Mumbai, Apr 27: Management consultancy firm Business Consulting Group (BCG) has identified sectors like telecom, transportation, financial services, metals and chemicals as thrust areas for development based on their strengths.Sectoral groups have been formed to consolidate the knowledge base and expertise in these sectors, the firm says.
BCG has worked for several large clients in India and abroad like Ashok Leyland, BOC India, SIEL, HDFC, Hindustan Lever, ITC Agrotech, Larsen & Toubro, Wimco, among others in India. Foreign clients include DuPont, Armstrong, Mitsubishi, General Accident and Standard Life. Over 70 per cent of revenue for BCG comes from exisiting clients and over 90 per cent comes from referrals.
BCG provides management consultancy in a number of areas like enhancing revenues, cost reduction, strategy for performance improvement and channel relationship management.
For instance, BCG has helped an SBU of a Rs 400 crore automobile dealership business, to develop a strategy to increaseservice revenues 10-fold in 1998. BCG says, the exercise comprehensively covered the changes required in marketing approach (service model desired in various geographies), developing the service mix, identifying the target customers and prioritising geographies. Operational issues that impede implementation of the strategy and steps required to tackle these were highlighted.
On cost reduction measures, BCG has assisted an engineering company achieve a 5 per cent increase in profit before tax and sales in 1997. This covered reduction in raw materials loss/wastage, logistics costs, production cycle time and improved pricing resulting from correction in product costing, improved information flow systems and management's orientation to accomplishing tasks through multifunctional teams. The result of this was a Rs 10 crore per annum addition to the bottomline of the company in less than 10 months, BCG claims.
Strategy planning, which is a precursor to any performance improvement exercise, is also covered byBCG. This exercise was recently completed for Godavari Fertilisers and Chemicals. ``Currently we are involved in helping the client in the process of implementation of performance improvement measures to enhance the competitiveness of existing operations,'' the firm says. This covers areas of manufacturing, procurement, logistics and marketing which would set the pace for efficiency in the operations in their growth plans.
Finally, on channel relationship management, BCG offers comprehensive services towards the last link of the supply chain, under the practice of `channel relationship management' towards the dual objectives of improving service and managing costs.
For instance, BCG has recently completed a detailed exercise to reorient the distribution setup of Wimco Ltd, involving restructuring the stockists' network, sales setup and the processes for order fulfillment.
BCG claims that the net result of the exercise will be that Wimco will be able to enhance market share through better distributionand at a lower cost per unit of the product.
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