Interim Managers & Supply Chain Savings


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How Interim Managers can save you money in the Supply Chain

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Interim Managers & Supply Chain Savings

  2. 2. Terry Abra   Chartered Member CILT Member 20 years Past Committee Member East Midlands Recruitment Consultant for over 5 years - JLC Solutions Working with major blue chip companies to small private companies, recruiting FLM to Operations Directors Mail order, publishing, 3PL, fmcg and manufacturing. Distribution Manager Interim Distribution Manager – in house & 3PL Operations Director Contract Manager 3PL Management Services Self employed Consultant Totectors; TNT Logistics; Empire Stores; Grattan; Prices Candles; Swedish Match; NYK; New Covent Garden Driver Hire Franchise
  3. 3. WHAT ARE THE PROBLEMS FACING SUPPLY CHAIN Exacerbated by current recession Poor demand High costs Poor management Inefficiencies highlighted Suppliers ceased trading Customers ceased trading Cash flow Poor customer service Procedures no longer robust Poor inventory management Quality – Mattel, car recalls Not lean etc   All of these carry costs, many of which will be hidden and not tangible
  4. 4. WHAT CAN AN INTERIM DO FOR YOU Costs Many employers might baulk at spending £200,000 on an interim manager for 15 months. But if it resulted in cost savings of £23.7 million, then the investment starts to look like a wise one. This is what happened at one FTSE-100 company after it employed an interim finance director. While not every interim can deliver such impressive savings, the right one can add real value to a business. This was the opening paragraph of an article published by People Management magazine WHAT IS AN INTERIM Hands on short term manager Business problem solver One off Project Manager Consultant
  5. 5. WHAT CAN AN INTERIM DO FOR YOU Costs <ul><li>Research by Impact Executives </li></ul><ul><li>Many companies assume an interim manager is more expensive than </li></ul><ul><li>a permanent manager. </li></ul><ul><li>BUT - there are no extra payroll costs such as National Insurance or health </li></ul><ul><li>schemes, no car benefits, holiday pay or pension plans. </li></ul><ul><li>  </li></ul><ul><li>Executive packages will cost the company an additional 20 per cent on the </li></ul><ul><li>annual payroll </li></ul><ul><li>  </li></ul><ul><li>Many companies ignore the real financial impact of recruitment, in terms </li></ul><ul><li>of time and money as well as other expenses such as training and holidays </li></ul><ul><li>  Recruitment is a most important activity in any business but often not very </li></ul><ul><li>well done, even though everybody would agree that bringing the right calibre </li></ul><ul><li>people into a team is fundamental to the successful running of a business. </li></ul><ul><li>  Most company managers find recruitment an unrewarding task. </li></ul><ul><li>Time-consuming, often tedious and can be difficult to get right.   </li></ul><ul><li>Hiring the wrong people is costly </li></ul><ul><li>SME invest £300m annually and 22% (55000) leave within 6 months (Jobsite) </li></ul><ul><li>A verage hidden cost of recruiting a new employee is £5k ( Secretarial)  </li></ul><ul><li>Interims are paid solely for their time and achievements and if they don’t </li></ul><ul><li>perform, they can be dehired without cost, fuss or ceremony </li></ul><ul><li>  </li></ul>
  6. 6. WHAT CAN AN INTERIM DO FOR YOU Costs <ul><li>Although companies are cutting back on </li></ul><ul><li>permanent recruitment, some are still hiring but </li></ul><ul><li>opting for more cost-effective recruitment options </li></ul><ul><li>Flexible & cost effective, particularly if there </li></ul><ul><li>is no budget for permanent hires </li></ul><ul><li>On the Nominal Ledger and not on the payroll – </li></ul><ul><li>Sensitive after redundancies etc </li></ul><ul><li>Cost-effective way to plug resource or skill gaps with </li></ul><ul><li>expertise where and when it is needed - special projects, </li></ul><ul><li>maternity leave, long-term sick leave or sabbatical </li></ul>
  7. 7. WHAT CAN AN INTERIM DO FOR YOU Costs Case Study 1 Local House builder had an on-going project (9 months) with costs to date of £700k Employed Interim ex FD of National House builder <ul><li>Existing Management could not (or would not) see the </li></ul><ul><li>wood for the trees </li></ul><ul><li>Project was badly managed </li></ul><ul><li>Complacent </li></ul><ul><li>Protecting their jobs – redundancy at the end of the project </li></ul><ul><li>“ We’ve always done it this way” </li></ul><ul><li>Managing Director was not challenged </li></ul><ul><li>Too late to make savings but new procedures and disciplines have been introduced to prevent it happening again </li></ul>He asked the basic questions Why, What, When, How, Where and Who? Identified a two month overrun and excess costs of £200k
  8. 8. WHAT CAN AN INTERIM DO FOR YOU Added Value Skills & Experience Bring wider range of skills and experience Overqualified for the work Focused on delivering solutions Provide extra help with projects involving significant change management   P rovide enthusiasm and energy and a focus on deadlines, especially welcome on difficult or “unpopular” projects Just because a former staff member may know the organisation, they may not have the skills for the job  
  9. 9. <ul><li>Case Study 2 </li></ul><ul><li>P ackaging supplier failed to deliver the correct promotional </li></ul><ul><li>packaging to meet manufacturing schedule of a Food Processor </li></ul><ul><li>Production lines idle for four shifts </li></ul><ul><li>Customer was supplied five days late </li></ul><ul><li>Supply Chain Manager and the Supplier were jointly </li></ul><ul><li>responsible but were taking no corrective action </li></ul><ul><li>Interim intervened and raised a successful claim against </li></ul><ul><li>the supplier for lost sales and £250K compensation </li></ul><ul><li>Case Study 3 </li></ul><ul><li>Supplier consistently delivered OOS (Out of Specification) </li></ul><ul><li>fresh fruit concentrate </li></ul><ul><li>Product variability resulted in increased wastage and </li></ul><ul><li>reduced line efficiencies </li></ul><ul><li>Materials Manager and Supplier were not taking any </li></ul><ul><li>responsibility or action </li></ul><ul><li>Interim collated the data relating to the OOS fresh fruit </li></ul><ul><li>concentrate and pressed a claim against the supplier </li></ul><ul><li>Got £50K equivalent product for future use within the contract </li></ul>WHAT CAN AN INTERIM DO FOR YOU Costs Always look at the added value an Interim can bring
  10. 10. WHAT CAN AN INTERIM DO FOR YOU Speed <ul><li>Ability to come in at short notice and immediately take </li></ul><ul><li>responsibility </li></ul><ul><li>Available to start quickly, with minimum of recruitment or </li></ul><ul><li>termination formalities and associated costs </li></ul><ul><li>Permanent manager cannot be found fast enough </li></ul><ul><li>Ability to trial a new role without the need to commit to a </li></ul><ul><li>long-term position </li></ul><ul><li>Rapid injection of experience from other environments </li></ul><ul><li>Project management expertise – the ability to hit the </li></ul><ul><li>ground running </li></ul>
  11. 11. WHAT CAN AN INTERIM DO FOR YOU Objectivity <ul><li>- L ack of internal baggage </li></ul><ul><li>Not drawn into office politics, personalities or protocols </li></ul><ul><li>but sensitive to the company ethos </li></ul><ul><li>- Will manage change and resolve a difficult situation </li></ul><ul><li>Detached from the organisation, provide expertise and </li></ul><ul><li>objectivity which those at ‘the coal face’ often can’t </li></ul>Legislation How robust is your Health & Safety Policy?   Many organisations may not be aware of their duty of care obligations and legal requirements and the implications of non conformance <ul><li>The Health and Safety at Work etc Act 1974 (HASAW or HSW) </li></ul><ul><li>The Health and Safety Offences Act 2008    </li></ul><ul><li>Corporate Manslaughter and Corporate Homicide Act 2007 </li></ul>In 2007/8, there were nearly 1400 prosecutions brought by HSE and local authorities 1173 led to convictions and the average conviction penalty was £12,900
  12. 12. WHAT CAN AN INTERIM DO FOR YOU Legislation Health & Safety   The key to avoiding prosecution or hefty fines is simply to follow relevant health and safety legislation and good practice guidance   Ideally, companies will employ a full time Health & Safety Manager- NEBOSH qualified, member of IOSH who can take the company successfully to OHSAS 18001 certification <ul><li>review all risk assessments </li></ul><ul><li>ensure all staff are trained and competent in H & S matters </li></ul><ul><li>ensure the general policy statements are up to date </li></ul><ul><li>ensure control measures are in place </li></ul><ul><li>complete audits or assessments </li></ul><ul><li>ensure legal compliance </li></ul>May not be necessary or financially viable to have a full time H & S Professional Employ qualified Interim Health & Safety practicioners
  13. 13. HOW TO FIND AN INTERIM Ex employees Ex competitor employee Networking Linked In Recruitment Agency Specialist Interim Agency JLC Solutions Skillbase of Interims COMING OUT OF THE RECESSION Cannot make predictions but believe there will be new opportunities emerging out of the recession Projects still need to continue The companies who survive and can reduce costs will come through stronger Darwinism – only the fittest will survive
  14. 14. INTERIM MANAGERS AND SUPPLY CHAIN SAVINGS Summary Often hidden but there are inevitable costs associated with waste, inefficiency, poor procedures , inadequate inventory control, poor customer service and poor management etc Difficult to always itemise specific cost savings by using Interims but I hope I have demonstrated that by utilising a good, experienced Interim, many cost saving and added benefits can be achieved
  15. 15. 3 Symington Way Market Harborough LE16 7XA 0845 474 1732 [email_address]