the agricultural areas to the Greens favouring a greater degree of state intervention, drawing support from the urban areas, and well represented in the officially-approved trade unions. Marxism undoubtedly influences the thinking of younger Green politicians and union leaders, who have social contacts with ‘Eastern Loc technicians’ working on foreign aid projects which may have contributed to a recent public split between elements looking towards Moscow and towards Peking.
The mountain tribes tend to ignore Binodian politics, operating through the strong family links cemented by tribal intermarriage, which extend into the NCO and lower commissioned ranks of the technically based public services like the National Airline, Binodair, the State Railways, and the Binodian Electricity. Undertaking which operates the recently commissioned Hiwata scheme and the distribution network. Although not represented in the cabinet and with only two members in parliament, mountain-born technocrats have tended to support the government in the times of stress – for example, when the Army Engineering Corps plus civilian technical staff maintained services during an unsuccessful strike by the left-wing led Utility Workers Union.
No comments:
Post a Comment