Finding Extra Profit With ERA

Turning Overhead Expenses… into Profits Eb Schmidt, Senior Consultant Expense Reduction Analysts (413)441-5718 [email_address]

The World is Flat…. The Pressure is ON! ,[object Object],[object Object],[object Object],[object Object]

CFO’s see the challenge … ,[object Object],[object Object],[object Object],Source: CFO Magazine

Trends Within Mid-Sized Companies ,[object Object],[object Object],Source: Aberdeen Group. Tim A. Minahan, "Sourcing in the Mid-Market: The Supply Management Echo Boom". 2006 Lack a formal sourcing or procurement organization Uncertain how to begin strategic sourcing initiative 0% 20% 40% 60% 80% 100% 38% 50%

Lowering Non-core Costs Can be VERY Profitable… A 20% cost reduction = 40% increase in Net Profit $4M in expense savings = $40M in revenue Column1 Today 20% Cost Reduction Equivalent In Sales Revenue $ 100 $ 100 $ 140 Direct operating costs $ 35 $ 35 $ 49 Labor costs $ 35 $ 35 $ 49 Non-core indirect costs $ 20 $ 16 $ 28 Net profit $ 10 $ 14 $ 14 After tax (40%) $ 6 $ 8 $ 8 Business Value = 6 P/E $ 36 $ 48 $ 48

Where We Commonly Find Hidden Profits… Expense Category Ave Savings General Business Insurance 21% Freight 18% Office Supplies 35% Small Package Freight 20% Temporary Labor 20% Packaging 21% Merchant Card Fees 33% Factory Consumables 22% Telecommunications 26% Waste Management 29%

Process Overview ,[object Object],[object Object],[object Object],[object Object],Complete analysis of your business and requirements PROCESS: Select and manage supplies and prepare recommendations Implement solutions, measure and monitor ongoing Activities: ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Best Practices ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

This Process Yields Predictable Results ,[object Object],[object Object],[object Object],[object Object],*Based on over 10,000 Worldwide ERA projects over 14 years

ERA at a Glance… ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

ERA Compensation ,[object Object],[object Object],[object Object],Bottom line – if you don’t save money, then it costs you nothing!

[object Object],[object Object],Thank You For The Opportunity.

Finding Extra Profit With ERA

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