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Contents
1 INTRODUCTION ...................................................................................................... 4 2 DESCRIPTION OF CRONUS INTERNATIONAL LDT ............................................ 5 2.1 BACKGROUND ............................................................................................... 5 2.2 CURRENT SITUATION ................................................................................... 5 3 MISSION AND VISION ............................................................................................. 6 3.1 MISSION.......................................................................................................... 6 3.2 VISION............................................................................................................. 6 4 ORGANIZATION ...................................................................................................... 7 4.1 REGISTERED OFFICES ................................................................................. 7
4.1.1 OTHER COUNTRIES..............................................................................................................8
4.2 DEPARTMENTS.............................................................................................. 8 4.3 EMPLOYEES................................................................................................... 9 4.4 ORGANIZATIONAL DIAGRAM OF CRONUS INTERNATIONAL LTD. .......... 9 5 COMPANY PROCESSES ...................................................................................... 10 5.1 DESIGN AND ENGINEERING PROCESSES ............................................... 10 5.2 SALES & MARKETING PROCESSES .......................................................... 10
5.2.1 SALES SUBDIVISION...........................................................................................................11 5.2.2 MARKETING SUBDIVISION.................................................................................................11
5.4 FINANCE PROCESSES................................................................................ 17 6 PRODUCTS ............................................................................................................ 18 6.1 ITEMS PRODUCED ...................................................................................... 19 6.2 TRADE ITEMS............................................................................................... 20 6.3 ALL ITEMS..................................................................................................... 21 7 SUPPLIERS............................................................................................................ 22 8 CUSTOMERS ......................................................................................................... 23 9 BANKS ................................................................................................................... 24 APPENDIX A: BICYCLE BILLS OF MATERIAL ...................................................... 25 APPENDIX B: BICYCLE ROUTINGS ....................................................................... 29 APPENDIX C: PRODUCTION AND TRADE ITEMS ................................................ 31
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COMPANY PROFILE: CRONUS
1 INTRODUCTION
In this document, we present the profile of a fictive company known as Cronus International Ltd. This company profile forms the background for training material aimed at individuals who want to learn 2 about Microsoft Dynamics NAV in greater detail . In order to give a clear and thorough picture of the Cronus company, the following aspects have been covered: Company description Mission and Outlook Company Parts and Locations Product Line Market and Customers
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1 2
Note: The Cronus database contains a wider assortment of items than the bicycles and bicycle parts mentioned in this document. For the purposes of this document, however, we will only focus on the bicycle factory/business.
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COMPANY PROFILE: CRONUS
3.1 MISSION
The development, manufacture and sale of technologically advanced, high-quality bicycles that promote mobility and thus make a positive contribution to the environment with above market-average yield.
3.2 VISION
To be the market leader in the UK and acquire a top 5 position in other countries through: Guaranteed quality through the use of quality parts and materials Close collaboration with qualified suppliers Searching for and using the latest materials and techniques as appropriate Product design, taking into account ergonomic user requirements, and production capabilities Transparent and flexible approach to customers and retailers Efficient manufacture and distribution of products Use of state-of-the-art software to support both primary and secondary company processes Compliance with sector, consumer organization and governmental quality marks Reliability in the supply of final items, half-finished products and parts
4.1.1 OTHER COUNTRIES Sales in other countries are made through various sales offices. Sales offices only perform sales and marketing-related tasks. They do not keep any stock. Deliveries to other countries are performed directly via the White location.
4.2 DEPARTMENTS
Cronus is subdivided into the following departments: Department
Design and Engineering Emil is responsible for management of the department This department designs new products. As early as the design phase, attention is given to the relative availability of parts and the required production facilities. Furthermore, there is some collaboration with materials suppliers and outsource partners. A bill of materials and routing is worked out in close consultation with the production department for new products in the design phase. This department is led by Julia and is composed of two subdivisions: Sales and Marketing. Sales, led by Kevin, mainly concentrates on bicycle dealers. They attempt to generate interest among bicycle dealers in the UK for the sale of Cronus bicycles. They try to spread out dealers as evenly as possible geographically. They also keep existing customers up-todate on new products, for example. Of course, this department also performs actual sales. Marketing, led by Benjamin, mainly concentrates on end users. Internet advertising, brochures, and print and TV ads are all used to maintain and strengthen the powerful Cronus brand name. This department is led by Vince and is composed of three subdivisions: Production, Logistics and Customer Service. Production, led by Tony, is responsible for the actual manufacture of bicycles at the Blue location. Logistics, led by Karl, is responsible for ensuring that items are available in a timely manner at the various locations, both for the manufacture of bicycles and the sale of bicycle parts. Within the Logistics subdivision, a separate role has been assigned to the White location in Limburg which, under the direction of Ellen, handles the purchasing and distribution of trade items. Customer Service is first and foremost responsible for processing complaints from bicycle dealers. Products with manufacturing defects are received and repaired by this department. Furthermore, Customer Service is also meant to serve customers who do not have their own repairs department (such as home improvement centers) but would still like to provide service to their customers. In some cases, cyclists who must go without their bicycle for longer periods of time are provided with a temporary replacement bicycle. Customer Service is led by Marie. The financial department at Cronus does more than just register sales and receivables. It is also responsible for drafting and monitoring budgets. The CFO, Sara, is responsible for management of the department.
Operations
Finance
4.3 EMPLOYEES
The various employees are listed in section 4.2. The following section will also cite employees by name. Below are photos of various employees of Cronus.
5 COMPANY PROCESSES
Using the Surestep Business Modeller program from Microsoft Dynamics, Cronus was able to create a graph of the company processes carried out by the various departments. The various processes are shown below by department.
Before design can begin, the marketing department runs a market-needs study (while of course keeping an eye on the developments of competing bicycle manufacturers). The Product Manager, Benjamin, and Product Designer, Emil, then discuss beforehand which requirements the product must meet and what the costs can be. Emil represents the point of view of the Design department. In consultation with the logistics manager (Karl), relevant suppliers and the production manager (Tony), the materials and production processes are determined. Before a product can enter into real production, prototypes are often produced. In addition to the initial design of products, continued development, preparation of documentation and product management are also among the tasks of the design department. The departments tasks are once again represented in the diagram below.
Many processes are performed in the sales department. Some processes are part of daily duties and some are performed at other regular intervals or as needed. Among the periodic tasks is the drafting of prognoses. If you only manufactured bicycles when there was demand for them from end users, then you wouldnt be able to supply them in time. Therefore, to avoid producing too many or too few bicycles and other products, the sales manager, Kevin, examines demand far in advance and estimates how demand for certain bicycles will develop over the coming months. Aids for this task include sales figures from previous years, figures on seasonal influences and various professional journals that predict future trends. All of this information leads to prognoses (forecasts), which are entered into Dynamics NAV and serve as the basis for production. Kevin is also responsible for structured management of the sales department, which means he must consider certain questions. For example, should sales zones be extended or adjusted, are sales processes still adequate, and what are the sales objectives for this year? Salesmen and women are of course also responsible for daily tasks, such as finding new customers and closing deals. Obviously, orders must be entered into the system, and the department must also communicate with customers on when deliveries can be expected and when there are possible delivery problems. The diagrams below show the various sales processes.
Marketing is also concerned with sales, but in a different manner. They focus more on analysis of the market and launch of new products. Of course, they also continually work on the position of Cronus in the market. Marketing plans must be drafted and continuously adjusted. New products and entry into new markets often begin with a campaign. A campaign is a coordinated action with brochures, mailings, advertisements and discounts on special products, often for special target groups. The activities of the marketing subdivision are shown in the form of a diagram below.
The production department at Cronus does more than just plan for orders, ensure the presence of materials and take care of the actual production of products. Various planning steps are required before these production tasks. One year in advance, in collaboration with the sales department, a so-called aggregated schedule is prepared. The actual bicycle model to be produced is not specified, but the total quantity of bicycles to be produced is given. Using this schedule, a resource check is performed to determine whether the production capacity is sufficient to supply the expected demand. At a later stage, the sales prognosis (see 5.2.1) and the actual sales orders form the basis for the master schedule, based on which Microsoft Dynamics NAV once again calculates the materials, which can be adjusted later. An overview of the production tasks is shown in the form of a diagram below.
The main tasks of the logistics department are to purchase, receive and dispatch various items. However, there are several fixed tasks associated with these activities. The purchaser, Inga, negotiates contracts with select suppliers for long-term supplies so that quality, prices, and other issues need not always be renegotiated. Agreements are set out in framework contracts. Within the Cronus organization, various measurements are made based on the TQC concept (Total Quality Control) to ensure that the quality of materials and the process are guaranteed. These measurements include inspections of both incoming and outgoing items. At most Cronus warehouses, the reception, storage, picking and dispatch of items is recorded separately. In addition, in the warehouse at the White location, goods can also be transferred from socalled bulk locations (with large storage space) to picking locations (where goods can be easily picked for dispatch).
The various logistics processes are shown in the form of diagrams below.
Cronus attaches great importance to a department that handles service both for bicycle dealers and end customers. For example, in one instance, they might repair bicycles assembled with a defective part and return them to the bicycle dealer, and in another case, they might also provide service for end users who have problems with a bicycle they purchased from somewhere other than the regular bicycle dealer, such as a home improvement center. Bicycles under warranty are placed under a service contract stipulating that repairs which fall under the warranty are performed free of charge. For each service, as well as for those that do not fall under the warranty, a service order is created and used by the mechanics who perform the repair service. The service-related processes are shown in diagram form below.
Below, the financial processes within Cronus are summarized in the form of a diagram. They do not substantially differ from the financial processes of other companies. Payments and collections are made. Some foreign suppliers require that a portion of the agreed price be paid prior to the delivery. For its part, Cronus requires 100 percent advance payment from some customers in less stable countries. In addition, there are of course also processes pertaining to finances of the organization. The department must always ensure that there is sufficient financial elbow room for the purchase of materials, development of new products and prompt payment of wages. For a description of the relationships between Cronus and the various banks, please refer to chapter 9. Cronus performs complete sub-management of its fixed assets with the help of Dynamics NAV. Purchasing, (re)valuation, write offs and decommissioning, sales and separations are handled via this sub-management. A process has also been defined for the annual closing of accounts. An overview of the financial processes as defined by Cronus is shown below.
6 PRODUCTS
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COMPANY PROFILE: CRONUS
The revenues of the current Cronus organization are mainly generated by the Operations department. The two subdivisions that generate revenues are Production and Distribution. Production is responsible for the scheduling of parts and the production of bicycles at the Blue location. The bicycles are sent to the distribution department every day. Distribution not only purchases materials for production, but also buys items which are sold directly by Cronus. Distribution supplies both items manufactured by Cronus and items purchased.
Each product line has several models and designs, such as womens and mens designs and childrens bicycles for a few product lines as well. Each product comes in various color combinations and is sold with various accessories. Models and accessories are adapted or renewed each year based on the latest innovations. Parts are produced by various suppliers exclusively for Cronus, based on Cronus specifications. The so-called Bills of Material (BOMs) form the basis for each end product or half-finished product. Cronus works with so-called single-level BOMs. This means that the Front Wheel half-finished product has its own BOM, which can then be included in the BOM for the bicycle. This work method is associated with the creation of BOMs in Dynamics NAV. Below is an illustration and diagram of an aggregated BOM for one of Cronus successful product models, which was launched on the market simply under the name Bicycle.
The following multi-level aggregated BOM corresponds to this figure. The complete single-level BOMs are shown in appendix 1, the corresponding routings in appendix B. Aggregated BOM for item 1000 (Bicycle):
Since the mid-1990s, Cronus has not only been active in the sale of the bicycles that it produces, but also in the resale of imported items. This concerns not only bicycle parts, but also additional accessories. Through its relations with both bicycle retailers and bicycle parts producers, Cronus has come to be viewed as the perfect channel through which to perform this wholesaler function. Now, nearly 30% of revenues are generated by the wholesaler activities. Through the significant volume of turnover, Cronus has been able to negotiate good agreements with its suppliers. These so-called ladder agreements (the larger the purchase, the better the price) were easily defined in NAV.
7 SUPPLIERS
Like many other brands, Cronus stopped producing its own various bicycle parts decades ago. Certain parts are designed by Cronus, but production is carried out by a selected supplier. Standard parts are also used in Cronus bicycles. Cronus most important suppliers are as follows: Custom Metals Incorporated Custom Metals is in Birmingham, USA. Cronus works closely with Custom Metals to design new 3 frames. These frames are shipped ready-for-use and CIF to the Blue Cronus location. Vital image-defining parts such as the seat and handlebars are also manufactured custom made for Cronus by Custom Metals. Furthermore, standard items such as tires, are obtained from Custom Metals. These items are not only used in production, but also resold. Groene Kater BVBA Groene Kater is a well-known Belgian supplier of bicycle parts, such as hand brakes, mudguards and bicycle bells. Mudguards are produced by Groene Kater based on Cronus specifications. The bicycle bells purchased by Cronus are standard bicycle bells, but marked with the Cronus logo. For the hand brakes, standard models are purchased. Groene Kater is also both a production and trade supplier. Lyselette Lamper A/S Lyselette Lamper from Denmark is world-renowned for the high-quality lights it produces. Cronus purchases them for trade and production. Standard lights are also assembled on less expensive models (supplied, for example, to Automobile and Bicycle retail chains). The more expensive models are equipped with lights produced exclusively for Cronus. AR Day Property Management Cronus has had a business relationship with AR Day for many years. AR Day also manufactures its own bicycles for the lower segment of the market and is thus not a direct competitor of Cronus. During periods when Cronus has production capacity problems for front wheels for its Bicycle" model, it purchases parts from AR Day. In addition to a parts supplier, AR Day is also a supplier of processing services. During busy periods, tasks that cannot be planned at Cronus are outsourced to AR Day. Cronus receives a 10% discount on all invoices from AR Day. An overview of Cronus suppliers is shown in appendix E.
CIF = Cost, Insurance and Freight, meaning that all costs for transport and insurance are covered by Custom Metals.
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COMPANY PROFILE: CRONUS
8 CUSTOMERS
Cronus is active in the Business-to-Business market. Its customers can be subdivided into three categories: 1. Specialty Bicycle Shops These specialized businesses have a wide and extensive assortment of bicycles, bicycle parts and accessories. They normally have their own service and repair department. Sales are made to these customers based on the quality of the product, services and customer relations. This group also makes particular use of the Customer Service subdivision of Cronus. Nearly all of the items sold to specialty bicycle shops are within the high to middle segment. They belong to the RETAIL customer discount group and thus receive special discounts. See appendix D. 2. Retail Automobile & Bicycle Chains These are so-called specialty chains in the middle segment of the market. The bicycles are produced with their own name and logo. They often run national campaigns. The most important customer in this category is The Device Shop. The Device Shop locations often have their own independent bicycle department. They belong to the LARGE ACC customer discount group and thus receive special discounts. See appendix D. 3. Home Improvement Centers These are large national chain stores that have bicycle accessories in their range. These centers also do sell bicycles from time to time, but this concerns bicycles in the lower segment that are only sold but not produced by Cronus. They belong to the LARGE ACC customer discount group and thus receive special discounts. See appendix D.
9 BANKS
Cronus has relations with various banks: The World Wide Bank Due to its many international transactions, Cronus has close relations with the World Wide Bank. The contact person there is Mr. Grant Culbertson. Cronus holds two bank accounts: Euro account 99-33-456: This is Cronus business account to which payments are made from suppliers and customers and from which Cronus also pays its suppliers and members of personnel. Dollar account 99-44-567: This account is used for dollar transactions. Local currency account 99-99-888: This account also contains Cronus credit line with World Wide Bank. At this time, it amounts to GBP 934,400. When large payments need to be made and the balance on one of the other accounts is insufficient, then money is transferred from this account to one of the other accounts. GIRO Bank In the past, an account at GIRO Bank was used for normal payments. A few customers still make their payments to this account (14-55-678). The New Bank of London In the past, Cronus mortgaged several buildings and machines with The New Bank of London.
APPENDIX E: SUPPLIERS
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