Strategy By Ellis Pitt Consultant Wardell Armstrong

1. Some observations
& predictions…

4. Governments & Policymakers
• No coherent macro-economic policy
• Ad hoc changes in micro-policy
• A history of ‘sectors’ and ‘winners’
• Little understanding of the role of the state
• Short-term view
• Laissez-faire approach to wealth creation

5. Priorities for the state…
• Link the networks
• A catalyst for action
• A customer for innovation
• Joined-up thinking between departments
• Stronger price signals
• Facilitate and subsidise investment
• Courage and confidence required

6. Distribution Channels Customers & Trends
changing faster than ever before,
supplier-client relationships can be customers buy solutions not products,
volatile and difficult to protect, more influenced by multiple sources,
channels than ever, alliances are lifecycles shortening, expectations
king, loyalty difficult to achieve increasing
Competition Changes to
supply massively outstrips
demand, the next threat cost-structures
to your business may technology redefining costs,
come from an unexpected
source labour and materials costs declining,
energy likely to increase or be volatile
Legislation Economic & Political
rarely happens overnight, tariffs and quotas dismantled,
varies widely, can be fickle, protected markets become free-
generally reactive for-all, volatile cost of money
(capital movement, not trade)

7. Changes in UK interest rates 1980–2010
17
14.8
13.8
7.5
8.5
7.4
5.1 0.5

8. Reduced cost to the manufacturer Increased value to the customer
Enhanced productivity of ; Value is added through ;
People Service
Machines Engineering
Materials Design
Space Performance
Set-ups Inventory Lead-times
Downtime Scrap Quality & delivery
Inspection Defects Ordering & development
Over-production Purchasing Schedule adherence
Queuing Problem-solving Customer-supplier relationships
Materials handling Administration Higher quality, improved reliability
Structures Systems Attitudes

9. Competitive Advantage

10. What business provides its customers
Manufacturing Output Notes
The cost of material, labour, overhead & other resources
Cost used to produce a product or service.
The extent to which materials and operations conform to
Quality specifications and customer expectations, and how tight or
difficult the specifications and expectations are.
The product’s or service’s features and the extent to which
Performance the features or design permit the product or service to do
things that other products and services cannot do.
Delivery time & delivery The time between order-taking and delivery to the
time reliability customer. How often are orders late and how late are they
when they are late ?
The extent to which volumes of existing products or
Flexibility services can be increased or decreased to respond quickly
to the needs of customers.
The ability to quickly introduce new products or services or
Innovativeness make design changes to existing products.

11. Understand the Trade-Offs

12. Companies well-known for a particular output
Cost Quality Performance Delivery Flexibility Innovativeness

13. • Energy efficiency in buildings
• Large-scale farm yields
• Food waste
• Municipal water leakage
15 =
• Urban densification
• Iron and steel energy
efficiency
• Smallholder farm yields
• Transport efficiency
• Electric and hybrid vehicles
• Land degradation
• End-of-use steel efficiency
75%
• Oil and coal recovery
• Irrigation techniques
• Road freight shift
• Power-plant efficiency

14. Composition of business Guide investment and divestment decisions at
Growth portfolio portfolio level ; base decisions on resource trends
Innovation and new products / Develop resource productivity products,
services technologies and / or services to fill both needs of
customers and company
Build a better understanding of resource-related
New markets opportunities in new market segments and
geographies and develop strategies to capture
them
Improve revenue through increased share and / or
Internal efficiency Green sales and marketing price premiums by stressing resource efficiencies
in marketing messages
Improve resource management and reduce
Sustainable value-chains environmental impact across value-chain to reduce
costs and add perceived value of products and
services
Reduce operating costs through improved internal
Sustainable operations resource management e.g. carbon, energy,
hazardous, waste and water
Risk management Operational risk management Manage risk of operational disruptions (caused by
scarcity, climate change and community risks)
Reputation management Reduce reputational risks and get credit for your
actions (stakeholder management)
Regulatory management Mitigate risks from pending legislation and capture
opportunities from regulation