Operations and Supply Chain Infrastructure

Most businesses that start as small businesses with limited resources tend to do what it takes for the sake of the business, wearing multiple hats and creating ad hoc tools, processes and systems that only they understand. As the business grows and the team expands, the lack of proper operations infrastructure, processes and tools puts an undue stress on the team jeopardizing the health of the business. This starts a vicious cycle of ever increasing complexity as the inherently inadequate tools are bent to the point of breaking, creating more chaos which leads to more changes in the tools. For the management meanwhile, it becomes difficult, if not impossible, to manage growth as they lose business performance transparency. Reports become routinely delayed. Even when received, they lack clarity and accuracy. At this point, the business either collapses back to a smaller state, goes out of business, or the business undertakes a massive overhaul of the system, usually with a large ERP/CRM solution that exceeds all cost estimates, fails to deliver half of the promises, but allows the business to limp along.

Chetanya’s principals understand this, having been through similar cycles in their own businesses. The key to a successful growth strategy is to build the infrastructure that can support growth before you need the infrastructure. You don’t necessarily need the large enterprise solutions to support growth, you need processes, procedures, accounting systems and tools that support your business and the growth you anticipate.
Some of the key areas include:
  • Work In Process (WIP) adjustments – If your business routinely receives advance payment for work to be done over several months, or your business does work which is then invoiced at completion or in progress/milestone payments, your monthly financial reports will always be out of sync unless your implement a coherent Work-In-Process (WIP) accounting entries. This will give you a clearer picture of profitability and an early warning to problems that may be percolating in the business.
  • Contract – Project Management: If your business operates on Contracts / Projects, each project requires a strong project management system that tracks everything beginning with estimates, going through project execution tracking buy-outs, labor, material, schedule on an ongoing basis with appropriate feedback mechanisms to flag deviations. Critical documents include: Scope, Budget, Division of Labor (DOR), work breakdown structure, labor and resource plan, Quality Assurance plan, safety plan and change order process among others. Also critical is tracking all costs through the accounting system and managing the same against budget. Chetanya has developed a Project Management Playbook that help manage and track every step of this process. This may be deployed with or without a project management tool.
  • Manufacturing, Inventory Management and COGS: If your business is a manufacturing business, inventory and labor management as well as recognizing COGS is a very critical part of the process in addition to the actual manufacturing process design. On the manufacturing process design one must consider the manufacturing steps and design a cell manufacturing or streamlined assembly line type process that is most suitable for the product being manufactured. On the inventory management side, everything starts with detailed manufacturing design documents that establish the hierarchy of purchased parts, manufactured parts, sub-assemblies and assemblies that go into the manufacture of the product including variations therein. This has to then be replicated in the accounting system so as to track costs, inventory, shipping, receiving, COGS, AP and AR. Chetanya has experience in designing these systems and processes to optimize manufacturing with transparency.
  • Quality Assurance and Safety: As a business grows and starts engaging with larger organizations, it is expected that the business has a robust Quality Assurance and Safety plan and process in place. Often times, small organizations due to its organic growth, find themselves lacking on this front. Other basic organizational things that are also critical include an Employee Handbook and a robust employee review process. In some cases, an incentive plan is also warranted. Chetanya has the experience to help you establish this type of basic organizational infrastructure to support growth and opportunities.
Coupled with a manufacturing business is the constant drive to optimize the supply chain. This is not necessarily a drive to lower costs, but rather to take a holistic view of the supply chain. The great adage in the industry is that there are three variable in your supply chain price, quality and delivery – pick two. The implication being that you can only achieve performance in any two of the three parameters at the same time. So, if you want good price and good quality, you must suffer long deliveries. If you want good price and good delivery you must sacrifice quality. If you want good quality and good delivery you must pay more! However, that is not always the case. If is possible to optimize for all three.
Some of the variables to consider are:
  • Manufacture in-house or outsource? This is true for parts, sub-assemblies or even entire assemblies
  • Purchase in-country or source from overseas? What does this do to quality and delivery? Do you need to carry more inventory – which adds to cost.
  • Just-in-time or build inventory
  • Labor v/s automation – cost benefit analysis
  • Fixed costs v/s variable cost model. Initial setup v/s transitional setup
Chetanya has the experience and network to help you work through various supply chain scenarios and setup an optimized, flexible and scalable solution.

Business Development and Commercialization

The single most important function in a business is generating Revenue. All other activities flow from this. Revenue generation comes from sales. However, sales comprises of several facets that are critical and interdependent with varying levels of importance based on the type of business. Sales activities can generally be classified into “inbound” and “outbound”. Inbound sales are generated from inquiries that come to you. These inquiries could be a result of a) your marketing efforts (print, online, Social Media and SEO), b) prior contact or connection with a customer (repeat business) or c) word of mouth. All of these activities may be classified under the umbrella of “Marketing”. Outbound sales, on the other hand, are generated by calling prospective and existing customers either directly (direct sales) or indirectly (indirect sales network). Cold calling and prospecting is a critical part of outbound sales activities as is the management of existing accounts/customers. Another critical part of Revenue generation is Business development.