Case Alpha Trading

Deriving TO BE
Session #14 Aug 3rd 2015

Introduction - Alpha Trading Pvt

Ltd

A traditional New Delhi based company

Imports and sells mobile phones and
automated cash counting machines
From its principals in Taiwan
The company has a office on Asaf Ali Road
10 sales persons
A network of 40 dealers across NCR
The dealers engage the retail customers for
over the counter sales.

Introduction - Alpha Trading Pvt

Ltd

Hukum Chand Jain is the 70 year old patriarch

of Alpha Trading
A traditional tight fisted business man
Does not believe in any sales of credit to
Dealers
Advance cheques, received from dealers
against proforma invoices, are first cleared and
then goods shipments are effected to the
Dealers.

Introduction- Alpha Trading Pvt

Ltd

Current Business Process

Cash Machines:
The A-1000 is a very high value and reliable
product which is widely used in the office of Banks
and Real Estate Developers where large amounts of
cash is handled daily.
The Real Estate market in NCR has been in a deep
recession and the Orders from the Real Estate
sector have practically dried up in the last one year
The A-1000 a specialized high volume cash counting
machine imported against specific dealer orders.
Not sold ex-stock.
There is a one month lead time to service such
orders.
The Dealers place orders on Alpha along with an
advance cheque
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Current Business Process

Mobile Phones:
The Principals issue an Annual Catalog
Alpha Trading enjoys a 40% discount per item on the list
prices.
Based on the demand estimate for the forthcoming
quarter a revolving L/C is opened in value terms
There being a one week lead time, every Friday a PO is
issued favouring the Principals against the Revolving L/C.
The order booking process for mobile phones is very
traditional
The sales person first prepares a quote
gets it approved from the dealer
then he goes to accounts gets a proforma invoice raised
he goes back to the dealer to get an order along with an
advance cheque.
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Purchase:

Cash Machines: All orders from dealers are

consolidated on a monthly basis and a single L/C
is opened along with a PO on Alpha Principals for
imports of A-1000.The Principals require a one
week lead time to service these orders.

Mobile Phones : a quarterly demand estimate is

prepared in consultation with Sales and Inputs
are given to Finance for opening a Quarterly
Revolving L/C. Based on marketing inputs
weekly POs are issued to the Principals against
the revolving L/C.
All liason work with Principals concerning
shipments is done by Purchase
POs are issued by this department

Accounts:

General accounting
Salaries
Taxation
Bank related work
Raises invoices on customers
Accepts payments
Opens L/Cs to facilitate the imports.

Logistics

Stores:
G/R of Goods Issue against Dealer Orders
Customs Clearence of import
local transportation
G/R of incoming goods
inventory management of local stocks
Dispatch:
receipt of goods from stores for each dealer
order
ensures the goods are transported to the
dealer doorstep.
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Gross Margin and Net Profit

Statement

10

Statement of Expenses

11

HR Details

12

Transformation Options

Reduce NV & BV activities

Reduce TAT
Integrated system exploit IT
Incentives to Sales
New business channels
Call centre
Rationalize staff
Tie up with logistic companies
Add product lines
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AS-IS

Remove Dataflows NVA

Refer Process
Template

Full Impact of Removing

NVAs

Impact of Electronic Funds

Transfer

IT Enabled To-Be