Fundamentals of business remains same for all businesses. No Business, irrespective of size, shape and sector is exempted. Success revolves around 3 Key Principles – Price, Profit & Cash Flows (PPCs).
Many Businesses are key elements to our livelihood more than being merely part of the value Chain. Social value chain, starting from immediate stake holders in a Business have to accord its due, deserving recognition. Off late, technical, functional and safety reverence required has paled in comparison to commoditisation of products and services, thanks to supply demand gap skewed very much in favour of demand. Both back end and front end of the value chain is either cartelised or well organised, sandwiching both consumers and MSME Businesses.
More than ever, PPCs have gained critical significance for all businesses. In the recent past, due to the spiralling cost increases, impact of PPCs is felt very rampantly across all Businesses, especially in MSME sector.
Guiding principle should be “Pricing is more important than Production and Product, Profit is more important than Pricing and Cash Flow is more important than Profits”.
Though said in simpler terms, for most of the Businesses these commensurate even before the first sale is made. Starting from: –
- Choice of Location & Meeting Regulatory Requirements
- Market Positioning & Market Mix – Choice of Technology & Size
- Customer and Product Mix
- Supplier Choices & Mix, both for Equipment & Inputs
- People Mix, Staff, Technicians and Structure
- Investment Mix
These are just indicative but significantly drive the Capacity and Capability of any Business, and are in turn enablers for price and profit determination.
MSME Businesses are broadly of 3 categories:
1. Hooked to few large customers, for better capacity utilisation and customer loyalty, usually characterised by volume based margins and reciprocal dependency.
2. Product specialists, supply mix usually of both OEMs and Proprietary nature characterised by cost competitiveness and integration.
3. Typical made to order Businesses with multiple low volume higher value products, characterised by spread of risk and ability to get better price and thus margins. Kind of Niche players.
Each of the above categories have their own advantages and disadvantages. There are both successes and failures. Failures are mostly attributed to lack of timely recognition and recording of supply chain competitiveness imposed by the Principles of 6 Forces – Customers, Suppliers, Competitors, Employees, Regulators and Society.
The magnitude of influences and impact on the performance of Businesses may vary according to an Organisation Structure. While market determines the supply and sale price, there are a host of other factors which play a significant role on Success of Businesses, both controllable and un-controllable. Success eventually rests on the ability of the Organisation to manoeuvre the Changes, dynamically. Its all about adaptability.
About the Author
Dr. NITHYANANDAN DEVARAAJ (NITHIN) BE., MBA., PhD
Executive Director – AMEX Alloys
Chairman – Shri Avinashiappar Trust
Secretary – Coimbatore Management Association
Past National Secretary – The Institute of Indian Foundrymen.
Dr. Nithin has about 35 + Years of Experience in Engineering Manufacturing organizations. He has worked for LMW Group, L&T, Hitachi & CRI Group. He is considered to be a Professional with a rare blend of Intrapreneurial Orientation, having been a Business Head across Engineering Manufacturing Organisations / Industries.
He is a Member in Governing Council / Board Of Studies of Universities and Management Institutions as a Management Expert.
Dr. Nithin is part of various industrial associations and professional bodies; he is credited with playing a leading role in bringing land mark changes in Export Incentives, Classification of MSMEs, CPCB Norms, Waste & Disposal Management. He also plays a pivotal role in training and development of educated Youth seeking employment opportunities.
He Leads a team that turned around a division and a Company, and in establishing large scale projects as bench marks in industry (This Business has won several awards at National & Regional Level which includes – Indian Foundry of the Year, Young Foundryman and Foundryman Awards, 4Star Award from CII, Green Award & Safety Award from Tamil Nadu Government & at National Level from IIF, First Indian Foundry in the segment to get OHSAS 18001 & ISO 50001 Certification and Many Kaizen awards.)
He is a Managing Trustee of a Family Managed Trust involved in activities like rendering Food, Shelter, Education and Medicare. Noted for rendering services during Chennai, Kerala, Tanjore & Nilgiris Floods.
- Ph.D in Management Sciences
- MBA in Finance & Marketing – Gold Medalist and University Topper
- BE Mechanical Engineer with Distinction
- An IRCA certified lead auditor and assessor for ISO 9001.
- A qualified auditor for EMS, OHSAS & EnMS
- L&T Future Leaders Training at IIM – C
- Member & Industry Nominee, Coimbatore Disaster Management Council
- A Guest Faculty to Premier Management Institutes & Was Visiting Faculty to IIM – Calicut
- An examiner for Management Qualifications & Assessor for Management Teachers
- An acknowledged management trainer and consultant
- Is a regular Business Column Writer.
- Foundry Development Council, Ministry of Commerce & Industries, India.
- Institution of Engineers, All India and Coimbatore Management Association
- Board of Studies in Universities & Premier Management Institutes
- The Outstanding Alumni & Distinguished Alumni Awards from PSG Institutions & Bharathiar University.
- The CMA Golden Jubilee Year Best Manager award for the region.
- The Best Management Student award and many accolades at National Level.
- The Mother Teresa Award of Excellence for Young Business Managers.
- Management of Innovation, Corporate Strategic Planning and Manufacturing Management, Green Supply Chain
He can be contacted at :
Mobile : +919487946900
Email : [email protected]
LinkedIn : https://www.linkedin.com/in/dr-nithyanandan-devaraaj-95612338/
Twitter : https://twitter.com/dr_n_devaraaj
Facebook : https://www.facebook.com/drnithyanandan.devaraaj.7