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Linkages

SEED-Linkages Program

October 2002

European Movement

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Linkages

SEED IS is a regionally based consultancy working under the

management of IFC – the world’s leading frontier market investor

SEED’s overall remit in the region is to support the development of viable

SMEs through direct consultancy work, training and other support

ADP is an affiliate of Accenture, one of the World’s leading management

consultancies, established to apply high quality business and technology

consulting skills within a development context

SEED & Accenture Development Partnerships

Jointly we are developing a Linkages Programme to assist SMEs

surrounding a large company in the optimisation of their internal

operations, in order to achieve mutual benefit for both the SME and

the large company….

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Linkages

Franchise

Retail

Wholesale

Raw Materials

Components

Services

SME

Key:

Non Core Businesses (‘Spun Off ‘ from Core

Business)

LINKAGES

LOCAL CORE BUSINESS

FDI (Foreign Direct

Investment)

SUPPLIERS

DISTRIBUTORS

Franchise

Retail

Wholesale

Raw Materials

Components

Services

SME

Key:

Non Core Businesses (‘Spun Off ‘ from Core

Business)

LINKAGES

LOCAL CORE BUSINESS

FDI (Foreign Direct

Investment)

SUPPLIERS

DISTRIBUTORS

Franchise

Retail

Wholesale

Raw Materials

Components

Services

SME

Key:

Non Core Businesses (‘Spun Off ‘ from Core

Business)

LINKAGES

LOCAL CORE BUSINESS

FDI (Foreign Direct

Investment)

SUPPLIERS

DISTRIBUTORS

Franchise

Retail

Wholesale

Raw Materials

Components

Services

SME

Key:

Non Core Businesses (‘Spun Off ‘ from Core

Business)

LINKAGES

LOCAL CORE BUSINESS

FDI (Foreign Direct

Investment)

SUPPLIERS

DISTRIBUTORS

NewSMEs

Franchise

Retail

Wholesale

Raw Materials

Components

Services

SME

Key:

Non Core Businesses (‘Spun Off ‘ from Core

Business)

LINKAGES

LOCAL CORE BUSINESS

FDI (Foreign Direct

Investment)

SUPPLIERS

DISTRIBUTORS

Franchise

Retail

Wholesale

Raw Materials

Components

Services

SME

Key:

Non Core Businesses (‘Spun Off ‘ from Core

Business)

LINKAGES

LOCAL CORE BUSINESS

FDI (Foreign Direct

Investment)

SUPPLIERS

DISTRIBUTORS

Franchise

Retail

Wholesale

Raw Materials

Components

Services

SME

Key:

Non Core Businesses (‘Spun Off ‘ from Core

Business)

LINKAGES

LOCAL CORE BUSINESS

FDI (Foreign Direct

Investment)

SUPPLIERS

DISTRIBUTORS

Franchise

Retail

Wholesale

Raw Materials

Components

Services

SME

Key:

Non Core Businesses (‘Spun Off ‘ from Core

Business)

LINKAGES

LOCAL CORE BUSINESS

FDI (Foreign Direct

Investment)

SUPPLIERS

DISTRIBUTORS

NewSMEs

Linkages helps different types of SMES within an emerging economy affected in different ways by the intervention of Foreign Direct Investment (FDI) in a large

company

Linkages Program: Background

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Linkages

MakeBuyMove

Sell SellMakeMake/

Provide

How do I Set up as a New SME?

•Business Plan

•Sourcing of Funds

•Training & Technology

How do I Set up as a Spun Off SME?

•Business Plan

•Sourcing of Funds

•Training & Technology

How do I Spin Off or Outsource my Non-Core Assets while ensuring I adhere to Corporate Social Responsibility principles?

SEED provides a range of related support services following the spin off of Non Core Assets aimed at assisting both the Large Company as well as the new and

spun off SMEs affected by this process

Spin Off-Related Consulting Services

• Non-Core Asset Assessment & Feasibility Study

• Outplacement program for Redundant Workers

• Generation of New Business Ideas

• Feasibility Study for New Businesses

New Businesses

Large Company Spun Off Non Core Assets

Spin Off/ Outsource

Establish as New

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Linkages

Supply Chain Consulting Services – Supplier Focus

Suppliers SMEs must focus on developing certain key functions in order to maximise the value chain throughout the

supply chain network

Supplier

Hyper-Market

Customer

SME

Core Business

How can I be a good supplier?

•Competitive Pricing

•Quality Products

•On-time Delivery

ProvideBuy

Sell

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Linkages

Supply Chain Consulting Services – Distributor Focus

Distributor SMEs must focus on developing certain key functions in order to maximise the value chain throughout the

supply chain network

Factory

Distributor

SME

Core Business

How can I be a good distributor?

•Focus on Sales & Marketing

•Effective Merchandising

•Excellent Customer Service

MakeMove

Sell

Suppliers

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Linkages

The Linkages Program begins with a business assessment during which all aspects of the SME/Large Company are analysed, followed by a phase during which

recommendations are made for the implementation of tools, technology and/or training

Implementation

Recommendations

Tools TrainingTechnology

Business AssessmentBusiness

Assessment

Business Assessment

Process Reengineering

Score Cards

Data Models

Methodology

ERP

Trans-port

Mngt

Order Mngt

Ware-house Mngt

Supply Chain

Planning

SCM Overview Course

Quality Mngt

Sales & Market-

ing

Finan-cial Mngt

General Management

Implementation

Recommendations

Tools TrainingTechnology

Business Assessment

Business

Assessment

Business Assessment

Process Reengineering

Score Cards

Data Models

Methodology

ERP

Trans-port

Mngt

Order Mngt

Ware-house Mngt

Supply Chain

Planning

SCM Overview Course

Quality Mngt

Sales & Market-

ing

Finan-cial Mngt

General Management

Linkages Program: Methodology Overview

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Linkages

SEED will analyse existing operating practices across and

within the SME/Core Business Supply Chain to identify the

key issues faced both upstream and downstream. For

example:

• Upstream:

• Competitive Pricing

• Quality Products

• On-time Delivery

• Downstream:

• Focus on Sales & Marketing

• Effective Merchandising

• Excellent Customer Service

SEED will produce a report recommending ways to overcome

the issues

SEED Offerings – Business Assessment

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Linkages

Accenture & SEED - Implementation:TECHNOLOGY

SEED Staff will be skilled in implementing business software solutions (specific to the region) for SMEs

Software will be implemented by the SEED local consultant network and will typically cover some or all of the following modules:

\

Invoice Receipt & Payment Creation

Sales Orders

Creation

Purchase Orders

Creation

General Accounting

Invoice Creation & Payment Receipt

Asset Tracking

Bank Reconciliation

HR/Payroll

Inventory Management

Production Planning

Transportation Scheduling & Carrier/Route Planning

Su

ppliers D

istrib

uto

rs

Supply Planning Demand Planning

SCM

ERP

Key:

\

Invoice Receipt & Payment Creation

Invoice Receipt & Payment Creation

Sales Orders

Creation

Sales Orders

Creation

Purchase Orders

Creation

Purchase Orders

Creation

General Accounting

General Accounting

Invoice Creation & Payment Receipt

Invoice Creation & Payment Receipt

Asset TrackingAsset Tracking

Bank ReconciliationBank Reconciliation

HR/PayrollHR/Payroll

Inventory Management

Production PlanningProduction Planning

Transportation Scheduling & Carrier/Route PlanningTransportation Scheduling & Carrier/Route Planning

Su

ppliers

Su

ppliers D

istrib

uto

rsD

istrib

uto

rs

Supply PlanningSupply Planning Demand PlanningDemand Planning

SCM

ERP

Key:SCM

ERP

Key:

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Linkages

Example of Materials - Supplier Side

Training Courses

Introduction to SCM

Management of service contracts

Cost accounting

Quality control management

Production planning

Business Strategy

IT Systems

MIS

Inventory Control

Production

Financial Mngt System

Consultancy Services

Supplier Selection and Evaluation Program

Organisation Design

HR Management

Product Standards

Compliance with Buyer’s purchase criteria

ISO Accreditisation

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Linkages

Training Courses

Retail/Store Operation Management

Marketing Concepts

Customer Relations

Sales Motivation

Business Strategy

IT Systems

POS

Inventory Control

Transportation System

Financial Mng System

Example of Materials - Distribution Side

Consultancy Services

Incentive Program

Merchandising

Marketing/Promotion Design & Implementation

Organisation Design

Sales Network Design

HR Management

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Linkages

Tigar: A Linkages Case Study

Product: Automobile Tyres & Tubes Annual Turnover: > US$ 70 million No. of Employees: > 4,000 Location: Pirot, Serbia Date Established: 1935 Legal Status: Privatized, 1991 Joint Venture set up:

Tigar Holding 65% Michelin 25% IFC 10%

New Business

Work with Tigar Management to help develop new business ideas for

outplacement of staff affected by spin off or outsourcing program

Spin Off/Outsourcing

Assessment of Non-Core Assets in order to

determine Spin Off or Outsourcing Strategy for

each

Supply Chain

Business Assessment to recommend solutions to

existing issues and future strategy of spun off sales

network (Tigar Trade)

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Linkages

Product: Automobile Tyres & Tubes

Annual Turnover: > US$ 70 million No. of Employees: > 4,000 Location: Pirot, Serbia Date Established: 1935 Legal Status: Privatized, 1991

Joint Venture set up: Tigar Holding 65% Michelin 25% IFC 10%

Tigar: A Linkages Case Study

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Linkages

Workers catering

Flourmill

Bakery shop

Pasta Production

Business restaurant

Animal Food

Mountain House

Business restaurant

Workers catering

Animal Farm

Retail stores

Syndicate catering

Tigar INCON Tigar ToursConstruction TransportationInsuranceCatering

Business Services Division

Babusnica

Tigar: Outsourcing & Spin Off Program

Assessment of Non-Core Assets in order to determine Spin Off or Outsourcing Strategy for each

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Linkages

Laundry Facility

Mini Cattle Farm

Herbal Product Processing

Tigar: New Enterprises Program

Work with Tigar Management to help develop and conduct feasibility study into new business ideas for outplacement of staff affected by spin off or

outsourcing program

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Linkages

Work methods in the network

Warehouse utilization and logistics 

Management Information Systems and tools

Merchandizing, product specialization in the stores 

Store profitability

Introduction of new services 

Franchise system

Business Assessment to recommend solutions to existing issues and future strategy of spun off sales network (Tigar Trade)

Tigar: Supply Chain Network Program