Source: Senapaty, R., & Dash, D. P. (1999). Use of SNAC analysis for formulating corporate objectives (Unpublished Draft). Email: "Rajaram Senapaty" <rajaram_patty[at]rediffmail.com>
This article demonstrates the use of SNAC Analysis for an organisation that manufactures and sells textile threads to domestic as well as foreign customers. The manufacturing takes place in a number of mills which use several sources of raw material. The distribution is managed by branch offices and regional sales depots. The analysis seeks to develop a hierarchy of objectives for the organisation that could be used to develop a mission statement. SNAC is an acronym for Stakeholders, Needs, Alterables, and Constraints. These terms are defined below:
Stakeholders: Those who have an interest (a stake) in the operation and the performance of the organisation. They may or may not be in a position to influence the organisation directly.
Needs: The needs each stakeholder group seeks to fulfill through the organisation.
Alterables: These are the things the organisation believes it can alter or change.
Constraints: These are the things the organisation believes it cannot change.
STEP 1
List the stakeholders and their needs.
| Stakeholder | Needs |
| 1. Mills | Uniform load
Adequate staff and skills
Good capital equipment and tools
Adequate working capital
Firm specifications and schedules
Appropriate batch quantities
Regular feedback on performance
Specific targets for cost/quality/efficiency
Control over factors determining performance |
| 2. Branches | Regular supply of threads
Adequate inventory
Accurate status of items ordered
Low lead time for specific threads
Adequate working capital
Reward for performance
Realistic targets
Adequate staff and skills
Consumer pull |
| 3.Regional sales depots | Optimum inventory
Adequate working capital
Sales forecasts from branches
Low lead time for supplies |
| 4. Employees | Career growth
Opportunity to use acquired skills
Opportunity to develop skills
Adequate welfare
Satisfaction of higher order needs
Healthy work environment
Reward for good performance |
| 5. Shareholders | Continuous high dividends
Large capital appreciation
Knowledge about the health of the company |
| 6. Creditors | Reliable debt service |
| 7.Transporters | Large volumes
Regular payment |
| 8. Raw material suppliers | Bulk orders
Firm specifications
Regular payment
Uniform flow of orders
Forecast of requirements
Technical advice |
| 9. Capital equipment suppliers | Repeat orders
Prompt payment
Capacity plans/forecasts
Modernisation plans /forecasts |
| 10. Domestic customers | Stable and economic price
Reliable quality
Wide range
Technical advice
Bulk discounts
Prompt delivery
Easy availability
Credit
Education on recognising spurious products |
| 11. Foreign customers | Prompt response
Low quota
Firm delivery schedule
Quality assurance
Environmental friendly product/process
Brand/company image
Technical advice
Smooth/efficient transactions |
| 12. Sourcing points | Uniform order
Prompt payment
Technical guidance
Management guidance
Assured profitability
Mutually convenient delivery schedule
Clear demarcation of responsibility
Financial support |
STEP 2
Identify the Alterables.
Every need of the stakeholders requires some action from the organisation for its fulfillment. Alterables for the organisation are those events, processes, parameters, and systems that can be changed by it for meeting those needs. The list given here is provisional. The final list could be obtained by considering whether some of these items might be better considered as Constraints.
| Sl. no. | Alterable | Sl. no. | Alterable |
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30 | Production schedules
Facilities planning
Maintenance programme
Working capital management
Communication with mills
Mills performance evaluation
Branch inventory management
Regular supply of threads to branches
Low lead-time for special threads
Customer order processing
Targets for branches
Branch performance evaluation
Sales forecast –branch-wise
Marketing strategy
Career planning for employees
Job allocation to employees
Training for employees
Welfare schemes
Job satisfaction
Employees morale
Physical work environment
Performance appraisal (HRD)
Productivity
Efficiency
Liquidity of shares
Communications with shareholders
Operating profit
Transporters
Communication to transporters
Transaction processing (transporters) | 31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59 | Raw material sources
Raw material ordering system
Transaction processing (suppliers)
Raw material requirement forecast
Communications with suppliers
Capital equipment (CE) sources
Transaction processing - CE suppliers
Communications with suppliers
Prices of threads
Quality of threads
Process capability of equipments
Product range
Communications with customers
Domestic inquiry processing
Incentives to customers
Distribution network
Credit policy
Foreign inquiry processing
Prices for foreign markets
Quality systems
Technical support systems
Communication- foreign customers
Transaction processing – exports
Trans. Processing- sourcing units
Communication- sourcing units
Contract – sourcing units
Financial support- sourcing units
Profitability to sourcing units
Management support systems for sourcing units |
STEP 3
Identify the Constraints.
The main constraints seemed to be the following:
| Serial no. | Constraint |
1
2
3
4
5
6
7
8
9 | Organisation structure
Work culture
Technology
Production capacity
Business policy of parent company
Equity holding pattern
Number of employees
Transporters efficiency
Spurious products in the market |
STEP 4
Formulate objectives for the organisation using the following principle:
An objective is to satisfy the need of a stakeholder by modifying an alterable within the given constraints.
| Objectives (Abridged List) [The complete list is given in the Appendix] |
1. To provide mills with uniform load by modifying production schedules within the constraint of technology of the company.
2. To provide mills with uniform loads by modifying production schedules within the work culture we have.
3. ...
11. To provide mills with uniform load by modifying customer order processing at the branches within the overall business policy of the parent company.
12. To provide mills with adequate staff and skills by modifying manpower planning while maintaining a constant workforce
13. ...
21. To provide mills with adequate staff and skills by modifying training for mill employees within the business policy of the parent company.
22. To provide mills with adequate staff and skills by modifying training for mill employees within the work culture of the organisation.
23. ...
121. To provide the branches with low lead-time for special threads by improving the sales forecast within the business policy of the parent company
122. To provide the branches with low lead-time for special threads by improving the sales forecast within the work culture of the company
123. ...
141. To reward the branches for their performance by modifying the career planning system within the business policy of the parent company.
142. To provide realistic targets to the branches by modifying to branch performance evaluation the general business policy of the parent company
143. ...
161. To maintain optimum inventory at the regional sales depot by modifying the facility planning in the mills within the work culture in the organisation.
162. To provide the regional sales depots with adequate working capital by modifying the process capability of equipment within the constraints of technology.
163. ...
201. To provide employees with an opportunity to develop skills by modifying the manpower planning within the framework of a rigid organisation structure.
202. ...
231. To provide a healthy work environment to the employees by modifying the employee morale within the overall policies of the parent company.
232. ...
260. To provide the creditors with reliable debt service by modifying the operating profit within the technology prevalent in the company.
261. ...
381. To convey a strong brand and company image to the foreign customers by modifying communication with the foreign customers within three years.
382. ...
410. To provide the sourcing units with prompt payments by modifying transaction processing with the sourcing units within the rigid organisational structure of the company.
411. ...
453. To provide financial support to sourcing units by modifying financial support systems to sourcing units within the rigid organisational structure of the company. |
It now becomes necessary to select some criteria to reduce the number of objectives to about 40. The following criteria were used to reduce the number of objectives:
(a) If more than one alterable has been used for satisfying one need, the most important alterable can be chosen to satisfy that need.
(b) Some of the needs or alterables could be clubbed together and reframed as one.
(c) Finally, a number of objectives that would be automatically programmed given the present focus of the management were dropped from the list, leaving only the more unsual ones. [In practice, this would be done in consultation with the management.]
The final set of objectives was obtained by using these criteria.
Objectives (Final List) |
1 To provide the mills with control over factors determining their performance by giving more autonomy to mills within the organisational structure.
2 To provide the mills with control over factors determining their performance by giving more autonomy to mills within the business policy of the parent company.
3 To provide the mills with control over factors determining their performance by giving modifying the communication with mills within the organisational structure.
4 To provide the branches with adequate inventory by improving production schedules within the constraints of technology.
5 To provide the branches with adequate inventory by improving production schedules within the constraints of production capacity.
6 To provide the branches with adequate inventory by improving production schedules within the work culture.
7 To provide the branches with adequate inventory by improving production schedules within the business policy of the parent company.
8 To maintain optimum inventory at the regional sales depot by modifying the branch inventory management within the work culture of the organisation
9 To maintain optimum inventory at the regional sales depot by modifying the branch inventory management within the business policies of the parent company.
10 To maintain optimum inventory at the regional sales depot by modifying the branch inventory management within the efficiency of the transporters
11 To provide the employees with career growth by modifying the performance appraisal systems within the work culture of the organisation.
12 To provide the employees with career growth by modifying the performance appraisal systems with the overall business policy of the parent company.
13 To provide the employees with career growth by modifying the performance appraisal systems within the framework of the rigid organisational structure.
14 To provide shareholders with knowledge about the health of the company by modifying communication with the shareholders within the business policy of the parent company.
15 To provide shareholders with knowledge about the health of the company by modifying communication with the shareholders within the work culture of the company.
16 To provide the creditors with reliable debt service by modifying the operating profit within the overall business policy of the parent company.
17 To provide the creditors with reliable debt service by modifying the operating profit within the work culture of the company.
18 To provide the creditors with reliable debt service by modifying the operating profit within the technology prevalent in the company.
19 To provide the creditors with reliable debt service by modifying the operating profit within the production capacity prevalent within the company.
20 To provide regular payment to transporters by modifying communications with transporters, within the business policy of the parent company
21 To provide regular payment to transporters by modifying communications with transporters, within the work culture prevalent in the company.
22 To provide regular payment to transporters by modifying communications with transporters, within the rigid organisational structure prevalent in the company.
23 To provide capital equipment suppliers with prompt payments by modifying transaction-processing systems with (CE supplier) within the business policy of the parent company.
24 To provide capital equipment suppliers with prompt payments by modifying transaction processing systems with (CE supplier) within the work culture of the company
25 To provide capital equipment suppliers with capacity plans/forecasts by modifying the communication with capital equipment suppliers within the work culture of the company
26 To provide the raw material suppliers with forecast of requirements by modifying raw material ordering system within the constraints work culture prevalent in the company.
27 To provide the raw material suppliers with forecast of requirements by modifying raw material ordering system within the efficiency of the transporters.
28 To provide the raw material suppliers with forecast of requirements by modifying raw material ordering system within the business policy of the parent company.
29 To provide the domestic customers with prompt delivery by modifying domestic inquiry processing within the business policies of the parent company
30 To provide the domestic customers with prompt delivery by modifying the domestic inquiry processing within the work culture of the company.
31 To provide the domestic customers with prompt delivery by modifying the domestic inquiry processing within the constraints of transporters efficiency.
32 To provide the domestic customers with prompt delivery by modifying the domestic inquiry processing within the constraints of a rigid organisational structure.
33 To provide foreign customers with environmental friendly products and processes by modifying quality systems within the rigid organisational structure of the company
34 To provide foreign customers with environmental friendly products and processes by modifying quality systems within the work culture of the company.
35 To provide foreign customers with environmental friendly products and processes by modifying quality systems within the technology present in the company.
36 To provide foreign customers with environmental friendly products and processes by modifying quality systems within the business policy of the parent company.
37 To provide financial support to sourcing units by modifying profitability to sourcing units within the business policy of the parent company.
38 To provide financial support to sourcing units by modifying profitability to sourcing units within the work culture of the company.
39 To provide financial support to sourcing units by modifying profitability to sourcing units within the rigid organisational structure of the company.
40 To provide financial support to sourcing units by modifying financial support systems to sourcing units within the business policy of the parent company. |
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