Do More with Less – Or is it Less with Less?

Monday October 31st, 2016 at 10:00am
Written by Chuck Mouranie - Partner and Managing Director

Organizations are constantly challenged with increased market pressures and declining budgets. This is even more prevalent as we approach a slowing economy. In order to optimize staff efforts, tough decisions are required, potentially resulting in layoffs, elimination of benefits, reduced customer support, or closing facilities.

The result of this “more with less” philosophy ultimately causes increased stress on existing staffs. It tends to place more burden on the highest performers who remain from downsizing. Eventually, these performers become disenchanted with the organization, yielding reduced customer satisfaction and inevitable revenue reduction. Another downside of this decision is when valued employees give up on the company or organization and seek employment elsewhere.

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WIOA - Integrated Services in One-Stop Centers

Wednesday October 5th, 2016 at 7:37am
Written by Terri Kaufman - Workforce Development Specialist

One of the most significant changes in WIOA is the requirement for the “integration of services” in One-Stop Centers. What does this mean? It means aligning services and resources to better service job seekers and employers. Integration of services in the One-Stop Center helps clients because it is customer focused, not program focused.

Why have an integrated One-Stop Center?

  1. WIOA requires it
  2. Provides better client services
  3. Increases performance
  4. Leverages resources
  5. All of the Above

Every partner within the center must support a common vision and support a process that is designed to serve clients (both job seekers and employers). Centers must focus on delivering high-quality career services that may require aligning and streamlining services. Centers must make this monumental shift to better service clients.

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Eight Things You Must Do When Creating a Turnaround Plan

Friday September 9th, 2016 at 10:00am
Written by Jim Bitterle - Consulting Managing Partner

Is your company struggling financially?

If so, it may be time to create a turnaround plan. Turnaround plans assist companies in identifying the cause of underperformance; reverse it and return to profitability. There are a few essential elements to any financial turnaround business plan. Following are some basic actions and best practices to consider.

  1. Don’t waste time. If the company is performing poorly, don’t procrastinate. I’ve seen far too many financial disasters occur simply because managers and advisors are passive. If things are degrading, act now. Time can be your friend, or it can be your enemy. For turnarounds, unfortunately, it is too often the latter.

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Is Running a Business like a Sport?

Monday May 16th, 2016 at 10:10am
Written by Chuck Mouranie - Partner and Managing Director

I find it interesting that everyone knows who won the big game, but few people know how their business is truly performing. I am not sure if this is a lack of availability of information, devoid of individual ownership, or simply a lack of interest.

Every team must have a goal. It could be winning the Stanley Cup, World Series, or increasing sales. Strong teams and companies both agree on a goal and laser focus their attention to attain the objective. All decisions are made within the backdrop of this target. They are similar of focus and every team member is on-board, driving to the bottom line --- winning.

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Are We in a Recession?

Wednesday April 13th, 2016 at 8:16am
Written by Chuck Mouranie - Partner and Managing Director

I find the talking heads from Fox Business and Bloomberg to be quite entertaining. They appear to have vast business and economic backgrounds, yet can’t agree on whether we have entered into recession or are on a path of expanding growth. They both could be right.

Traditionally, a recession is deemed to have occurred if the gross domestic product (GDP) shrinks for three consecutive quarters. This theory may no longer apply to a world economy. China’s GDP has declined to approximately 6.5% growth from double-digit territory. This is suspect as the Chinese Government restricts data defining the economy. In addition, Japan, Russia and the European Union economies have been in the tank for years. These reductions impact the US, and commodity prices (raw metals, oil, consumer goods, etc.) fall as these major world producers demand for these goods drop.

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When to Use an Asset-Based Lender

Tuesday January 26th, 2016 at 7:30am
Written by Jim Bitterle - Consulting Managing Partner

Virtually every mature company has gone through rough financial times. If you’re around long enough, your company will go through rough times again. When this happens, you may get moved to your bank’s “Special Assets Group.” Many banks have different names for this group, but in generic terms, they are all “workout” groups. The purpose of a workout group is to reduce the bank’s risk. Typically, this is accomplished by getting rid of accounts that have become too risky. In some cases, the workout group will work with the company to remediate it, then return the company to the original lender. Unfortunately, this scenario occurs infrequently. Most workout scenarios require the company to find an alternative lender, then pay off the current bank.

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Why Your Business Cannot Survive without a Good Cash Forecast

Wednesday October 14th, 2015 at 8:00am

Written by Nehal Desai - Associate Consultant with EDSI

ndesai@edsisolutions.com

 

Cash availability is critical for any business. Whether to pay vendors, creditors, or staff, having cash on hand is essential. Why then, is a good cash forecast so often overlooked and underutilized?  Does your business maintain an accurate cash forecast? Are you using your forecast correctly to make the most effective and profitable business decisions? Having an accurate cash forecast can help identify potential future shortcomings and allow a business to take corrective actions to ensure their operations run smoothly! Read on to understand the basics of a cash forecast and how it can aid your decision-making process in times of low or high growth.

We often see businesses show increased sales and positive profits, yet, they still run out of cash. Simply stated, cash flow is the lifeblood of a business.

A cash forecast can accurately express a firm’s cash position in future periods. Commonly, a 13-Week Cash Forecast and an Annual Operating Plan (AOP) are preferred forecasting methods. The 13-Week Cash Forecast outlines the cash position for the upcoming 13 weeks, while the Annual Operating Plan (AOP) shows the monthly cash needs and surpluses for each month in a fiscal year. Most firms create an AOP at the start of the year and update on a regular basis. The 13-Week Cash Forecast is often used when cash is becoming (or has already become) a concern. It is a great way to manage cash in the short-term and make strategic changes to manage the cash position.

So how can cash forecasts be utilized in business decisions?  Cash forecasts help companies manage their growth, working capital and lines of credit with lenders. 

Imagine business is booming. Customer orders are rolling in faster than you can handle. You are ecstatic as profits are going through the roof. Soon, you realize that although profits are soaring, more cash is leaving your bank account than coming in. Now cash is not available to pay key vendors, and orders need to be put on hold. Sadly, despite the increased sales orders, the company is stuck without inventory and unable to fulfill demand. A 13-Week Cash Forecast, coupled with the right strategies, could have prevented this.  Cash needs would have been estimated and preventive measures to avoid cash shortages executed.  

Now imagine an opposite scenario. The sales forecast is down. There is hope on the horizon, but you are unsure of what your cash needs are for the next month. The cash forecast can help determine when collections and payments occur using the predictive nature of both sides of the transactions. Utilizing the forecast, firms can be aggressive in their collections when they foresee an upcoming cash shortage, or use the forecast to negotiate an increased line of credit with creditors. A cash forecast helps your company get ahead of the situation and take appropriate action to lessen or eliminate negative impacts associated with cash constraints. 

A lack of positive cash flow and insufficient credit to finance the business is a common issue for underperforming businesses. A well-formulated cash forecast is the perfect solution to help manage a company’s cash and credit, and equip it with the right tools for long-term success


What steps are you taking to ensure that your company has the necessary cash available to ensure success? Please let us know how we can assist you in your efforts.

If you are interested in gaining more information regarding our financial consulting services, please contact me at ndesai@edsisolutions.com

Click here for more info about our consulting solutions on our website. 

 

Using the Theory of Constraints as a Key Element in Your Growth Strategy

Wednesday August 26th, 2015 at 8:30am

Written by Jim Bitterle - Managing Partner with EDSI 

jbitterle@edsisolutions.com

 

As we work with clients to develop Growth and Diversification Plans (Strategic Plans), we consistently find constraints that limit a company’s ability to grow. Given this, it’s imperative that the Theory of Constraints (TOC) is integrated with your company’s strategy.

If you don’t know what TOC is, here it is in a nutshell. It’s a five-step process to identify and eliminate bottlenecks while achieving corporate goals. Here are the five steps:

  1. Identify the constraint (the process that limits the company’s throughput)
  2. Exploit the constraint
  3. Subordinate everything to the system’s constraint
  4. Elevate the system’s constraint
  5. Identify the next constraint
 

When applying TOC, we often find internal constraints such as equipment, working capital, skilled labor, etc. limit throughput. However, once these constraints are broken, the “market” becomes the next constraint. What does that mean? It means the company needs more sales.  

When sales become the constraint, it is important that the organization becomes entirely sales-oriented. Functions and processes that require modification often include:

  • Pricing
  • Quoting
  • The mix between new business development and account management activities
  • Promotions
  • Go-to-market strategies

If sales are your constraint, remember to apply TOC methodologies to keep everyone focused on elevating the business’s constraint. And if you’re creating a Growth and Diversification Plan, be sure to include TOC into your plan.

Click here for more information about Operational Improvement on our website. 


Improving Your Inventory Records with Cycle Counting

Wednesday June 24th, 2015 at 8:32am

Written by Jim Bitterle - Managing Partner with EDSI 

jbitterle@edsisolutions.com

 

Are your perpetual inventory records accurate?  

Inaccurate inventory records are often a root cause of many issues for companies.  Some of the resulting issues include:

  • Poor on-time delivery records
  • High scrap rates
  • Excess inventory levels
  • High inventory carrying costs
  • Bloated labor costs
  • High expediting costs

If your company has any of these issues, assess your perpetual inventory accuracy to ensure it is not the root cause.   If it is, we suggest implementing a modern, cycle counting process.

Cycle counting is a set of processes by which small amounts of inventory are counted every day.  The counts are then compared against perpetual inventory records to ensure accuracy.  Whenever discrepancies between cycle counts and records appear, a discrepancy analysis is completed to determine the source of error.  

Often, the discrepancy analysis finds a deeper problem that requires resolution.  Samples of these problems include:

  • Inaccurate bills-of-materials
  • Improper material handling processes and data input
  • Inadequate warehousing controls
  • Improper labeling from vendors
  • Poor shrinkage standards

Cycle counting has little value unless it is done correctly.  Following are some keys to ensuring your cycle counting processes work effectively:

  • Conduct the counts daily.
  • Segregate inventory into High Usage (A items), Medium Usage (B items) and Low Usage (C items) categories.  We suggest counting all A items at least once every 2-4 weeks.  B and C items can be counted less frequently.
  • Perform discrepancy analysis immediately after the counting process stops.
  • Fix root cause issues as soon as possible.
  • Conduct counts before activity begins in the plant or warehouse.  Counting can also occur after daily activity has ended.
  • Ensure all data entry and batch processing is complete before counting.
  • Set accuracy standards and track accuracy on an ongoing basis.

Inaccurate perpetual inventory records cost American companies billions of dollars every year.  If you haven’t already, I suggest you assess your company’s perpetual inventory accuracy as soon as possible. If we can help in any way, please feel free to contact me at jbitterle@edsisolutions.com

Click here for more information about Operational Improvement on our website. 

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I strongly recommend EDSI as a vendor for any workforce knowledge retention needs. Jodi Wadel; Organization Development Consultant - Pennsylvania American Water Company

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