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Boise Automation Case- Team 8

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Prakash Alagar

on 17 August 2014

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Transcript of Boise Automation Case- Team 8

April 15 – Jason Li further postponed the meeting undatedly. On phone he said the price was almost 30% higher but technically the proposal was good.
May 9 – Plant manager ,Bob Muma said the engineers decided everything there and also the workers needed only an easy system to work with.
Talked to Mr.Jennings who said the price was far high above than the budget.
May 10 – Price was reduced to $1.25 million after a detailed discussion.

Contd..

April 5 – A personal meeting with all the committee members was booked. Dan Reynolds was the first.
April 7 – Mr.Jennings was in favour of the project. His minor questions were answered.
April 7 – Met with Dan who revealed few details like all the bidders had satisfied the technical requirements and Boise was not so significantly low in pricing. He did not say anything about other bidders and their pricing.
April 11- Meeting with Jason Li was postponed to April 18.

Contd..

Feb 28 – Visited the mill along with Jenny. Dan Reynolds took us a tour around the mill. Information regarding how the proposal evaluation will happen was obtained but not about the competitors.
All the problems were explained with the help of techicians there and Jenny was sure that the project could be done.
March 2 –Talked to Jennings on phone. Boise was doing advanced projects than what The Northern required. But Jennings was not sure if it would be accepted though he was interested.

Contd..

Develop a customer decision making flowchart and identify the key influencer and decision maker
Contact all of them and identify top 3 selection criteria
To each of them assign one contact person from our company
Devise an action plan to make sure we are the preferred one for each of the influencers and decision makers.
Conduct an internal review and refine the process flow.

Developing and presenting a proposal

Technical plan
1. Can we solve the problem?
2. Can we get any further insight beyond this RFQ?
Customer relationship plan
1. Do we have a solution for the problem?
2. How good is our relationship with each member of our customer’s team?
3. What is our customer’s finanancial stability?


Investigation & Development of action plan

Opportunity assessment
1. customer needs known?
2. having good knowledge and relationship with customer?
3. How big is the opportunity?
4. when is the proposal due?
5. what is the start and completion date of the project?
6. What is the compulsion for the customer to set such deadline?
7. Is the project funding approved?
8. Do we have all sorts of expertise to carry it out?

Sales process

Boise canada’s sales process

Boise automation is a branch of Boise corporation.inc which is one of the largest corporations in the world.
Boise was a leader in automation industry due to their high level technical competency that satisfied the customer very well.
The engineering team at Boise had in-depth knowledge that always considered customer needs and fulfilled it closely.
The sales team is so successful with high win rate. They do face to face presentation of the preliminary design to facilitate the customer to ask their queries and get clarified.

Boise automation, Canada

Automation system is simply a process of making a system functioning on its own with the help of sensors, actuators and controllers. Eg: Household heating system.
It needs two kinds of engineers to design. One who has in-depth knowledge of the process to be automated and one who knows well about automation system construction.
This industry has three competitors
i) Manufacturing solution providers who are automation hardware producers who also does automation service.
ii) Independent system integrators who are independent on any manufacturer can provide this service with their own resources
iii) Hardware suppliers from whom the hardware are to be bought everytime.

Automation system & its competitors

June 6 – The new price was intimated to Dan Reynolds.
June 14 – Dan Reynolds gave a negative note that the new project is not of high importance and he would stay in touch.
On the same day, Jennings was known to be at vacation till mid July.
August 8 – Mails sent to Dan and Jennings asking about the progress.
Till August 29 no response came from anyone .
September 9 – A mail from Dan Reynolds informed that the company singed a deal with a competitor whose name was not mentioned.

Contd..

May 11 – Dan Reynolds said the price was still so high though it was reasonable for the technology provided and he convened a conference call to other members of the committee.
May 25 – Met with Jason Li. He was still negative about the pricing and he was not sure if the project would be undertaken.
June 2 – Dan indicated that the price could be modified till June 6 since the committee meets the next week.
June 3 – The new price was set as $1.2 million as it would be a chance to showcase the new technology to the industry.

Contd..

March 7 – Jenny , Allson and the sales manager Dieter Hasse met at Conference hall. Hasse suggested to bid for $1.4 million for the latest technology.
March 31 – Jenny’s mail said the project was completed. The price was finalized as $1.35 million.
April 4 – A detailed 100 page report was submitted which included the complete detail of the project and the people involved in it.
The information about the review committee was given. It included Dan Reynolds, Mr.Jennings,Mr. Jason ,Derrick Rogers, Bob Muma and someone from corporate standards.

Contd..

Feb 7 – Received a call from Dan informing about the opportunity
Feb 8 – Checked out all the formalities and sent the bid package to Jenny DeBour of Boise engineering division at Toronto to develop the project
Feb 17 – Got a call from Mr.Jennings who confirmed the participation of Boise and he was well aware of Boise’s quality
Feb 23 – Jenny informed that they are far above the required standards and hence the cost would go up. But the Northern paper’s executive was not interested and he just wanted the mentioned specifications.

Exhibit 2- Rob Allson’s sales call log

Differentiated advantage plan
1. What competitive offers do we except?
2. What is our differentiated advantage?
Resource plan
1. Do we have the sales force to close?
2. Do we have the project resource to implement?
3. Does the customer has a project management plan?

Investigation & Development of action plan (Contd..)

Northern paper inc is a successful paper making company at Ontorio that has been making papers for the last four decades.
The wood-chip handling system of the company had to be automated and hence Rob Allison of Boise was called by Dan Reynolds of Northern Paper to bid for the project.
In the following months , they met few times to discuss the project proposal.
After seven months , Rob was notified that he had lost the order. And he began to analyze.

Northern paper inc & the opportunity lost

Paper making industry in canada was the most efficient one that worked continuously and it was cost effective too.
The need for automation is always identified by a mill operator or an engineer at the lower end.
It goes up through the hierarchy and analyzed on various aspects by various departments and people.
It is scrutinized for its cost effectiveness, long term benefits and various suppliers are invited and evaluated before finalizing the businness.
Once it is seems satisfying, the project is approved.

Paper making industry.

Rob Allison, a senior account manager of Boise automation had lost a $1.2 million deal with The northern papers company.
The project was about automating the wood handling system of the company
Rob lost huge incentive and the target set for the year. So he began to analyze the reason.

Boise automation ltd – The lost order at Northern Papers

Boise automation ltd –
The lost order at Northern Papers –Michael Taylor




- Presented by Team 8


Recommendations

1.According to Jason Li from Northern the initial price offered by Boise ($1.35 million) was approximately 30% more than the price offered by the lowest priced. Assuming this, the lowest price offered by competitor was $0.945 million. Since the initial price offered by Boise was at a 20% premium, the cost price of the automation system can be calculated as $1.08 million. So the Boise can lower its price to match the lowest price offered by the competition with a loss only.

2.Rob must understand the different roles in Decision making unit to identify who had more power in decision making.

3.Rob should have taken efforts to convince the finance department of Northern Paper Inc.
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