United Mediation Services, Inc. Says There is Plenty of Cash That Remains to be Squeezed from Supply Chains, According to a New Study
Companies could wring a total of as much as $709 billion in excess cash flow from their supply chains by adjusting their inventory levels, getting their customers to pay their bills on time, and managing their accounts payable carefully.
Dallas, TX, August 06, 2010 --(PR.com)-- In the face of continuing unemployment and the attendant lag in consumer demand, however, how long can companies maintain respectable margins merely by growing leaner?
Maybe longer than you might think.
Opportunities still abound for doing more with less, according to a new study of the 1,000 largest U.S. companies (in terms of sales) by REL, a division of The Hackett Group. The study concludes that those companies could wring a total of as much as $709 billion in excess cash flow from their supply chains by adjusting their inventory levels, getting their customers to pay their bills on time, and managing their accounts payable carefully, according to research on working capital for the third quarter of 2009.
REL arrives at the $709 billion figure by calculating what would happen if all of the 1,000 companies could attain the working-capital performance of the top 25%. The companies could pick up $241 billion by doing a better job of collecting from their accounts receivable and $182 billion by managing their accounts payable more prudently.
Cutting down on the amount of cash tied up in working capital (current assets minus current liabilities) is a good thing because it increases the amount of cash available for a company to invest in itself or return to its shareholders. During the downturn, companies have placed more emphasis on getting more usable cash this way because the ability to do so by producing more revenue has diminished.
John Pillow of United Mediation Services in Dallas, Texas says, “UMS believe that many companies have 'muscled down' their working capital by taking short-term actions and setting tougher goals for accounts payable and receivable and for keeping inventory low. While such actions as delaying payments to suppliers and stopping production may have made sense at the time, they won't improve companies' ability to adjust to revenue opportunities just around the corner.” Pillow continues, “To be nimble enough to adjust to sudden shifts in customer behavior, companies need to zero in on demand planning and forecasting and build more flexibility into their supply chains.”
"Unless companies move to more "sustainable" working-capital management, companies run a risk if their response to economic recovery is overly euphoric," Pillow contends. "The immediate risk would be if we start to take off the controls in terms of buying and producing, and we blow our inventories at a rate faster than we increase the absolute business," he says. And that could happen, he notes, by companies "not producing according to true demand, but rather just producing."
About United Mediation Services, Inc.:
United Mediation Services is a nationwide company that has been in business for over 10 years. The founders of the company are college graduates with more than 20 years experience each in the collections industry. Each of the employees must have a minimum of 10 years of collection experience, and must be Certified Professional Debt Mediators. United Mediation Services, Inc. prides itself in the development of "The Ultimate System in Nationwide Mediations." This system dramatically decreases the need for litigation. However, if litigation is required to increase our chance of recovering your money, we have a nationwide legal system through our Bonded Commercial Attorney Network to accommodate such action.
Before an account is submitted through the legal system, each one of our Executive Directors must conclude that every effort has been exhausted to resolve it amicably. This alleviates only one person working the account and then sending it through the system, as is the case with most agencies (Note: the ones that actually litigate accounts).
Mr. Pillow is a strategic and analytical leader who for nearly 20 years worked with the hotel industry. He continually strives for improvement of business processes and people performance and is responsible for running marketing operations in and forming joint ventures with affiliated businesses and in the United States, Canada, India, Mexico, and Puerto Rico. Mr. Pillow holds a Bachelor of Science degree from the University of North Texas. He studied pre-law at the University of Texas, and he completed the Master of Hotel Supply program at the Educational Institute. In the past, he has served on the American Hotel and Lodging Association’s Technology Committee and their Legislative Affairs Committee as well as in the National Apartment Association. He is has been a member of the National Speakers Association.
Contact:
John Pillow
United Mediation Services, Inc
jpillow@unitedmediationservices.com
www.unitedmediationservice.com
###
Maybe longer than you might think.
Opportunities still abound for doing more with less, according to a new study of the 1,000 largest U.S. companies (in terms of sales) by REL, a division of The Hackett Group. The study concludes that those companies could wring a total of as much as $709 billion in excess cash flow from their supply chains by adjusting their inventory levels, getting their customers to pay their bills on time, and managing their accounts payable carefully, according to research on working capital for the third quarter of 2009.
REL arrives at the $709 billion figure by calculating what would happen if all of the 1,000 companies could attain the working-capital performance of the top 25%. The companies could pick up $241 billion by doing a better job of collecting from their accounts receivable and $182 billion by managing their accounts payable more prudently.
Cutting down on the amount of cash tied up in working capital (current assets minus current liabilities) is a good thing because it increases the amount of cash available for a company to invest in itself or return to its shareholders. During the downturn, companies have placed more emphasis on getting more usable cash this way because the ability to do so by producing more revenue has diminished.
John Pillow of United Mediation Services in Dallas, Texas says, “UMS believe that many companies have 'muscled down' their working capital by taking short-term actions and setting tougher goals for accounts payable and receivable and for keeping inventory low. While such actions as delaying payments to suppliers and stopping production may have made sense at the time, they won't improve companies' ability to adjust to revenue opportunities just around the corner.” Pillow continues, “To be nimble enough to adjust to sudden shifts in customer behavior, companies need to zero in on demand planning and forecasting and build more flexibility into their supply chains.”
"Unless companies move to more "sustainable" working-capital management, companies run a risk if their response to economic recovery is overly euphoric," Pillow contends. "The immediate risk would be if we start to take off the controls in terms of buying and producing, and we blow our inventories at a rate faster than we increase the absolute business," he says. And that could happen, he notes, by companies "not producing according to true demand, but rather just producing."
About United Mediation Services, Inc.:
United Mediation Services is a nationwide company that has been in business for over 10 years. The founders of the company are college graduates with more than 20 years experience each in the collections industry. Each of the employees must have a minimum of 10 years of collection experience, and must be Certified Professional Debt Mediators. United Mediation Services, Inc. prides itself in the development of "The Ultimate System in Nationwide Mediations." This system dramatically decreases the need for litigation. However, if litigation is required to increase our chance of recovering your money, we have a nationwide legal system through our Bonded Commercial Attorney Network to accommodate such action.
Before an account is submitted through the legal system, each one of our Executive Directors must conclude that every effort has been exhausted to resolve it amicably. This alleviates only one person working the account and then sending it through the system, as is the case with most agencies (Note: the ones that actually litigate accounts).
Mr. Pillow is a strategic and analytical leader who for nearly 20 years worked with the hotel industry. He continually strives for improvement of business processes and people performance and is responsible for running marketing operations in and forming joint ventures with affiliated businesses and in the United States, Canada, India, Mexico, and Puerto Rico. Mr. Pillow holds a Bachelor of Science degree from the University of North Texas. He studied pre-law at the University of Texas, and he completed the Master of Hotel Supply program at the Educational Institute. In the past, he has served on the American Hotel and Lodging Association’s Technology Committee and their Legislative Affairs Committee as well as in the National Apartment Association. He is has been a member of the National Speakers Association.
Contact:
John Pillow
United Mediation Services, Inc
jpillow@unitedmediationservices.com
www.unitedmediationservice.com
###
Contact
John Pillow
John Graham Pillow
214 427 0000
www.unitedmediationservices.info
John Graham Pillow
214 427 0000
www.unitedmediationservices.info
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