1- § Aggression of the new entrants undercutting the

1-   
Strategic Audit :Logicentrix (Pvt)Ltd / Supply Chain
Solutions Vertical

 

1-     
External Environment 
Analysis

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1.1 SWOT Analysis                                                                                                                                                            
(Table
01)

WEAKNESSES

 

§  Strong
asset base of Dart Global group

§   
Low brand visibility due to
being a new entity

§  Strong
investment capacity

§   
Low NP’s due to low performing
verticals

§  Strong
brand image of Dart Global

§   
Low NP’s due to investments
made on new verticals

§  Services
of other verticals of Logicentrix

§   
De-growth in client volumes in
target markets

§  Highly
capable management team

§   
Unstable cash flow status

§  Strong
team spirit of the staff

§   
Disadvantages of a growth stage
subsidiary
§   
Lack of market experience
compared to Logiwiz,EFL,Advantis.

§  Advanced
software on SAP Platform

§  Multi-level
logistic capabilities of Logicentrix& Dart.

§  Current
client portfolio

§  Management
being receptive for innovation
 

OPPORTUNITIES

THREATS

 

 

§  Total
unexploited controllable market share

§  
Aggression of the new entrants
undercutting the market rates

§  New
investment at the Muthrajawela L/Park

§  
New & existing competitor
mergers & acquisitions

§  New
project opportunities

§  
Certain large scale clients
operating own warehouses

§  Hambantota
developments under Chinese management

§  
Low cost small time service
providers in the market

§  New
growth trends in the e-commerce segment

§  
Competitors targeting quality
staff.

§  Local
logistics industry not focusing on e-based competitive edges

 

§  Ability
to tap Global opportunities based on our global reach tools

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1.2 
Macro Environment Analysis

 

PESTEEL Analysis                                                                                                                         (Table 02)

 

Drivers

Implications

O/T

Rank

 

 

 

 

Political

Inconsistent policies effecting industry

Changes effecting growth strategies & milestones

T

M

Political attitudes

Effects day to day business processes, operations and staff
working on a given scope .

T

H

Political influences on the processes

 

 

 

 

 

Economical

LKR being devalued

Results in exchange gains & losses over foreign AR/ AP
transactions

T

H

Marginal Interest rates on TOD’s & long term borrowings

Effects the cash flow , and financial cost

T

H

Employment levels on the 18-35 age cap diminishing

High staff overheads due to demand

T

M

Increase in the Tax tariffs for commodities

Results in-growth in import volumes

T

M

Changes in the organizational Tax tariffs

Effects net profits

T

H

 

 

 

 

 

Socio Cultural

Increasing credit expectation & periods of clients

Exposure of debtors & cash flow issues

T

H

Interest in health & fitness of staff

Positive attitudes of staff

O

L

Level of perception based on brand

Low acceptance as Logicentrix , but more credibility as a
subsidiary of Dart .

O

M

 

 

 

 

 

Technological

Average development of 
integrated logistics software’s

Edge on SAP based integration

T

M

Service provider utilization level of technology

Weak response levels on shipments & tracing

T

L

Developing Tech utility of Customs & Ports Authority

Ease of day to day operational activities & high output

O

M

availability of system interfacing with clients

Possibility to create a strategic lock

O

H

 

 

 

 

 

Ecological & Ethical

Reducing the carbon foot print

Increased international acceptance & possible compliance
qualification in international bids & working relationships.

 
O

M

Investing on green initiative’s

Corporate social responsibility

Anti Corruption& Bribing initiative’s

 

 

 

 

 

Legal

Legislative controls on trading

creates limitations for new product development

T

L

Employment  laws

Less flexibility expected from staff

T

L

Health & Safety laws

additional cost on compliance. But more loyalty can be gained
from staff

T

L

Companies act

Boundaries & red tapes in operating

T

L

O : Opportunity , T: Threat , H:High , M:Medium , L:Low

 

 

1.3  
Micro Environment Analysis                                                                   

1.3- a .Client Profiling   /  Porters Five Forces theory(Table
03)

Market Segment

General Storage Cluster

Bonded /Free Zone Cluster

Extended Services Cluster

 

 

 

 

Importance rating

40%

30%

30%

Expected segment Mix

20%

40%

40%

Worthiness rating

10%

50%

40%

Segment Share (in the
market)

50%

20%

30%

Positioning

Reliable/
Economical  Option

No Presence

Multiple Logistics
Solution

Value proposition

Reliability, virtual
visibility & controllability ,central accessibility, convenience to the
supply chain

Ease of Operation,
Service efficiency, Movement visibility, Streamlined processes, Seamless
automation 

Service range &
availability, Operation efficiency, Competency levels, Fulfillment of SLA’s,
Cost economy.

Extent

Local

Local & International

Local & international

 

1.3 –b – Competitor Analysis                                                                                                                                                                                (Table 04)

 

Logiwiz

Advantis

Oviklo

Distriparks

FSL

CHL

Key Strengths

Technology, Hayleysbacking, Advanced
infrastructure ,Brand name

Market leader, Technology, MHI, Strong Brand
Image – Hayleys

Service exalance

Strong Brand Image – Aitken Spence

Locations

Staff

Key Weaknesses

Delay in DMU,internal bureaucracy

Potential Flood risk

Distance

Delay in DMU, Service issues

Coordination’s and service issues

Potential Flood risk

Period of market presence

15

 17 +

7

20 +

10

5

Staff Strength

100-150

50-100

25-50

25

10

22

Client base

50-100

50-100

25-50

25-50

22

28

Locations – Local

4

8

6

5

2

4

Locations-Overseas

3 (MAD,MLE,Fiji)

4 (HK,KUL,MYN)

0

0

4 (BOM.SIN,KUL)

0

Holding company (if a subsidiary)

Hayleys

Hayleys

N/A

Aitken Spence

N/A

N/A

Investment capacity

High

High

Average

Low

Low

Average

Asset base

High

High

Average

Low

Low

Average

WMS System

Redprairie

Oracle based WMS

Oracle based WMS

Oracle based WMS

E trade 2

Oracle based WMS

Brand visibility

Strong

Strong

Average

Strong

Average

Low

Market Share

15%

20%

10%

5%

5%

5%

Market perception

Professional Operator

Market leader/Professional Operator

Professional Operator

Low pricing

Low pricing

Professional Operator

Market activity

Good

Good

Average

Low

Low

Average

Sales Aggression

Good-Selected segments

Good-

 

 

 

 

Market development status

International

International

Local

Local

International

Local

Product development Status

Average

Average

Good

Low

Low

Low

Certifications

ISO/OHSAS

ISO 9001 : 2008 / OHSAS 18001:2007

ISO 9001 : 2008

_

ISO 9001 : 2000

_

Pricing

Above average (60/65)

Average / Below average

Average

Average

Average / Below average

Average

Capacity (Sq.ft)

200,000 +

200,000 +

300,000 +

100000 +

                         50,000

                   115,000

Occupancy

60% – 70%

80%

50%

30%

60%

80%

 

 

 

 

 

 

 

 

1.3-c. Porters 5 Forces (Porter 1985)                                                                                                                             
(Table 5)

Force

Driver

Implications

Impact

Threat of new entrants

Capital requirements

The Supply chain logistics need a high degree
of infrastructure which calls for a high capital requirement . This
demotivates new entrants

M

Access to distribution channels

Strong access to distribution channels would
be an added advantage where upward & downward streams could be well
serviced. Hence entrance is difficult

M

Product differentiation

Logi being a multi-featured unit in the heart
of Colombo has the ability to differentiate against competition. Hence the
threat can be minimized if properly utilized .

H

Proprietary technology

SAP based LOGIWISE software has integrated the
upstream & downward stream in the business which is a 1st time in the
industry. This is a co- competency which minimizes the threat level

H

Threat of Substitutes

Relative quality of substitute services

Manufacturer sourcing most of the supply chain
links would be a threat and may be an economical option for buyers.

L

Bargaining power of customers .

Clients volume

Clients such as Unilever,Metropolitan has more
bargaining power due to volume.

H

Related service provider ratio against clients

The Buyer/ Supplier ratio is variable due to
volume fluctuations. Hence at certain periods the demand for storage is high
and otherwise across certain periods

H

Price Sensitivity

Certain segments are very sensitive against
some who are not . Hence sensitive segment is to be tapped for filler
business only

M

Bargaining power of Suppliers

Supplier concertation

Main suppliers are for GAS & fuel which
has no options hence it’s a suppliers market

M

Security & material has options, which we
have looked at objectively.

The Industry rivalry

Number of competitors

Medium level. Not populated as such as the
freight industry 

M

Size of competitors

Direct competitors are either larger or equal
to us . Hence capabilities and competencies are not far apart

M

Price competition

Severe price war at low volume seasons. Larger
players have better economies of scale.

H

Product Innovation

Low level of innovation where we have a edge
with our profile of services and advancements we do with the  technology which adds value to client.

H

 

 

 

 

2       
– Internal Environment Analysis

2.1 McKinsey’s Seven
‘S’ Framework Analysis                                                                                                
(Table 6)

Column1

Shared Values

Strategy

Structure

Systems

Style

Staff

Skills

Shared Values

 

70% alignment

80% match

Aligned with svc
transparency

20% mismatch

Matching

Meets with the values

Strategy

70% alignment

 

Compatible

Average Alignment. But
needs fine-tuning on SAP ERP on certain processes.

Matching

Needs more staff alignment

Needs more improvement
on review &alignment

Structure

80% match

Compatible

 

Mutually Supported

Compatible

80% match

Needs more improvement
skills for future

Systems

Aligned with svc
transparency

Average Alignment. But
needs fine-tuning on SAP ERP on certain processes.

Mutually Supported

 

68% compatible to
style. 20% improvement required on systems

70% compatible&compliant.
But need improvement on discipline &competency levels

Need more improvement on
system compliance &competency

Style

20% mismatch

Matching

Compatible

68% compatible to style.
20% improvement required on systems

 

Compatible

Needs improvement on understanding
management expectations.

Staff

Matching

Needs more staff alignment

80% match

70% compatible&compliant.
But need improvement on discipline &competency levels

Compatible

 

Management level Meets
the requirement, but operations need improvement.

Skills

Needs further
development in Skills

Needs more improvement
on review &alignment

Needs more improvement
skills for future

Need more improvement
on system compliance &competency

Needs improvement on understanding
management expectations.

Management level Meets
the requirement, but operations need improvement.

 

 

2.2 BCG Matrix                                                                
 (Table 7)

 

High

Relative Market Share

Low

Market Growth Rate

* General Warehousing       * Yard Storage                         * Free zone services
(potential)

* Value Added
services        * Upstream Distribution

* Contract Logistics (potential)

* Personal Effects Storage    * Hardware storage                   * Record room services

Low

 
 

 

 

 

3       
– Current Innovation Record Analysis  of 
Logicentrix

Current Innovation performance

 

( Table 8)

Innovation

2017

2015

 

 

 

No of products developed and presented for
approval

1

2

No of new products launched within the past 2
years

1

2

No of Successful products

1

2

Revenue contribution percentage from new
products

6%

40%

New product position within the overall product
portfolio

4

1 &2

Average pay back period

1 year

2 year

Customer satisfaction ratings

80%

65%

Staff turnover

2

0

Patent creation

0

0

Amount of money spent on research &
development

0

0

New products under development in pipeline

2

0

 

4       
– Leadership Style Evaluation of  Logicentrix

Leadership Style

S1

S2

S3

S4

Scenario of Management
style application

Ops floor mgmt
requires Directive style since the follower readiness is low and directions
are expected by staff to perform.

BOD maintains high
relationship to persuade where follower readiness of GM /Finance is moderate

GM to Dept Managers
relationship level is very high. Follower readiness of the followers (mgr’s)
are moderate or high & requires low directing

Scenario not observed
at Logicentrix so far

Readiness of Follower

R1

R2

R3

R4

 

 

 

 

5        
– Organisation Structure

                                                           

5.2 Organization Structure
Audit / Functional Structure                                                                                                  (Table
12)

FACTOR

DETAILS

ADVANTAGES

DISADVANTAGES

IMPACT

Type

Functional Structure of the WFS
vertical

Capability enhancement of functional
units

Friction between departments
preventing opportunity of synergising .

Medium

Concentration on functional
performance of each department

Duplication in certain activities

High

Ease of KPI management

Managers getting too involved in ops

Medium

Size of Structure

Quite lean

Fast decision making for the
department

limited resources to operate &
develop

High

Clear communication between managers
& subordinates

High stress levels to managers &
supervisor’s

Ease of problem solving

Low

Span of Control

GM centric

Good flow of communication on
corporate objectives & alignment to all staff

Direct involvement of the GM to all
levels or processes

Medium

Comfort of low accountability for
Product Manager

Low

Capability for expansion

Possible

Having the same level of control
through the structure

Vertical expansions of the lean
structure

High

Ability to change & Adopt

Reluctant

Best practices & experiences are
maintained and made use of

Inability to face strategic drift
& change with the environmental demands

High