SlideShare a Scribd company logo
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]
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
Broad Industry Experience
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.

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Finding Extra Profit With ERA

  • 1. Turning Overhead Expenses… into Profits Eb Schmidt, Senior Consultant Expense Reduction Analysts (413)441-5718 [email_address]
  • 2.
  • 3.
  • 4.
  • 5. 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
  • 6. 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%
  • 7.
  • 8.
  • 9.
  • 10.
  • 12.
  • 13.
  • 14.