Finding Hidden in Year Savings
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The webinar discusses strategies for achieving in-year savings in response to cash flow issues or procurement targets. It highlights four potential deliverables: raising cash, reducing cash outflows, and bringing forward savings, all of which may have significant risks and disruptive implications. The speaker emphasizes that while actions may come at a cost, they are necessary if the business requires immediate savings.
Finding Hidden in Year Savings
- 1. FINDING HIDDEN IN YEAR SAVINGS
- 2. Please note that your microphones have been muted for the duration of the webinar. Having technical issues? Should you have any technical issues, please let us know via the 'Questions' box on your GoToWebinar panel. Any questions for our Q&A? Send your questions through to us at any time via the 'Questions' box on your GoToWebinar panel and we'll answer them in the Q&A. Welcome to the webinar
- 3. Guy Allen Managing Director & Founder, Real World Sourcing
- 4. Imagine the Scenario Its June 21st. You get a call from your Finance Director What savings can you deliver this year?
- 5. Why Do We Need In Year Savings? If the call came from the Finance Director If the call came from the Head of Procurement – Profit Margins are under threat and need to be improved and/or – An Immediate Cash Flow problem – Annual savings target looks under threat
- 6. A Health Warning This webinar provides suggestions of what could be done However many of the options will have significant negative impact Consequently their inclusion here should not necessarily be taken as a recommendation
- 7. Disruption Remember these options will be disruptive Otherwise you would already have taken them!
- 8. 4 Potential Deliverables Raising Cash Reducing Cash Outflows Bringing Forward Savings The first 2 deliver real money to the bottom line in the current year. The final deliverable may have no impact to the organisation’s current year P&L
- 9. Raising Cash Selling Assets Extending current supplier contracts in return for a premium Contributions to marketing campaign Transfer/Sale of stock Write off Goods Received Not Invoiced Earlier Rebate payments AP Audit – to search for duplicate or payments errors
- 10. Reducing Cash Outflows Increase payment days Restrict invoice payment Implement travel ban Increase expenditure sign requirements Stop buying certain categories (eg Stationery) Hold a stock cupboard amnesty Reduce temp agency rates by 10% Serve notice on all temporary staff Reduce/cancel capital investment programmes
- 11. Bring Forward Savings Hold eAuctions – Quick to implement – Savings can be significant – Visible demonstration of activity – May undermine longer term strategy
- 12. Extend current contracts for a price reduction now Price arbitrage across sites/commodities Charge premium for taking part in bidding program Immediate price reduction from incumbent These recommendations may make no impact to the current P&L But they could save the Head of Purchasing their job!
- 13. Risks and Implications Message to the market place Corporate and social responsibility Reputational risk Partnership with suppliers Constraining future growth Reducing future cost reduction opportunities
- 14. In Summary Seeking in year savings can be driven by the need for cash or the need to meet Procurement targets Actions will be disruptive and usually come at a cost But if the business needs the savings, you have to do it!