A large auto original equipment manufacturer (OEM) was struggling to identify ‘right-fit’ supply and sales partners for expansion and protecting its business from operational and financial risks. It also wanted to make informed decisions on new strategic partnerships. At the same time, it was crucial to ensure that its existing channel partner’s operations and business practices remained in sync for a sustained growth trajectory.
Solution
The first step was to understand the systems and processes followed by the OEM.
The team studied in detail the OEM’s existing network structure, partner selection process and monitoring and rewarding mechanism. It also had in-depth discussions with the management, procurement and dealer development/network teams to understand the targets given to them and the challenges and opportunities they perceived from the proposed and existing businesses.
Based on the gaps identified, leveraging CRISIL’s global expertise in assessing supply chain risks, we helped the OEM design key performance indicators (KPIs) to assess all aspects related to the channel partner — risk, legal and compliance adherence, business health and financial health — to ensure disruption-free operations.
The solution was completely customised to the client’s business requirement based on data available.
Customised reports were designed to cover CRISIL’s risk scoring, observations on KPIs, major deviations/issues noticed, key strengths, opportunities, monitorables/action plans and recast financial performance of each channel partner.
The frequency of assessments was appropriately structured to ensure reasonable coverage in terms of geographical presence, criticality and scale of operations of the channel partners.
Customised platforms were built to generate benchmarks for the entire portfolio of sales and supply partners. Visual dashboards were built, to be used for meaningful conversations between the management and channel partners at regular frequencies.
The platform is now being used as the channel partner’s health monitoring system to pre-empt risks, provide early warning signals and initiate a corrective action plan at an early stage if issues come up.
