This document discusses how the economic crisis negatively impacted automotive suppliers' working capital levels. Many suppliers had to restructure operations and reduce trade working capital to match lower demand. Now as demand improves, suppliers may face capacity constraints and liquidity pressures as they need more working capital to ramp up production. Benchmarking suppliers' working capital requirements can help assess risks. Suppliers that maintained strong liquidity during the recovery may gain a competitive advantage. Small and mid-sized suppliers in particular may be higher risk due to more limited financing.
1. Demographic changes, especially the aging of America and growth of ethnic markets, were seen as the most significant industry trends according to survey respondents.
2. Work site and bank sales channels were also viewed as opportunities for growth.
3. Translating strategy into effective expense management and technology use remains a challenge for some companies, despite most having clear strategic visions.
This document outlines MeadWestvaco's strategy to deliver shareholder value through profitable growth and margin expansion. It discusses focusing on packaging, driving growth through commercial excellence, innovation, emerging markets, and expanded participation. MWV aims for revenue growth of 5%+, margin expansion of 50-100 bps, earnings growth of 7-10%, and dividend yield of 3-5% to achieve top quartile shareholder returns.
Goodrich Corporation Chairman and CEO Marshall Larsen presented at the Citi 21st Annual Global Industrial Manufacturing Conference. Larsen provided an overview of Goodrich's balanced portfolio, strategic focus areas, and outlook for commercial aerospace, defense, and aftermarket sales. He noted record commercial aircraft orders in 2007 and expectations for continued production rate increases and aftermarket growth.
This document discusses competitive advantage in mature industries. It notes that in mature industries, opportunities for differentiation advantage have diminished as products become standardized and buyers are more knowledgeable. Cost advantages are also difficult to sustain as process technologies diffuse. However, the document argues that maturity does not preclude opportunities for competitive advantage and innovation. It outlines that in mature industries, competitive advantage is increasingly based on cost leadership rather than differentiation. Effective strategies focus on tightly controlling costs and increasing sales while maintaining product quality and customer service. The document uses McDonald's as an example of a company that achieves cost advantage through stringent control and monitoring of materials and processes.
This document provides an overview of Goodrich Corporation presented at the 25th Annual Industrial Select Conference hosted by Lehman Brothers. It summarizes Goodrich's balanced portfolio, including original equipment and aftermarket sales across commercial aerospace, defense, and space markets. Charts are included showing trends in commercial aircraft delivery forecasts, key platform maturity, and growth in the A320 fleet.
The document discusses economically sensitive stocks that may perform well in the current economic environment of slow, mid-cycle growth. It highlights top stock picks from the industrial, business services, and consumer sectors that have compelling risk/reward profiles given slowing macroeconomic indicators but continued reliance on upper-income consumers. Analysts believe the global economy is transitioning from early to middle stage of the business cycle and see opportunities in longer-cycle projects, construction, and companies with aftermarket revenues.
Finding The Upside In The Downturn Cme 4 June09 V Fwilliesandjoe
The document summarizes the current economic downturn and its impact on the chemical industry. It notes that until 2008, the chemical industry was doing well financially but the global financial crisis created difficult conditions described as a "perfect storm." It suggests that tough times will continue through 2009 and full recovery may not occur until 2012-2013. However, it also argues that the downturn presents opportunities for companies to change their strategies and business models in ways that could improve their competitive positions long-term. Mergers and acquisitions may continue to impact the industry as companies adapt to the new environment.
Pi Inter Solar North America Presentationmstmathieu
The document discusses best practices for renewable energy development in emerging markets. It outlines Partnership International, a consulting firm that provides renewable energy advisory services in over 50 countries. The presentation identifies three key factors for solar development success: appropriate policy, technology, and financing. It then discusses best practices for renewable energy development by region, including Africa, Asia, the Caribbean, and Southeastern Europe/Turkey.
1. Demographic changes, especially the aging of America and growth of ethnic markets, were seen as the most significant industry trends according to survey respondents.
2. Work site and bank sales channels were also viewed as opportunities for growth.
3. Translating strategy into effective expense management and technology use remains a challenge for some companies, despite most having clear strategic visions.
This document outlines MeadWestvaco's strategy to deliver shareholder value through profitable growth and margin expansion. It discusses focusing on packaging, driving growth through commercial excellence, innovation, emerging markets, and expanded participation. MWV aims for revenue growth of 5%+, margin expansion of 50-100 bps, earnings growth of 7-10%, and dividend yield of 3-5% to achieve top quartile shareholder returns.
Goodrich Corporation Chairman and CEO Marshall Larsen presented at the Citi 21st Annual Global Industrial Manufacturing Conference. Larsen provided an overview of Goodrich's balanced portfolio, strategic focus areas, and outlook for commercial aerospace, defense, and aftermarket sales. He noted record commercial aircraft orders in 2007 and expectations for continued production rate increases and aftermarket growth.
This document discusses competitive advantage in mature industries. It notes that in mature industries, opportunities for differentiation advantage have diminished as products become standardized and buyers are more knowledgeable. Cost advantages are also difficult to sustain as process technologies diffuse. However, the document argues that maturity does not preclude opportunities for competitive advantage and innovation. It outlines that in mature industries, competitive advantage is increasingly based on cost leadership rather than differentiation. Effective strategies focus on tightly controlling costs and increasing sales while maintaining product quality and customer service. The document uses McDonald's as an example of a company that achieves cost advantage through stringent control and monitoring of materials and processes.
This document provides an overview of Goodrich Corporation presented at the 25th Annual Industrial Select Conference hosted by Lehman Brothers. It summarizes Goodrich's balanced portfolio, including original equipment and aftermarket sales across commercial aerospace, defense, and space markets. Charts are included showing trends in commercial aircraft delivery forecasts, key platform maturity, and growth in the A320 fleet.
The document discusses economically sensitive stocks that may perform well in the current economic environment of slow, mid-cycle growth. It highlights top stock picks from the industrial, business services, and consumer sectors that have compelling risk/reward profiles given slowing macroeconomic indicators but continued reliance on upper-income consumers. Analysts believe the global economy is transitioning from early to middle stage of the business cycle and see opportunities in longer-cycle projects, construction, and companies with aftermarket revenues.
Finding The Upside In The Downturn Cme 4 June09 V Fwilliesandjoe
The document summarizes the current economic downturn and its impact on the chemical industry. It notes that until 2008, the chemical industry was doing well financially but the global financial crisis created difficult conditions described as a "perfect storm." It suggests that tough times will continue through 2009 and full recovery may not occur until 2012-2013. However, it also argues that the downturn presents opportunities for companies to change their strategies and business models in ways that could improve their competitive positions long-term. Mergers and acquisitions may continue to impact the industry as companies adapt to the new environment.
Pi Inter Solar North America Presentationmstmathieu
The document discusses best practices for renewable energy development in emerging markets. It outlines Partnership International, a consulting firm that provides renewable energy advisory services in over 50 countries. The presentation identifies three key factors for solar development success: appropriate policy, technology, and financing. It then discusses best practices for renewable energy development by region, including Africa, Asia, the Caribbean, and Southeastern Europe/Turkey.
The document summarizes McKesson Corporation's investor/analyst day presentation from June 7, 2002. It discusses the company's strategy, financial performance, goals for its supply management, information solutions, and other business segments. Key points include revenue and earnings growth in recent years, goals to increase market share and margins across various segments, and continued investment in new products and services. Financial metrics like EBIT, EPS, cash flow, and return on capital are presented for 2000-2002 with most showing strong growth.
Moving from a Push-Based, Manufacturing Centric Supply Chain to a Pull Based, Demand-Driven Model
By Matt Tichon & Guillermo Fumero
LogiChem 2011 will be the event's tenth anniversary and an opportunity for the most senior chemical supply chain & global logistics directors from the European chemicals community to come together once again share experiences, make new contacts and benchmark the latest chemical supply chain initiatives.
Not only will LogiChem 2011 be a chance for the chemical industry to reminisce about the last ten years but an opportunity to shape the next decade. To celebrate a decade of LogiChem, there will be an exciting three day programme filled with networking opportunities in our new location, Antwerp.
Achieving excellence in production and supplyPwC Russia
В этой брошюре мы сосредоточили свое внимание на пяти вопросах, решение которых в существенной степени определяет разницу между высочайшим, удовлетворительным и средним качеством в промышленном производстве.
Infosys – Manufacturing Industry Restructuring | IT Infrastructure ComplexityInfosys
B.G. Srinivas of Infosys explains four strategies to restructure manufacturing industries, to be leaner and more nimble, and to overcome the current economic crisis
Price optimization uses three predictive models - claim propensity, market situation, and customer behavior - to set prices that maximize profits given constraints. An example is Parker Hannifin, which implemented demand-based pricing and saw profits rise from 7% to 21%. Price optimization integrates these models to predict how customers respond to price changes and identify optimal pricing strategies.
2009 Construction Industry Strategy Survey By FmiMike Purdy
Results of a 2009 survey of 230 general contractors, construction managers, large specialty trade and heavy civil contractors. Conducted by FMI Corportation - Management Consulting.
Etude annuelle Aéronautique & Défense "Programmes under pressure" (2011)PwC France
PwC a interrogé 28 dirigeants de 23 entreprises chefs de file du secteur de l’aérospatial et de la défense au Brésil, au Canada, en France, en Allemagne, en Inde, au Royaume-Uni et aux États-Unis, entre février et mai 2012. Retrouvez toutes nos publications sur : http://www.pwc.com/publications
The document summarizes the key findings of a 2010 supply chain survey. It finds that: (1) Half of companies do not review their supply chain strategy as often as needed; (2) One-third of companies do not have future proof plans to account for various possibilities in the next few years; (3) More than half of companies are concerned with inventory costs and transportation costs. The document provides recommendations around measuring, assessing, planning and developing robust strategies to manage risks and variability in an uncertain future.
This document contains a presentation by Best Buy Co., Inc. to the William Blair Growth Stock Conference on June 18, 2008. The presentation discusses Best Buy's history of revenue and earnings growth, fiscal year 2009 guidance, opportunities for international growth through new ventures and categories, and strategies for expanding in markets like Canada, China, and Europe through a new joint venture with Carphone Warehouse. The presentation outlines Best Buy's vision of achieving significant market share globally in the consumer electronics retail industry.
Only 50% of mergers actually increase shareholder value. Why? Often, one of the culprits is product complexity. Companies that manage the complexity of a newly combined product portfolio can capture value, smooth the overall merger process
The document is an investor presentation for AMG Advanced Metallurgical Group from July 2012. It provides an overview of AMG, including that it is listed on the NYSE Euronext Amsterdam exchange, had 2011 revenues of $1.351 billion and EBITDA of $110.1 million. It also summarizes AMG's business units, products, end markets, strategy to increase shareholder value through revenue growth, productivity gains, and acquisitions.
This document provides an overview of UBS Aerospace and Defense's Boston Investor Day presentation on May 14, 2008. It includes forward-looking statements and discusses Goodrich Corporation's portfolio attributes, strategic imperatives, recent highlights, sales by market channel, aerospace and defense themes, and outlook for commercial and defense markets. The presentation focuses on balanced growth opportunities in commercial aircraft original equipment, aftermarket, and defense and space products and services.
CME Group reported solid first quarter 2009 financial results, with total revenues of $647 million, total operating expenses of $252 million, and net income of $213 million. The company achieved a pre-tax operating margin of 61% and diluted earnings per share of $3.20.
Solving For The Supply Demand Mis-Match: Strategy and Case Studykelly12504
Presented at ACS 2004 Symposium. ACS is an educational extension of APICS Region XI representing twenty-four APICS chapters from North Carolina, South Carolina
Supply Chain Risk Management A Delicate Balancing Acthenrydao
This document discusses supply chain risk management. It begins by providing examples of supply chain disruptions experienced by various companies and the financial and other consequences. It then categorizes different types of supply chain risks and discusses how to evaluate risks based on their probability and potential impact. The document presents various quantitative models and methods that can be used for supply chain risk analysis, such as deterministic and stochastic analytical models. It also provides an example of how IBM evaluates risks in its own product supply chains.
Median home prices in Pasadena declined 7.2% in 2009 compared to 2008, though sales volume increased 26%. Single family home sales rose 32% with a median price of $599,000, while condo/townhome sales grew 23% with a median of $430,000. The housing market showed signs of stabilizing in July 2009 with the strongest sales levels seen in three years and prices holding steady. Inventory remained higher for condos/townhomes compared to single family homes.
Mercado Inmobiliario de Marbella T1 & T2 2013Lucas Fox
El documento resume el estado del mercado inmobiliario en Marbella, España. Señala que las transacciones y visitas han aumentado en los últimos años y que el mercado parece haber tocado fondo, con un aumento esperado en las transacciones de compraventa en 2013, especialmente en el mercado de alta gama. Los precios de las propiedades de lujo se han mantenido estables, con demanda continua en áreas exclusivas. El director de Lucas Fox Marbella cree que el mercado está empezando a mejorar.
Social media junction alistair helm bloggingAlistair Helm
The document provides advice for maintaining a compelling blog through using PRAISE principles: praise yourself occasionally to stay motivated, be predictable with your posting schedule, keep content real and relevant to readers, analyze topics at a deeper level, include images to enhance posts, and maintain a single consistent voice and style to engage readers.
El documento describe la organización administrativa del Imperio Inca, incluyendo su uso de un sistema decimal para organizar familias, quipus para contabilidad, y la yupana para cálculos matemáticos. El sistema decimal colocaba jefes sobre grupos de 5, 10, 50, 100, 1000, 5000 y 10000 familias. Los quipus usaban nudos de colores en cuerdas para llevar registros numéricos, mientras que la yupana realizaba sumas, restas y multiplicaciones con granos de maíz.
This document provides an overview and summary of KPMG's 2010 Global Auto Executive Survey. The survey polled 200 auto industry executives from 24 countries between September and November 2009. It gathered perspectives on industry concerns, expectations, and challenges through 2014. Key findings included that overcapacity remains a major issue, innovation and emerging markets will be high priorities, and consolidation in the industry is expected to continue through mergers and acquisitions.
The document summarizes McKesson Corporation's investor/analyst day presentation from June 7, 2002. It discusses the company's strategy, financial performance, goals for its supply management, information solutions, and other business segments. Key points include revenue and earnings growth in recent years, goals to increase market share and margins across various segments, and continued investment in new products and services. Financial metrics like EBIT, EPS, cash flow, and return on capital are presented for 2000-2002 with most showing strong growth.
Moving from a Push-Based, Manufacturing Centric Supply Chain to a Pull Based, Demand-Driven Model
By Matt Tichon & Guillermo Fumero
LogiChem 2011 will be the event's tenth anniversary and an opportunity for the most senior chemical supply chain & global logistics directors from the European chemicals community to come together once again share experiences, make new contacts and benchmark the latest chemical supply chain initiatives.
Not only will LogiChem 2011 be a chance for the chemical industry to reminisce about the last ten years but an opportunity to shape the next decade. To celebrate a decade of LogiChem, there will be an exciting three day programme filled with networking opportunities in our new location, Antwerp.
Achieving excellence in production and supplyPwC Russia
В этой брошюре мы сосредоточили свое внимание на пяти вопросах, решение которых в существенной степени определяет разницу между высочайшим, удовлетворительным и средним качеством в промышленном производстве.
Infosys – Manufacturing Industry Restructuring | IT Infrastructure ComplexityInfosys
B.G. Srinivas of Infosys explains four strategies to restructure manufacturing industries, to be leaner and more nimble, and to overcome the current economic crisis
Price optimization uses three predictive models - claim propensity, market situation, and customer behavior - to set prices that maximize profits given constraints. An example is Parker Hannifin, which implemented demand-based pricing and saw profits rise from 7% to 21%. Price optimization integrates these models to predict how customers respond to price changes and identify optimal pricing strategies.
2009 Construction Industry Strategy Survey By FmiMike Purdy
Results of a 2009 survey of 230 general contractors, construction managers, large specialty trade and heavy civil contractors. Conducted by FMI Corportation - Management Consulting.
Etude annuelle Aéronautique & Défense "Programmes under pressure" (2011)PwC France
PwC a interrogé 28 dirigeants de 23 entreprises chefs de file du secteur de l’aérospatial et de la défense au Brésil, au Canada, en France, en Allemagne, en Inde, au Royaume-Uni et aux États-Unis, entre février et mai 2012. Retrouvez toutes nos publications sur : http://www.pwc.com/publications
The document summarizes the key findings of a 2010 supply chain survey. It finds that: (1) Half of companies do not review their supply chain strategy as often as needed; (2) One-third of companies do not have future proof plans to account for various possibilities in the next few years; (3) More than half of companies are concerned with inventory costs and transportation costs. The document provides recommendations around measuring, assessing, planning and developing robust strategies to manage risks and variability in an uncertain future.
This document contains a presentation by Best Buy Co., Inc. to the William Blair Growth Stock Conference on June 18, 2008. The presentation discusses Best Buy's history of revenue and earnings growth, fiscal year 2009 guidance, opportunities for international growth through new ventures and categories, and strategies for expanding in markets like Canada, China, and Europe through a new joint venture with Carphone Warehouse. The presentation outlines Best Buy's vision of achieving significant market share globally in the consumer electronics retail industry.
Only 50% of mergers actually increase shareholder value. Why? Often, one of the culprits is product complexity. Companies that manage the complexity of a newly combined product portfolio can capture value, smooth the overall merger process
The document is an investor presentation for AMG Advanced Metallurgical Group from July 2012. It provides an overview of AMG, including that it is listed on the NYSE Euronext Amsterdam exchange, had 2011 revenues of $1.351 billion and EBITDA of $110.1 million. It also summarizes AMG's business units, products, end markets, strategy to increase shareholder value through revenue growth, productivity gains, and acquisitions.
This document provides an overview of UBS Aerospace and Defense's Boston Investor Day presentation on May 14, 2008. It includes forward-looking statements and discusses Goodrich Corporation's portfolio attributes, strategic imperatives, recent highlights, sales by market channel, aerospace and defense themes, and outlook for commercial and defense markets. The presentation focuses on balanced growth opportunities in commercial aircraft original equipment, aftermarket, and defense and space products and services.
CME Group reported solid first quarter 2009 financial results, with total revenues of $647 million, total operating expenses of $252 million, and net income of $213 million. The company achieved a pre-tax operating margin of 61% and diluted earnings per share of $3.20.
Solving For The Supply Demand Mis-Match: Strategy and Case Studykelly12504
Presented at ACS 2004 Symposium. ACS is an educational extension of APICS Region XI representing twenty-four APICS chapters from North Carolina, South Carolina
Supply Chain Risk Management A Delicate Balancing Acthenrydao
This document discusses supply chain risk management. It begins by providing examples of supply chain disruptions experienced by various companies and the financial and other consequences. It then categorizes different types of supply chain risks and discusses how to evaluate risks based on their probability and potential impact. The document presents various quantitative models and methods that can be used for supply chain risk analysis, such as deterministic and stochastic analytical models. It also provides an example of how IBM evaluates risks in its own product supply chains.
Median home prices in Pasadena declined 7.2% in 2009 compared to 2008, though sales volume increased 26%. Single family home sales rose 32% with a median price of $599,000, while condo/townhome sales grew 23% with a median of $430,000. The housing market showed signs of stabilizing in July 2009 with the strongest sales levels seen in three years and prices holding steady. Inventory remained higher for condos/townhomes compared to single family homes.
Mercado Inmobiliario de Marbella T1 & T2 2013Lucas Fox
El documento resume el estado del mercado inmobiliario en Marbella, España. Señala que las transacciones y visitas han aumentado en los últimos años y que el mercado parece haber tocado fondo, con un aumento esperado en las transacciones de compraventa en 2013, especialmente en el mercado de alta gama. Los precios de las propiedades de lujo se han mantenido estables, con demanda continua en áreas exclusivas. El director de Lucas Fox Marbella cree que el mercado está empezando a mejorar.
Social media junction alistair helm bloggingAlistair Helm
The document provides advice for maintaining a compelling blog through using PRAISE principles: praise yourself occasionally to stay motivated, be predictable with your posting schedule, keep content real and relevant to readers, analyze topics at a deeper level, include images to enhance posts, and maintain a single consistent voice and style to engage readers.
El documento describe la organización administrativa del Imperio Inca, incluyendo su uso de un sistema decimal para organizar familias, quipus para contabilidad, y la yupana para cálculos matemáticos. El sistema decimal colocaba jefes sobre grupos de 5, 10, 50, 100, 1000, 5000 y 10000 familias. Los quipus usaban nudos de colores en cuerdas para llevar registros numéricos, mientras que la yupana realizaba sumas, restas y multiplicaciones con granos de maíz.
This document provides an overview and summary of KPMG's 2010 Global Auto Executive Survey. The survey polled 200 auto industry executives from 24 countries between September and November 2009. It gathered perspectives on industry concerns, expectations, and challenges through 2014. Key findings included that overcapacity remains a major issue, innovation and emerging markets will be high priorities, and consolidation in the industry is expected to continue through mergers and acquisitions.
Seven quick wins to lower costs and accelerate revenueGuy Barlow
Oil & Gas Industry
Seven quick wins to lower costs and accelerate revenue
The sharp decline in oil prices from 2014 to early 2015 left oil executives scrambling to control losses as prices fell over 50% in six months. As companies assess their project portfolios and decide which projects to accelerate or cancel, there are seven areas that can help lower costs and accelerate revenue: 1) Analyzing portfolios to prioritize the most profitable projects, 2) Assessing portfolio risk to avoid delays and shutdowns, and 3) Dynamic monitoring and reporting of project data for efficient decision making. After project selection, driving down costs involves 4) Improving collaboration and compliance, 5) Managing changes effectively, 6) Integrating efficient supply chains
This document provides an overview and cautionary statements for DMC's presentation at an industrial conference. It summarizes DMC's business segments, global presence, and financial highlights. The document also cautions readers that DMC's forward-looking statements are based on management's current assessments and involve risks and uncertainties that could cause actual results to differ materially.
The document provides an overview of Dynamic Materials Corporation (DMC) and includes cautionary statements about forward-looking projections. It discusses DMC's three business segments, financial highlights, global operations, and competing cladding technologies. DMC is a leading provider of explosion-welded metal plates and has operations in explosive metalworking, oilfield products, and welding. The document reviews DMC's markets, growth strategy, and historical financial and operational performance.
This investor presentation discusses DMC's financial highlights and global business operations. It provides cautionary statements about forward-looking projections and explains how non-GAAP financial measures are used. DMC has three business segments and a diversified customer base. It is the dominant provider of explosion-welded clad metal plates and has a global network of production and sales facilities.
This presentation provides an overview of DMC and its business for investors. It summarizes DMC's financial highlights including its market capitalization, revenue, earnings, cash flow, and dividend. It also summarizes DMC's executive management team, business segments, global presence, and financial performance by region. The presentation cautions that it contains forward-looking statements and discusses the use of non-GAAP financial measures to evaluate the company's performance.
HCLT Whitepaper: Insurance~ The market will contract not collapseHCL Technologies
The insurance market will surely contract, but it will not collapse. Consumers and companies will still require risk management - albeit, the number of buyers are fewer. Some of the now marginal mid-tier and small carriers may be acquired, or simply fail. Prices will flatten, and rate increases will be needed to raise capital, but the size will be restrained by the contracting economy. However, most insurance industry leaders think that we will be in that contraction through the first half of 2010. With that return to expansion, the industry will still be confronted with the challenges/ opportunities discussed in my last two missives - expanded demand for more sophisticated products and
the need for time-to-market agility while managing losses and expenses.
Property & Casualty Commercial Lines Underwriting: The New PlaybookCognizant
P&C commercial lines carriers are experiencing a global transformation that will compel them to reexamine their operating models, implement direct-to-consumer strategies, reengineer their processes and technologies, and achieve and sustain profitable growth in the age of digital.
The document discusses procedures for developing challenge questions and concepts related to challenges. It focuses on ensuring challenges are aligned with organizational goals and have a clear process for implementing ideas generated from the challenge. It also discusses the importance of being able to transform concepts into real projects, products, or services to determine the program's return on investment.
The document provides an investor presentation for a company in August 2010. It cautions that the presentation contains forward-looking statements regarding the company's financial condition and results of operations that are subject to risks and uncertainties. It then provides an overview of the company's business segments, financial highlights from 2009, management team, global presence, and competitive positioning in its industry. Supplemental slides provide more details on financial performance, balance sheet, sales trends, backlog, capital expenditures, and adjusted EBITDA.
Campbell Nash provides performance management solutions for the chemicals industry. They have over 20 years of experience in the industry and focus on projects that create value through industry knowledge, consultancy skills, and technical experience. Their typical projects are designed to demonstrate returns within 100 days and address success criteria like reducing risk, increasing visibility, monitoring financial contribution, and formalizing processes. They have completed over 200 such projects for chemicals companies.
Asset Management: Reinventing Reporting for the New Era of Transparency and C...Cognizant
Asset managers can leverage cloud computing and as-a-service models to modernize their reporting, thus meeting the information demands of clients, regulators and decision makers, while reducing capital investments.
This document provides a summary of the impact of the 2008 recession on the global outsourcing industry and introduces the GS100 study.
1) The recession changed rules for global sourcing as clients focused on cost cutting and vendors had to adapt by delivering business outcomes at lower costs.
2) While the industry hit a low point in the first half of 2009, it showed impressive growth in the last quarter of 2009 as clients consolidated vendors and engaged more specialized providers through multisourcing.
3) The GS100 study recognizes 100 leading service providers that demonstrated resilience during the recession and have the maturity to deliver high standard IT and BPO services using the global delivery model.
Only 40 % of turnarounds are successful. And in stressful times like these, the odds are even smaller. A company in declining financial health needs to steer clear of common pitfalls and take necessary action without compromising their long-term strategy.
In this webinar, you will learn some tools and frameworks for identifying, planning and implementing a successful turnaround. We will present insights, learnings and cases from the construction equipment industry and the financial crisis of 2008-2009, together with an outlook on the accelerated change that we are seeing in today’s crisis.
While security servicing providers have performed well in recent years, they face anemic core growth, shifting client expectations, rising pressure on fees, and the potential for disruption. The COVID-19 pandemic and associated recession will put further pressure on the industry. In response, they must be bold in their planning and approach to service delivery.
The document discusses cautionary statements regarding forward-looking information and the use of non-GAAP financial measures in company presentations and analyses. It notes that forward-looking statements may differ materially from actual results due to various risk factors, and that non-GAAP measures are presented as a supplement to GAAP measures. Management uses non-GAAP measures like EBITDA to evaluate operational performance and generate cash flow, though they are not a substitute for GAAP.
The outlook for the global outsourcing market in 2010 is one of slow recovery following the impacts of the recession in 2009:
1) Q1 2010 saw a 25% increase in contract value year-over-year, driven largely by renewals and restructurings of existing contracts.
2) Cost reduction remains a key priority for clients, benefiting Indian service providers competing on price.
3) BPO demand is shifting to smaller, shorter-term specialized projects replacing large transformational deals.
4) The European market, particularly in the UK, faces economic uncertainty that may dampen overall industry growth.
5) Cloud computing and industry-specific BPO solutions show strong adoption signals
This document discusses forward-looking statements and non-GAAP financial measures. It warns that forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially. It also states that non-GAAP financial measures should not be considered substitutes for GAAP measures and provides reconciliations. The document introduces Kevin Longe, who will become CEO, and outlines objectives of leveraging strengths for growth, expanding product offerings, enhancing operational framework, and pursuing acquisitions.
Similar to Understanding the-health-of-your-supplier (20)
The document discusses the potential impacts of a proposed new revenue recognition standard on the automotive industry. The proposed standard would require a significant change in approach, moving to a single, contract-based model where revenue is recognized when performance obligations are satisfied, representing a transfer of control of goods or services. This would impact areas like IT systems, financial metrics, and legal contracts. Companies would need to fundamentally change their revenue processes under the new standard.
The document discusses how auto lenders should adapt their underwriting processes to evaluate non-prime borrowers effectively as more borrowers enter the non-prime segment due to economic hardship. It recommends that lenders supplement traditional credit scoring with subjective analysis, such as applicant interviews, to obtain additional contextual information and identify creditworthy non-prime applicants. Conducting interviews allows lenders to clarify inconsistencies in credit reports, understand the causes of credit blemishes, and assess an applicant's willingness and ability to repay a loan. Integrating subjective analysis into underwriting can help lenders navigate the complexities of evaluating non-prime borrowers and capture this growing market segment in a responsible way.
This study analyzes the potential impact of electric vehicles making up 20% of passenger cars, light duty vehicles, and two-wheeled vehicles in Austria by 2020 and 2030. Key findings include:
1) 1 million electric vehicles would increase power consumption by 3% without requiring new power plants.
2) The energy grid has sufficient capacity for electric vehicle charging. Some distribution network adaptations may be needed.
3) 16,200 charging points would be required nationwide, or 2,800 in cities. Investments of €111-650 million would be needed.
4) Electric vehicles could reduce car emissions to 40 g/km, a two-thirds reduction, and lower Austria's carbon footprint
The document discusses trends in the global automotive industry. It highlights how the industry is undergoing changes in business models and value chains due to pressures to be more flexible, mobile, and environmentally friendly. It explores topics like alternative fleet management strategies, the recovery of the US automotive industry, the role of branding through Formula 1, and the future of China's auto market. The magazine aims to transparently inform readers about current trends in the automotive sector through these articles analyzing various aspects of the industry.
This document analyzes the market attractiveness of the auto component industry in India. It begins with an executive summary that outlines the size and growth forecasts of the OEM and replacement markets in India. It then discusses the government's foreign investment policies in the auto component sector and identifies attractive sub-segments for potential entry strategies. The rest of the document provides an in-depth analysis of trends in the global and Indian auto component industries, including market size estimates, production and export figures, major players, and growth forecasts through 2025. It also examines the OEM and replacement markets in India and how components are sourced.
The document summarizes the ASEAN automotive market, focusing on Thailand, Malaysia, and Indonesia. It states that combined auto sales in ASEAN's six main markets declined 10.2% in 2009 but some economies increased, and sales are expected to exceed 2 million units in 2010. Thailand has become a major regional production and export hub for vehicles, particularly pickup trucks. The auto industry is a key part of Thailand's economy, and production and exports are expected to increase in 2010 despite declines in 2009.
Electric vehicles represent an opportunity to increase vehicle efficiencies and reduce dependence on fossil fuels. However, battery systems significantly increase vehicle costs, and building supporting charging infrastructure will require major investment. In the short to mid term, electric vehicles are expected to have a minimal volume impact, comprising less than 1% of global vehicle production by 2015. Continued technology advances, government support, and consumer acceptance will influence whether electric vehicles achieve significant market penetration.
20100201 multi channel sales approach for premium autosrollerballrohit8
This document discusses a multi-channel sales approach for premium automakers to more effectively market and sell vehicles. It identifies 12 existing sales channels such as sponsoring, factory sales, dealerships, and online websites. The document evaluates how these channels are currently sub-optimally integrated and presents four scenarios for how automakers could allocate activities between themselves and dealers to better address customer needs across segments. Adopting a multi-channel approach could help automakers raise cost effectiveness and gain competitive advantages.
1) Many suppliers restructured operations and adjusted working capital levels in response to reduced demand during the recession.
2) As demand starts to improve, suppliers may have challenges increasing production due to capacity constraints and liquidity pressures from needing to finance purchases in advance.
3) Benchmarking working capital requirements across industry segments can help suppliers, automakers, and investors understand liquidity trends and risks to supply chains or potential investments. Those suppliers that maintain solid liquidity may gain competitive advantages as markets recover.
This document summarizes the key findings of KPMG's 2009 Global Auto Executive Survey. The survey found that automotive executives have significantly lowered their expectations since last year due to the unprecedented global economic crisis. They now expect lower revenues, profits, more bankruptcies, and a long period of restructuring. Additionally, growth expectations for China and India over the next five years were much lower than previously anticipated. However, the survey also found that companies remain focused on innovation, especially in fuel technologies, to help rebuild sales and cut costs during the recovery. Market share expectations continue to shift towards emerging Asian and Japanese/Korean brands.
The survey found that growth expectations have shifted away from mature economies toward emerging markets. Most companies expect emerging economies like Asia, Eastern Europe, and Russia to contribute significantly to auto industry growth over the next five years. In contrast, more companies forecast declines in revenues for North America and Japan than improvements. Expectations for Western Europe were evenly split between declines and stability.
The document discusses corporate value derived from new markets. It focuses on challenges large manufacturing companies face when operating in new markets like Brazil, Russia, India and China. Key concerns are cost, quality, and managing through joint ventures. While low-cost sourcing is attractive, quality issues are a prominent worry, especially for manufacturing in China. Growth strategies center on gaining new customers and sales in existing markets rather than entering entirely new countries.
1. September 2010
Understanding the
health of your supplier: Is your company fuelled
with working capital?
At a glance
With demand hard-hit by the Suppliers looking to increase Suppliers, OEMs, and investors
recent recession, many suppliers production in response to should consider benchmarking
restructured their operations and improving market conditions may analysis of working capital
adjusted trade working capital to have capacity challenges and requirements and developing
reduced demand levels. pressure on liquidity. strategies to better understand
future liquidity prospects.
pwc
2. Understanding the health of your supplier network: Is your
company fuelled with working capital?
Introduction: cash patterns. These variations
can have major impact on a risk
With demand hard-hit by the assessment since the evaluation
recent recession, many suppliers of currently available liquidity and
restructured their operations and future cash requirements may
adjusted trade working capital differ significantly depending
to reduced demand levels. As a on the business model of the
result, suppliers now looking to analysed supplier.
increase production in response to
improving market conditions may In this article, we look at the impact
have capacity challenges and will of the recent market developments
often need to finance in advance on working capital requirements
significant shares of their purchases, and highlight some of the different
putting pressure on liquidity. Thus, trends observed across segments.
OEMs and suppliers need to We also describe the advantages of
understand and respond to the using benchmarking analysis when
resulting risks for their supply chains considering liquidity patterns and
or investments. working capital requirements. Thus,
Those suppliers that survive the initial phase of an improved market with a solid
liquidity cushion could have the financial flexibility to benefit from the recovery
afterwards and the opportunity to gain a considerable competitive advantage.
While traditionally risk management identifying and including companies
has focused attention primarily on of the relevant segment within
major suppliers, small and mid- the benchmarking base is critical
sized suppliers can also represent to understanding and assessing
a key element in the supply chain. the overall risk levels of a specific
These small and mid-sized suppliers company. Finally, we provide some
may have more limited financing strategies for suppliers, OEMs,
resources and other levels of and investors looking to better
working capital provision than understand the future liquidity
larger players, and correspondingly prospects of their companies and
higher risk profiles. Our working competitors, supplier base, or
capital analysis shows that different potential investment targets.
segments of suppliers have different
2 PricewaterhouseCoopers
3. The economic crisis: Full speed to hard brake
The global recession had a massive The US market was the first to
impact on the automotive industry. be hit by the economic crisis
In Germany alone, more than in 2007, although the downturn
100 suppliers filed for insolvency. quickly spread to European and
Across the Atlantic, two of the Asian markets during the course
so-called Detroit 3 OEMs, General of 2008. Consequently, European
Motors and Chrysler, went through suppliers with a major share of their
bankruptcy that impacted many of business coming from the US
their suppliers. market generally experienced a
greater decline in EBIT in 2008 than
The impact of the crisis on the did those with a strong focus on
P&L was dramatic. Operational the European Market. Our analysis
profitability of European suppliers shows that small and medium sized
fell by more than 70% between companies experienced the smallest
2007 and 2009, from 5.3% to 1.4%, impact on margins, possibly as
representing the steepest decline they tend to have a smaller global
in the past five years (Figure 1). footprint.
Revenue growth came to a virtual
halt in 2008, with an increase of just
1.5%, and collapsed in 2009, as Figure 1:
revenues declined 21.9%. EBIT margin and revenue growth rate
Median, in %
While the downturn had a negative
impact on all segments of the
15%
industry, some suppliers were
less able to weather the crisis 8.5%
10%
7.5%
than were their industry peers. 5.8% 3.7%
Service providers in particular, 5% 1.4%
4.8% 4.4% 5.3%
such as engineering companies,
0%
experienced a decline in profitability
1.5%
of almost 6% from 3.7% to -1.9% -5%
in 2009 (Figure 2). When the
crisis began, OEMs and tier-1 -10%
suppliers limited their outsourcing
of development projects and -15%
contracting third parties. As a result,
-20%
order books of service providers -21.9%
dried up after the completion of -25%
ongoing projects in 2009. 2005 2006 2007 2008 2009*
EBIT margin
Revenue growth rate
Source: PwC SupplierFacts
*2009 based on set of 61 selected suppliers
PricewaterhouseCoopers 3
4. Sidebar heading 1 out of fuel?
Scarce liquidity: Running
In order to preserve liquidity, While the need to free up cash may
many companies looked to have been paramount for some,
reduce investments and began cutting R&D can be a risky strategy.
reassessing projects in research and Demand trends are shifting and
development (R&D). This strategy technology is changing rapidly,
was only able to offer limited so suppliers that cut back too
potential savings, as projects in significantly on programs which
progress were usually finished to drive innovation risk losing their
minimise sunk costs. As a means competitiveness. Further, new
to increase liquidity, this strategy regulations are creating increased
is generally more effective over the technical demands on the industry.
mid rather the short-term. Given the Suppliers and car manufacturers
precipitous drop in demand and the may need to return to a higher
difficulties inherent in cutting on- level of investment in the medium
going projects, it is not surprising term to keep up with changing
to see an increase in the relation of demands impacted by regulation
CAPEX to revenues in 2008. In 2009, and competition.
as more programs drew to a close,
the level of investments bottomed
out, with CAPEX averaging a mere
4.1% of revenues.
Figure 2: Figure 3:
EBIT—Margin by sub segment EBIT—Margin by size
Median, in % of revenue Median, in % of revenue
8% 8%
6% 6.9%
6%
5.8%
5.7%
5.7%
5.4%
4% 5.6%
4.8%
4.5%
1.2%
0.6%
1.2%
1.8%
1.6%
0.8%
4.2%
3.8%
3.7%
4%
3.6%
4.5%
3.5%
3.4%
2% 4.0%
2.3%
2.2%
3.5% 3.4%
2% 2.8%
0%
-2.1%
1.3% 0.1%
-2% 0%
-4%
-2%
-6%
-8% -4%
Exterior Chassis/ Powertrain Interior Electrical/ Service Raw <1,000 1,000–5,000 >5,000
Underbody Electronic Provider Materials
2007 Revenue in Mio. €
2007
2008
2008
2009
2009
YoY Change 2008/09
YoY Change
Source: PwC SupplierFacts
Source: PwC SupplierFacts *2009 based on set of 60 suppliers
4 PricewaterhouseCoopers
5. Figure 4: Figure 5:
CAPEX Working capital to sales
Median, in % of revenue Median, in % of revenue
7% 18%
6% 16%
6.0%
5.5% 5.6%
5% 5.1% 14%
4% 4.1% 12%
3%
10%
2%
8%
1%
6%
0%
2004 2005 2006 2007 2008 2009*
2005 2006 2007 2008 2009*
Source: PwC SupplierFacts 500 >5,000
*2009 based on set of 60 selected suppliers 500–1,000 Median
1,000–5,000
Source: PwC SupplierFacts
*2009 based on set of 30 selected suppliers
Many companies viewed working Furthermore, the first signs of
capital as another feasible source recovery at the end of 2009 resulted
of liquidity. Facing zero or negative in a restocking. This is reflected
growth, working capital was quickly in the year end values of working
adjusted to the new levels of capital of the analysed suppliers.
demand, and unrealised reserves to
cover operational liquidity demand A characteristic of the economic
were released. crisis was the limited access to
external financing via established
As a result, net working capital sources such as banks and capital
was reduced to a level below the markets or equity investors due to
average in periods of economic the high degree of uncertainty and
growth and stability. Working capital disrupted global capital flows. Small
to sales was reduced from 13.4% suppliers in particular tend to have
in 2006 to 10.7% in 2008. This drop limited access to capital markets
is effectively a 20% decline and and often had to rely on internal
represents 2.7% of revenue. The sources of financing. Our analysis
impact cannot be overstated—the shows that the group of suppliers
liquidity achieved from working with less than m€ 500 revenue
capital reduction equals 45% of were able to reduce working capital
the capital expenditure in 2008 or between 2007 and 2008 more than
30% of the average EBITDA of the their larger competitors; however,
European supplier industry. In 2009 with a ratio of 12.7%, the working
suppliers continued to draw upon capital of this group of suppliers is
working capital as a key source still above the average. In 2009 the
of liquidity, however, due to the suppliers had to restock partially,
speed of the revenue decline the but nevertheless working capital
levels of working capital could remained below pre-crisis levels.
not be adjusted simultaneously.
PricewaterhouseCoopers 5
6. First signs of an upswing
Some signs of hope for an many industry observers expect
improving economic outlook and a decreasing sales volumes as such
recovery in automotive demand can initiatives come to an end in most
be seen: in the emerging markets of countries.
India and China, demand showed
a strong jump in August 2010;
demand in India was up +34%
Markets in Eastern Europe and Russia are still behind the registration levels seen
before the crisis.
in August and in China demand Recovery would certainly be
increased +37% YoY in August. preferable to further stagnation
In May 2010 Moody’s Investors or decline; however, increasing
Service upgraded the outlook for demand also implies certain near-
the global automotive industry to term risks. Following a period of
positive, and mature markets such low or negative earnings and limited
as the US posted more stable sales access to financing, due to the
than expected in the first quarter of restrictive lending policies of banks,
2010. However other major markets suppliers and car manufacturers
remain unpredictable. In Western may have tapped every remaining
Europe, demand for passenger source of liquidity. Many suppliers
vehicles was propped up by may need to reassess their working
scrappage schemes in 2009 and capital policies to ensure that these
are able to respond to market trends.
6 PricewaterhouseCoopers
7. Acceleration needs fuel
Optimisation of working capital is with suppliers were maxed out or
generally considered essential for renegotiated. Occasionally, car
a lean and efficient management manufacturers agreed to settle
of companies. Improving capital trade liabilities earlier to support
efficiency and thus capital charges their supply base. For example, a
remain one of the main issues for German OEM decided to pay its
operational management. But what suppliers earlier at the end of 2009,
does the observed reduction of eliminating a major share of trade
working capital mean? And what receivables—and thus working
are the implications for supplier and capital—of the OEM’s suppliers.
manufacturers as well as banks
and investors? Such measures only offer a
stop-gap solution. If demand for
In the wake of the recent economic passenger cars and commercial
crisis, even small companies are vehicles normalises, levels of
actively addressing these questions working capital is expected to revert
and working capital management in the direction of the levels seen
has become a focal point of before the crisis.
While in general the recent reduction in working capital levels is positive,
companies may want to ensure that they watch their liquidity closely and to remain
financially flexible to cover increased liquidity demands when growth returns.
interest for nearly every enterprise. This could have a double impact on
This renewed attention has led to the liquidity of suppliers. Suppliers
the uncovering of hidden reserves may experience an immediate
and the optimisation of processes cash outflow due to the additional
and stocks. In the long run this working capital requirements of their
could result in a leaner organisation, current level of revenues. Further,
less capital requirements and an increase in demand could result
additional value for shareholders. in the need to allocate additional
capital to working capital reserves
Indeed, the current levels of working in order to finance the additional
capital at suppliers are not likely revenue growth.
to be sustainable. In the search
for liquidity, terms of payment
PricewaterhouseCoopers 7
8. Assuming that automotive suppliers return to a
normalised level of working capital to revenue
from 11.7% at the end of 2009 to the average
of about 13.2% for the European supplier
industry, working capital could need to grow by
approximately 28.1% in 2010 compared to 2009.
Many of the key forecasting established than those of their larger
parameters remain difficult to counterparts. Thus, they may be
predict, so projections for 2010 still more sensitive to growing demand.
reflect some uncertainty. In this light,
the PwC Autofacts Group expects Despite growing revenues,
global assembly to be 68.7 million profitability may remain low. Pre-
vehicles in 2010. crisis production levels are not
expected to be realized for some
Smaller sized suppliers may time, while global assembly
experience even greater challenges. overcapacity could remain at a high
In general they have less negotiating level, particularly in Europe, putting
power and are less likely to be pressure on car manufacturers to
able to dictate conditions to other demand further price cuts from
suppliers and car manufacturers. their suppliers. While investors and
Smaller suppliers also showed banks are likely to remain reluctant
the highest net working capital to finance automotive suppliers, and
reduction in comparison to larger only medium to large sized suppliers
suppliers, and they may experience may have direct access to capital
a strong rebound effect. And while markets, the quest for liquidity will
we have seen impressive success remain on the agenda of automotive
in 2008 and 2009 regarding the suppliers. Indeed, for many it may
reduction of working capital, the gain in importance and in some
working capital management cases additional suppliers may
processes at small sized suppliers face illiquidity.
are still less robust and well
8 PricewaterhouseCoopers
9. Benchmarking as integral part of financial forecasting
Many companies are aware of be grouped and benchmarked to
the patterns of working capital reveal the liquidity pattern of the
requirements when demand specific sub segment. To assess
returns after a downturn, however, the risk of a specific supplier it is
they may not have implemented helpfull to map the relative position
sufficient tools to monitor and and performance of the company,
control the respective risks. Risks as well as its current and future
and countermeasures often vary liquidity requirements.
depending on a company’s position
within the value chain. The benchmark for such evaluation
of a supplier can be derived from a
Our analysis shows that working comparable peer group to provide
capital based liquidity patterns may realistic targets. For example,
vary significantly depending on the engineering service providers that
size of the company. But size is have a high share of revenues from
not the only determiner of liquidity products that are compensated on
requirements. Other factors that a per part base, when the specific
determine the supplier’s business part is used in production of a
model such as strategy, global supplier or OEM, generally have
footprint and product and service higher working capital requirements
portfolio are equally critical. It is than those engineering service
obvious that each supplier could providers that focus on pre-
react individually on growing production development such as
demand; however, certain suppliers prototyping. Thus, comparing the
with a similar business profile can current or future cash requirements
Figure 6:
Implementing benchmarking in a risk management system
Combine
Define and benchmarking
Gather resilient
Define peer group calculate data with
database
relevant KPIs forecasting
model
• Direct competitors • Standardised • Define KPI relevant • Historic liquidity
or companies with structure of for specific segment patterns of sub
a similar risk profile collected data • Configure threshold segment combined
• Experts judgment • Audited data values for KPIs and with market
of comparability preferred sub segments forecasts
of peers advisable • Corporate level, • Suppliers, OEMs
• Analyse historical where data is and investors/
development of collected, should banks need to set
peers to verify be comparable up process based
comparability on individual
requirements
PricewaterhouseCoopers 9
10. of an engineering service provider different products instead of direct available—individual accounts
focused on the development of competitors as part of the peer for companies with no major
production parts with the working group. subsidiaries.
capital targets of prototyping
focused service providers could To ensure a robust analysis, the Subsequently, meaningful key
result in an underestimation of future historic performance of identified performance indicators (KPI) have
liquidity needs. peer companies should also be to be defined. They may differ for
It is therefore essential to adjust the parameters and threshold values of a risk
monitoring tool to peer group specific levels to assure a high level of reliability of
the monitoring system.
The first step in implementing compared to the performance of the specific segments and should
a benchmarking analysis as the focus company. This allows a be chosen individually to measure
part of the risk management comprehensive peer group with a the relevant value drivers of the
and forecasting system is the representative business and risk business. Using the collected data,
appropriate definition of a profile to be identified. the historical values of the KPIs can
representative peer group. Direct be calculated and segment specific
Afterwards, resilient data of the peer patterns identified.
competitors would seem to be
group needs to be gathered in order
the perfect fit, since they bear a
to analyse performance. During this Finally, the identified patterns should
comparable risk implied in the
process particular attention should be combined with forecasting data
business model. However, “pure
be paid to the following factors: to assess the risk of predicted
play” suppliers of a single product or
product segment are the exception. market developments. While historic
• Data should be gathered in a results will not be a guarantee
If the targeted peer companies standardised structure to provide
offer a similar product, however, it for future trends, the identified
a comparable database; patterns qualify as a suitable early
represents only part of revenues
for some of these companies and • Audited financial statements indicator. Forecasts should focus
the risk profile will differ. The same should be used. Major differences on both the future development of
principle holds true for other factors in accounting standards should the automotive market in general
such as size or primary customers. be eliminated or considered when and the specific market of the focus
In some cases it might be more data is analysed; company. External automotive
appropriate to use companies industry production forecasts,
with similar business models but • Data should be collected on in combination with macro and
a consolidated level or—if not micro economic indicators, are a
10 PricewaterhouseCoopers
11. good foundation for a forecasting • Continuously optimise and reduce • Continuously benchmark data
system. Based on this data a working capital requirements; with respective peer group to
market model can be derived for monitor relative performance;
the relevant segment. Combining • Implement an integrated cash
the projected market developments flow forecasting methodology • Simulate liquidity risks based on
with the selected, identified cash based on market projections, forecasted market development
flow patterns (e.g., working capital including working capital and sub-segment industry
patterns) will render possible the requirements; patterns.
calculation of how KPIs of the focus
• Consider results of integrated Investors face the risk of mispricing
company are likely to be impacted
forecasting in the development a potential investment in the
by market developments.
of financing strategy and your pre-deal phase. Once they have
The process of implementation communication with external invested, they may end up losing
of an efficient and reliable risk creditors. the investment or needing to inject
management system using historical capital into a troubled investment
OEMs also face supply chain risk. due to a misinterpretation of
data as well as forecasting data
While most OEMs monitor the future capital requirements. These
needs to be tailored to the individual
bigger suppliers, small and medium concerns also apply to banks and
needs of the addressee. Installing
sized suppliers, as well as tier-2 other creditors. The following steps
a benchmarking functionality in
suppliers, can remain below the could help to reduce such risks:
your risk management system
radar. Nevertheless, a default by
may contribute significantly to the
a specialist supplier may cause • Compare historical capital
quality of the results. Suppliers,
major disruption in the supply or development with peer group
OEMs and investors should monitor
production process or even halt to assess performance of
the financial health of the supplier
production. The following steps can the company;
industry, but they face somewhat
help to reduce the risk for the OEM
different issues, and will need to • Reflect future business plan with
and increase transparency:
refine their models accordingly. historical benchmarking data to
• Get access to selected, validate plausibility;
Suppliers face the risk of limited
standardised financial data of
access to working capital financing • Simulate cash requirements
own suppliers as well as selected,
in times of growing demand. based on industry patterns
critical tier-2 suppliers (best in
Possible countermeasures include and assumptions regarding
class processes may require
the following: market development;
critical tier -2 suppliers and those
• Analyse and understand working who supply time-critical parts or
• Derive impact of cash
capital requirements through components to self-provide this
requirements on return on
industry cycles; information on a regular basis);
investment and debt service.
• Monitor working capital • Categorise suppliers to pre-
on a timely basis as one defined sub segment with
of the key KPIs for top individual industry pattern (e.g.,
management reporting; electronic supplier, engineering
service provider, etc.);
PricewaterhouseCoopers 11
12. Gentlemen, keep your engines running
While the worst of the economic understanding the numbers may
crisis may be behind us, major risks not be enough, though. Automotive
for all participants in the automotive players also should consider having
value chain lie ahead, even if access to sound forecasting that
demand recovers. For this reason, helps anticipate changes in demand.
suppliers, OEMs, investors and Combining financial benchmarking
creditors should consider further with an integrated forecasting
focus on liquidity issues. They methodology can provide a sound
could benefit from understanding analytical basis for decision making.
the industry patterns for each
relevant sub segment, including Those players that survive the crisis
capital requirements driven both and the initial phase of an upswing
by working capital and by future with a solid liquidity cushion may
CAPEX needs, which may have to have the financial flexibility to
increase to pre-crisis levels in order benefit from the recovery afterwards
to keep up with the technological and the opportunity to gain a
progress of the industry. Simply considerable competitive advantage.
12 PricewaterhouseCoopers
13. More about the SupplierFacts Benchmarking Tool
We analysed the influence of the crisis with our SupplierFacts Benchmarking
Tool to understand the implications on the financial performance of suppliers
and to identify major risks for suppliers, car manufacturers and investors, as
well as external creditors. We drew upon the annual reports of almost 200
European automotive suppliers for the period 2004-2008 to create a historical
dataset. For 2009 we analysed a set of 60 automotive suppliers with a global
footprint.
To have a deeper conversation about any of the issues in
this paper, please contact:
Authors
Jan Ebert
jan.ebert@de.pwc.com
Phone: +49 511 5357-5858
Dr. Michael Borgmann
michael.borgmann@de.pwc.com
Phone: +49 511 5357-5851