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Managing Cost &
Optimizing Efficiencies
Presenter:
Ken Gunn
Caliber Consulting
Operational and Organizational Internist
Format—Jump In!!!
• Free form discussion with limited slides except to guide flow and direction of dialogue
Outline
• Expectations• Who You are and Symptoms
• Where Does It Hurt? POP!
• Market Past, Present, Future• Ongoing Consolidation
• The Additional Costs of Doing Business:• $$$$
• The New Opportunities• $$$$$$
Outline
• The Data Snowstorm & Frostbite• How Deep Is It?
• Where to Start—The Assessment• People First!
• Pick Your Battles• Change is a Bad Word!
• The Battle Plan • The Victory and What is Next……
• Part of Company Fabric• Follow the Money $$$-- Good customers
and Suppliers!
Who U R, Symptoms ( POP’s) & Expectations
• Company• Business mix• Overall sales volume• Back office system(s)• Other systems you utilize• Current data integration• POP’s• Expectations
Market—P-P-F
• 1990 # Lube marketers—oil co’s
• 2005 # Lube marketers—oil co’s
• 2020 # Lube marketers—oil co’s
• Implications
Additional Costs
• People• Technology—numbers of systems—
can they plug and play?• Geography• A/R exposures/capital employed• Market volatility—does the past help
predict the future?
Coupled with margin shrink!
Opportunities
You Hold The Keys—Try One!
New Opportunities
• Play the Aggregator
• Leverage Size
New Opportunities
• Better access to technology with “new” size not scalable for smaller companies
• Be the Driving
Hub
Scale Up for Best Practices
• Customer Order Centers• Web based tech support• “Ask Jeeves”• Web based ordering• Data Integration• Back Office—ASP—in-house and out-
house
Scale Up for Best Practices
• Sales Mgt—ACT and Goldmine or similar
• Routes versus go when they call—can you still afford the fuel costs?
• Customer inventory mgt—dovetails to routes
• Cycle inventories for your company
Scale Up for Best Practices
• “FISH”—toss it• Slow means Slow—order when needed• Sonar for bulk lubes• Warehouse/truck scanning• Commissions on net margin • Tiered commissions and bonus for EFT
Scale Up for Best Practices
• Equipment ROI’s—include everything• Daily and weekly report quick analysis
—costs and gross margins• Month-end should be a yawn—seen it
already• Contingency Planning—think New
Orleans
Where to Start
• Sponsors• Owner and or exec team• Resources—people and a budget—”no
mother may I every time” within a specific scope
Where to Start
• Team Facilitator/Coordinator• Can be anyone• Non-judgemental• Good listener• Handles conflict and strong willed people• Time and due date oriented
Where to Start
• Team Members—No “I” in Team• Can be anyone• Part time and full time on team• Team oriented• Allocated time to participate• New and old hands
Where to Start
Where to Start
• Contributing Participants• Anyone that the data touches or impacts
• Includes—employees, customers and suppliers
• Solicit candid, open
feedback to collect ideas
and clarify POP’s
—even small ones!
Where to Start• Communicate!!!• Do not operate behind closed doors• Promote activities and projects with
the why that includes benefits--WIFM
Pick Your Battles
• Remember…Change is Scary
Pick Your Battles
• The POP list
• Prioritize and Include Quick Hits as a Category
• Hit singles to start• Get comfortable with process—work out
kinks• Reward the busy folks with help• Target a “naysayer”
Pick Your Battles
• Does not have to fix 100%--small steps still get you toward your ultimate goal
• Recognize mistakes, talk about them, learn and move on
Battle Plan
• Cost effective outsourcing with technology expertise, support and supplier/back office relationships
My Change Pet Peeve “The Data Snowstorm”
• Sources of data streams—list
• Number of people involved—how many people per “X” new gallons
• Error rates and rework
• Get numb to the problem—co-dependent
• Recognize the onset of frostbite• Stuck in a rut—can’t catch up• Count the W2’s • Count the file cabinets
Integrate
Consolidate data so it is coming from as few sources as possible.
Consider a service to translate and format data for integration such as a DTN or have your back office build the interfaces
““One source, One source,
one format, one format,
one interface”one interface”
PricesPrices
• Entering prices manually____(time) x $__/hr = $______
• Incorrectly entered prices lead to:• Correcting customer invoices• Invoicing customers @ incorrect
price – AND – not being able to correct…
• Correcting Supplier invoices
• Losing Customers…
• Buying from wrong rack Room for Error?
Supplier InvoicesSupplier Invoices
• Eliminates entering and matching invoices manually
• Electronic processing facilitates:• Identifying missing paperwork & invoices faster• Eliminates looking for “missing” invoices• Catch incorrect supplier invoices faster• More accurate cash flow projection
• Catch incorrect supplier invoices faster
• More Accurate Cash Flow Projection Hi! My name is Joe. I am a paperholic!
Help me!
Draft Notices (EFTs)Draft Notices (EFTs)
• Entering EFTs manually____(time) * $__/hr = $______
• Electronic processing facilitates:• Better Cash Planning
• More accurate payables
• Faster identification of problem invoices• Customer may not be invoiced • Payment on invoices that are not yours…
Joe’s Filing System
1. Increased Revenue $ ________
2. Displaced Costs $ ________
3.Avoided Costs $ ________
4. Redirected Costs $ ________
5. Intangible (Company Image) $ ________
6. Training and Turnover $ ________
TOTAL Benefits and/or Saving $ Sum of Benefits
COSTS (investment)
Products $ ________
Services $ ________
Maintenance $ ________
TOTAL Costs (investment) $ Sum of Costs
TOTAL NET BENEFITS $ Benefits - Costs
*Payback period :
Value JustificationValue Justification
Victory and What Next….
• There is no finish line—just battles you win!!
Victory and What Next….
• Break thru paradigms! Make advancement (change) a positive!! & part of your company fabric!
Victory and What Next….
• Read the tea leaves continuously for opportunities!!
Open Discussion & Questions?
