Kwizera Eric Gasana

1 ANALYSIS OF TECHTRONIX SOLUTIONS A HI-TECH CASE STUDY CAPSTONE PROJECT 2 TABLE OF CONTENTS • Business Overview • Data Overview • Purpose of the Project • Project Dashboard • Analysis of Results ❖ Sales Analysis ❖ Inventory Management ❖ Profitability ❖ Market Expansion • Recommendations 3 BUSINESS OVERVIEW • Techtronix Solutions is a forefront player in the microchips and robotics industry • The Company has an extensive portfolio that caters to automotive, consumer electronics and industrial sectors • Their product base includes microchips, robotics and sensors • The regional market base includes North America, Europe, and Asia-Pacific • The Company has encountered challenges in streamlining its sales strategies, optimizing production planning and pursuing market expansion • It also grapples with demand unpredictability, inventory management inefficiencies, and identification of profitable market opportunities 4 DATA OVERVIEW • Over the previous year, the Company has compiled a dataset encompassing each transaction • The dataset comprises of the following: ❖ Sales ❖ Customer interactions ❖ Product specifics ❖ Financial Metrics • This dataset presents an invaluable opportunity for,: ❖ In depth business performance analysis ❖ Trend identification ❖ Insight extraction to inform strategic decisions 5 PURPOSE OF THE PROJECT • To analyze sales trends across various product categories, sectors, regions and timeframes, identifying the best and worst performers • To dive into customer segmentation to reveal purchase patterns, preferences by sector, and geographic distribution • Evaluate inventory management, against sales figures to pinpoint production planning mismatches to propose methods to better align production with market demands • Analyze profitability across different product categories, considering sales revenue and production costs. This is meant to point out products with high margins and suggest cost reduction strategies • Analyze sales and customer data to discover new markets for expansion, emphasizing regions and sectors with untapped potential . 6 • Sales Analysis ANALYSIS OF RESULTS Key Insights 7 COMMENTS ON SALES ANALYSIS • Sales Analysis ❖ Product categories ✓ Microchips fetched the highest revenue of $97 million in 2023, accounting for 39% of the overall sales ✓ Robotics came in second place, bringing in $ 79 million (31%) while sensors were the last category with $ 76 million, which is 30% of the revenue portfolio. ❖ Sectors ✓ Out of a total revenue of $ 252 million, the industrial sector was the highest earner with $89 million (35%), followed by consumer electronics at $ 84 million (33%), and then automotive brought in $79 million (32$) . 8 SALES ANALYSIS CONT’D • Regions ❖ North America accounted for the highest percentage in revenue accounting for $ 52 million, followed by Asia and then Europe came in 3rd place. USA had the highest revenue at $ 19.22 million followed by China ($ 19.21 million) and then the lowest was South Korea at $ 17.2 million. • Timeframes ❖ From the chart, the month of March brought in the highest revenue which was $ 23 million. The lowest sales were recorded in May 2023 at $ 18.7 million. Seasonality is a big factor that affects sales. 9 CUSTOMER SEGMENTATION • Purchase Patterns ❖ From April to May 2023, sales dropped significantly from $ 23 million to $ 18 million, before increasing again to $ 20 million in June, $ 22 million in July and $ 24 million in August. In the summer months, sales increase given that expenditure is usually high in that period. ❖ The most preferred product is the microchip. It fetched over $ 7.1 million in USA, followed by robotics at $ 6.7 million and finally the sensor which brought in $ 5.5 million. ❖ The microchip generates most money in the Europe region, with $ 2.8 million, followed by the AsiaPacific at $ 2.2 million and then the North America at $ 2 million. 10 ANALYSIS OF INVENTORY MANAGEMENT • The industrial sector has the highest costs of production ($ 1.3 million) but also the highest profits of $ 20 million against a total revenue of $ 89 million. • The consumer electronics have almost the same costs of production ($ 1.3 million) but generate a lower net profit of $ 17 million with a revenue of $ 84 million. The automotive sector has the lowest cost of production at $1.2 million but generate the lowest net profit of $ 16 million and a revenue of $ 79 million. • Even though the industrial sector has the highest costs of production, it has the highest revenue and net profit. In terms of profit margin, it generates the highest proportion of 22.4% while consumer and automotive have a similar margin of 20.2%. With lower costs of production, the automotive and consumer electronics revenues can be boosted with more production of the same products to be sold in the Asia and European regions. • In terms of inventory, it is more prudent to have less stock of microchips in the 1st and 2nd quarter because of declining sales. Between 3rd and 4th quarter, more microchips can be produced because of higher demand. • For robotics, there should be less production in the 1st and 2nd quarter as well and increase production in the 3rd and 4th quarters because of higher demand and the need to sell more products. • Similarly, reduce production of sensors in the 1st and 2nd quarters but in less proportion to the microchips and robotics. Thereafter, there is need to stabilize production in the 3rd quarter and increase in the 4th quarter where demand is high. 11 ANALYSIS OF PROFITABILITY • Profit by Product Category and Quarter ❖ For microchips and robotics, profits increase from 2nd to 4th quarter. ❖ Microchips category increase from $4700 in the 1st quarter to $6700 in the 4th quarter and robotics increase from $3750 in the first quarter to $6400 in the 3rd quarter before declining to $4700 in the 4th quarter. Sensors decline from $5960 in the 1st quarter to $4750 in the 4th quarter. ❖ Production should be increased for microchips from 2nd to 4th quarter where there is higher demand based on the high quantities sold. For robotics, production should be increased between 1st and 3rd quarter and reduced towards the 4th quarter. Sensors production should be reduced between the 1st and 2nd quarter and increased in the 3rd quarter and reduced again in the 4th quarter. 12 ANALYSIS OF MARKET EXPANSION • Total Quantity Sold and Total Production Cost by Product Category ❖ Microchips have a high amount of production cost at $1.5 million for 0.2 million units sold. ❖ Robotics have the second lowest production cost of $1.2 million for 0.2 million units sold ❖ Sensors have the same production cost at $1.2 million but for fewer units sold at 0.1 million. ❖ Given the figures, it is better to scale up production of robotics at a lower production cost and increase marketing to increase the number of units sold. 13 ANALYSIS OF MARKET EXPANSION CONT’D • Total profit by region ❖ The most profitable region is the Asia-Pacific region with a total profit of $ 18.9 million. ❖ This is followed by Europe with $ 18 million and then North America is 3rd with $ 16.2 million. ❖ Of this, China has the highest amount of $10 million followed by Japan with about $ 9 million ❖ China also has the highest revenue of about $ 51 million and Japan has $ 50 million. South Korea has $49 million. ❖ Meanwhile USA has a net profit of $ 12 million and revenue of $ 52 million while Germany has a net profit of $ 9.7 million and revenue of $ 49.8 million. 14 RECOMMENDATIONS • Given that Asia Asia-Pacific region has the highest net profit, production should be scaled up and price discounts considered for products sold. Europe should also be considered as a high potential region. • Robotics should be considered as high potential product given its lower cost of production than microchips and sensors. Only 0.2 million products are sold for a cost of production of $ 1.2 million yet 0.1 million sensors are sold for the same cost of production ($1.2 million) • Microchips production should be reduced given its high cost even if it generates high revenue • Production should be boosted between February and March. Between April and May, it should be reduced because of declining revenues. Further, production should be boosted between May and August (summer period) when expenditure is high and hence more revenue. • Industrial product category should be aggressively marketed because of its high profit potential ($20 million) while consumer electronics generate $ 17 million with almost a similar cost of production ($1.3 million) 15 END