The Diagnostic Phase
- Stock Audit– for reality check. The Zoning tool, physical vis-à-vis accounting reconciliation. The real DP vis-à-vis Bank outstanding – can be outsourced, if needed
- Account Receivable and Account Payable Audits – for reality check. Impact on DP.
- Secretarial & Documentation Audit for Statutory Dues, Regulatory Compliances, Documentation status– can be outsourced, if needed
- Forensic Audit in exceptional cases with multiple layer transaction tracking – can be outsourced, if needed.
- Review of Credit Audit, Inspection Audit Reports, Consortium Minutes’ Review.
- Review of Annual and Quarterly Financial Statements, Scrutiny of CC and Current Accounts, FFR/MSOD Reviews, Cash flows Review -fortnight/month/quarter. Tracing and tracking systemic leakages, if any.
- Review of credit facilities including non-funded facilities. Gauging the real debt servicing ability.
- Contracts Review-Purchase and Sales including payment terms and contract terms.
- Operational Review-MM, Strategic Sourcing, Yield Improvement, Stores & Consummable, Power cost, Manpower Nos. & productivity, Internal and External Rejections, Quality Standards, etc.
Step 2-Curative Phase
Co-developing a Monitorable Action Plan not only to arrest further slippages but for Inducing Growth.
Adopting a customised holistic, cross-functional tool viz; the Aspirational P&L and Cash Flow evolved by the team from Amritasa.
The tool is measurable as well as monitorable.
Together with the Management, it starts from identifying low hanging opportunities for EBITDA and cash flow improvements across the entire organization relating to the top line, material margin, the conversion costs and overheads and capitalising on them moving towards high impact opportunities.
Also works on finance cost optimisation, on cash cycle optimisation and review of capital items. It also includes Strengthening systems & Controls and increased usage of IT.
The agreed Aspirational P&L and Cash Flow with an eye on identifying performance gaps and potential improvement opportunities are reviewed periodically.
The rich operational experience of the specialist team from Amritasa will hand hold to bring speed to execution.
Top Line Management:
Business Development-Order book review including pipeline and on-radar target business, Competitors’ analysis, cross selling opportunities, Environmental scanning.
Product Costing and Customer Profitability-the segregation into Must Have and May Have categories, Drawing the Market and the Product segmentation matrix, Customer Relationship and Targeting, Business Forecasting.
Identifying and/or channelising potential synergies.
Efficiency & Lean management Practices, Quality, Cost and Delivery Parameters, Balance Score Card.
MM reviews, Yield Improvement plan. Input-Output Ratio.
Middle line cost optimisation.
Supply Chain efficiencies.
Controlling entry and exit at Gates and Plants. Strengthening systems & Controls- Strengthening usage of IT.
Streamlining Inventory position, proper accounting for WIP & FG and Rejections.
Manpower-fit & proper, productivity improvement, rationalisation, involvement, training and development, statutory compliance corrective plan.
Cash Flow Management:
1. Approach is to differentiate between Cash flow impacters viz; the accumulators and the drainers and goes forward to draw action plan. Collection plan for old debtors with fortnightly reviews vis-à-vis agreed targets.
3. Cash cycle reduction
Reducing credit period with customers, Increasing the payment terms of RM & BOP vendors, Reducing the inventory holding days of RM & BOP, Reducing the Process time to the possible extent, Exploring Bill Discounting facilities with banks, Availing Cash discounts wherever possible.
4. Idle asset stripping for possible monetisation
5. Careful scrutiny of every Balance Sheet item to see if any thing can be monetised.
6. Cost base and Capex requirements-Capex-review/balancing equipments, new capex, obsolete, Repairs & Maintenance, Old/obsolete Idle Assets Monetising, Diversification opportunities, new opportunities exploring, make or buy review.