Context:
The Client is an Indo-German joint venture that owns its manufacturing factories for tufted coir mats, woven jute rugs, and molded rubber/polypropylene mats. The company is the largest exporter of doormats from India, exporting 2500 container loads to over 85 countries. However, the company faces challenges in managing its working capital, which affects its financial stability and growth prospects. The company wants to innovate its system or process design to find a solution to these challenges.
The Ask:
The client wants to understand its existing business process/systems, map the value streams of each business process, identify the core sub-processes that add maximum value, perform a root-cause analysis of key problem areas, identify the core value streams of strength, and improve the core business process while identifying opportunities to offset the non-core business process.
The Activity:
To address Cocotuft’s working capital challenges, the first step was to understand the existing business process/systems. The company had multiple processes, including production, sales, marketing, finance, and logistics. The value streams of each process were mapped to identify the core sub-processes that added maximum value. The production process was identified as the core process, as it was the main source of revenue for the company.
A root-cause analysis was performed on key problem areas related to working capital management, including inventory management, accounts receivable, and accounts payable. The analysis revealed that the company faced challenges in managing its inventory levels, which resulted in higher storage costs and tied-up capital. The company also faced challenges in managing its accounts receivable, which impacted its cash flow and working capital.
The core value streams of strength were identified, which included the company’s manufacturing capabilities, design capabilities, and distribution network. To improve the core business process, the company focused on optimizing its production process to reduce lead times, increase efficiency, and reduce waste. The company also invested in technology to automate inventory management, which helped in reducing storage costs and improving inventory turnover.
To offset the non-core business process, the company decided to outsource its logistics and warehousing operations to a third-party logistics provider. This helped the company to reduce its fixed costs and focus on its core business operations.
The Innovation:
The client’sprocess innovation focused on optimizing its core business process, identifying opportunities to offset the non-core business process, and leveraging technology to improve working capital management. The company’s investment in technology helped in automating its inventory management, reducing storage costs, and improving inventory turnover. Outsourcing logistics and warehousing operations helped the company to reduce fixed costs and focus on its core business operations. The process innovation helped the client to improve its financial stability and growth prospects by managing its working capital more efficiently.
Anticipated Outcome:
The process innovation helped the company to overcome its working capital challenges by improving its core business process and identifying opportunities to offset the non-core business process. The company’s investment in technology and outsourcing logistics and warehousing operations helped it to manage its working capital more efficiently, which improved its financial stability and growth prospects. The process innovation also helped the client to stay competitive in the market and meet the evolving needs of its customers.
Testimonial
https://drive.google.com/file/d/1lxI75yrFklPzQ7ag12DMc-fk7lErRpIV/view