Working Capital Quick Hits is a targeted, hands-on and proven approach to rapidly reduce inventory and free-up cash. We work side by side with our clients to deliver improvements in working capital and service levels whilst minimising operating costs.
Working Capital Quick Hits delivers fast
and sustainable improvements to supply chain planning policies, processes and systems.
Rapidly convert inventory into cash. The opportunity already exists within your business.
Given uncertain credit markets, the spectre of slowing demand and liquidity pressures, we are offering a proven, self funding ‘strike team’ to help our clients rapidly reduce inventories, improve stock availability and reduce supply chain costs as a percentage of sales.
Stated simply, this means you would only pay a percentage of actual results delivered, and as such, all work would be self-funding and cash flow positive.
Note that we helped Super Cheap Auto improve operating cash by $12 million in 12 months whilst improving availability in stores.
Typical proven benefits within 6-12 months at the same or better service levels include:
- 20-40% inventory investment reduction with a corresponding improvement in cash flow
- the ability to fund business initiatives from operating cash flow (OCF) improvements
- improved return on capital employed (ROCE) and compressed cash-to-cash cycles
- improved debt to equity ratios
- 10-15% reduction in supply chain costs & improved operating efficiencies
- ‘strike team’ work funded from actual delivered results
- minimum 3:1 returns
- pay back within 12 months
- proven, consistently successful methodology
- guaranteed results
Following is a brief summary of what the strike team does to deliver the rapid and sustainable results within 6-12 months:
- conduct a bottom-up fact based analysis using powerful, proprietary tools to identify opportunities to optimise inventory mix; by doing so, we know exactly where the opportunities are and what specifically needs to be done to realise them
- ‘dive into the detail’ and work side-by-side with the business in a practical, operational capacity to deliver the results and transfer knowledge and sustainable capability to your team
- ‘turbo charge’ existing systems and processes via enhanced configuration, system settings and exception-based process support
- quickly implement an exception-based performance management framework to provide visibility and the necessary ‘levers’ to control business outcomes
- adds both simplicity and sophistication into the demand and inventory planning process
We have a proven, consistent track record of results delivery – please see below for other real client examples.
Super Cheap Auto (auto parts, tools & accessories importer & retailer) – results within 12 months
- 12% inventory reduction
- $12m improvement in operating cash flow
- Out of Stocks reduced from 5% to under 3%
- Gross Margin improvements in depressed retail sales environment
"The positive results the Group has achieved in terms of gross margin and working capital control has really shone through in terms of the cash flow statement where our operating cash flow has enabled us to fully fund the roll out of the entire Group both from a fixed asset and working capital perspective. Breaking that down in a little more detail, the tight control on stock, while improving our in-store stock position, has generated in itself a $12 million benefit from an operating cash flow perspective."
Gary Carroll, Chief Financial Officer, Super Cheap Auto Group,
Full Year Results presentation to the Australian Stock Exchange, August 2006 |
Symbion Pharmacy Services (wholesale pharmaceutical distributor) – results within 12 months
- 26% inventory reduction
- service levels increased to 97%
- improved turn rates
- increased forecast accuracy
"As a high volume wholesaler to the competitive pharmacy market, getting our inventory mix right is critical. GRA helped us increase our service levels to over 97% and reduce inventories by 26%. A great result for our customers and our balance sheet. We continue to improve on these results, increasing our competitive advantage."
Terry Hayes, Demand Manager, Symbion Pharmacy Services
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The CPI Group (paper distributor & light manufacturer) – results within 12 months
- $14m or 31% inventory reduction
- service levels increased from 62% to 96% in 7 months
- purchasing effort reduced from 6 people over 2 weeks to 1 person over 3 days
"Now I do the purchasing each month for all 14,000 items in three days - that used to take six people two weeks..."
Michael Byrne, CPI Operations Manager
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Bonland Dairies (FMCG cheese product distributor) – results within 12 months
- eliminated $2 million in excess stock
- named Woolworth’s “best supplier for service levels inbound to stores” 11 months after Woolworth’s threatened to de-list Bonland due to poor service level performance
- awarded $60 million of Woolworth’s private label business due to exceptional service level and supply chain performance
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Snap Fresh / QANTAS (QANTAS-owned food manufacturer & distributor) – results within 12 months
- re-structured distribution network and inventory policies to deliver 15% annual savings in distribution costs
"Trundle said GRA assessed Snap Fresh’s stock holding procedures, its revenue information and handling/delivery costings. He said that following the GRA advice, the 15 per cent savings were achievable by early 2007"
‘Qantas: Savings of 15% from GRA’ Food Management News, July 2005
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The Royal Australian Air Force (spare parts & repairables) – results within 12 months
- $186m inventory reduction
- 67% reduction in understocks
- 70% workload reduction (measured by the reduction in purchasing transactions required)
"We saved $14m in six months. We’re used to being promised these kind of numbers; we’re just not used to having them delivered.”"
Wing Commander, RAAF |
In summary, GRA offers a proven, completely self funding process that works at the operational level to deliver rapid and sustainable inventory, service and cost results.
These are challenging times, and cash is king. We can help. Call Carter McNabb on (03) 9421 4611 to discuss.
View theGRA Rapid Cash Generation & Quick Hits brochure online or download the pdf below.
Other GRA Professional Services include:
