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Monday, November 5, 2012
With increasing appeal to investors, Integrated Funding modeling is becoming a particularly interesting topic.
Andice Integrated Funding (AIF) employs a generalist, diversified strategy of investing across a variety of industries with a focus on the lower-middle-market, investing in companies in the United States and Canada with revenues ranging from $5MM - $50MM.
What is Integrated Funding?
Integrated Funding is a unique mezzanine style of subordinated lending that mixes debt and equity. The debt component usually comes with interest rates of 12%-16% for a typical life of 4-6 years. Unlike most senior debt lender and banks, these interest rates do not typically fluctuate with prime and/or LIBOR rates. Integrated Funding is a hybrid of debt and equity, making it quite flexible. The flexibility enables it to be used in a variety of situations — including buyouts, corporate takeovers, mergers, acquisitions, growth capital, or recapitalizations.”
Intergrated Funding is currently on solid footing – it is a vibrant market opportunity. Demand and supply are both very high as a result of banks being half aggressive and half scared, it’s a good time to get deals done.
How does AIF Value Companies?
We share much of the same due diligence criteria as equity lenders. There are multiple factors that contribute to the attractiveness of an opportunity. In addition to the use of proceeds, amount of proceeds, type of transaction, and so on, we like to look at the management team and its past experience with leverage, very much akin to what an equity investor looks for in a business — a scalable business model, recurring revenue, and strong EBITDA margins.
What are the Benefits of AIF?
One of the biggest benefits of AIF is our partner-like mindset and significantly less dilution to the borrower as opposed to a direct equity investment. AIF is more like a private equity firm than a bank. We are a lender by design, and our capital network is deployed as debt, but we think more like a partner than a lender. We work extensively to help our client ompanies through our network and the resources that we can bring to bear. Because of the structure and the equity element of our royalty lending, we are very motivated to see the equity value of the company increase.
For more information visit as at www.andicefunding.com.
What is Integrated Funding?
Integrated Funding is a unique mezzanine style of subordinated lending that mixes debt and equity. The debt component usually comes with interest rates of 12%-16% for a typical life of 4-6 years. Unlike most senior debt lender and banks, these interest rates do not typically fluctuate with prime and/or LIBOR rates. Integrated Funding is a hybrid of debt and equity, making it quite flexible. The flexibility enables it to be used in a variety of situations — including buyouts, corporate takeovers, mergers, acquisitions, growth capital, or recapitalizations.”
Intergrated Funding is currently on solid footing – it is a vibrant market opportunity. Demand and supply are both very high as a result of banks being half aggressive and half scared, it’s a good time to get deals done.
How does AIF Value Companies?
We share much of the same due diligence criteria as equity lenders. There are multiple factors that contribute to the attractiveness of an opportunity. In addition to the use of proceeds, amount of proceeds, type of transaction, and so on, we like to look at the management team and its past experience with leverage, very much akin to what an equity investor looks for in a business — a scalable business model, recurring revenue, and strong EBITDA margins.
What are the Benefits of AIF?
One of the biggest benefits of AIF is our partner-like mindset and significantly less dilution to the borrower as opposed to a direct equity investment. AIF is more like a private equity firm than a bank. We are a lender by design, and our capital network is deployed as debt, but we think more like a partner than a lender. We work extensively to help our client ompanies through our network and the resources that we can bring to bear. Because of the structure and the equity element of our royalty lending, we are very motivated to see the equity value of the company increase.
For more information visit as at www.andicefunding.com.
Tuesday, October 9, 2012
Thursday, August 30, 2012
The Post-Labor Day Boom
Monday is Labor Day and that means two things: the end of summer and the beginning of the busiest period for the PE industry. It’s time for the inevitable post-Labor Day boom. Although everyone knows it exists, we decided to try to quantify the boom. How much does deal activity actually pick up after Labor Day?
To investigate, we dove into the data from 2011. We looked at deal activity on AxialMarket a month before and two months after the holiday. The rumors are confirmed - the number of deals brought to market the week after Labor Day increased 20% compared to the week before. The second week back saw dealflow increase another 47%. By the second week in October, the weekly deal number (and presumably your workload) was nearly 3x larger than any week in August.
To investigate, we dove into the data from 2011. We looked at deal activity on AxialMarket a month before and two months after the holiday. The rumors are confirmed - the number of deals brought to market the week after Labor Day increased 20% compared to the week before. The second week back saw dealflow increase another 47%. By the second week in October, the weekly deal number (and presumably your workload) was nearly 3x larger than any week in August.
Looks like a busy couple of months ahead - hope you’re well rested. Enjoy the weekend and see you back in the market next week!
Wednesday, August 29, 2012
Friday, August 24, 2012
Tuesday, August 21, 2012
Andice Integrated Funding: Intelligent Growth Capital
While questions remain about where the economy may be heading into the latter half of the year, we have seen entrepreneurs obtaining larger orders and taking advantage of opportunities by utilizing our working capital and integrated funding programs.
AIF provides funding of inventory required to fill sales orders from credit worthy end buyers at an advance rate of up to 100% of the cost of the inventory. AIF, as a funding integrator we also work with a factor, asset-based lenders, or banks in each of our transactions and look to partner with senior debt financing sources thereby providing a completely integrated supply chain funding solutions.
Our funding programs are customized to support:
• Finished goods inventory trade transactions for importers, exporters, and wholesale distributors
• Production or value added transactions for light manufacturers, assemblers, and processors
• Companies operating in consumer goods, industrial products, food, and government contract industries
AIF specialized funding programs provide:
• Funding for transactions ranging in size from $300,000 to $200,000,000 or more
• Letters of credit, credit guarantees or cash funding for the purchase of finished goods, raw materials, components, and logistics costs. In certain cases, funding can be made for direct labor and direct overhead relating to specific transactions.
Please call us today to discuss any opportunity that could use our integrated funding expertise and capacity for working capital and contract funding in the U.S. and Canada.
Thank you for your continued support as we look forward to working with you in the near future.
Ann Reade-Moore
www.andicefunding.com
AIF provides funding of inventory required to fill sales orders from credit worthy end buyers at an advance rate of up to 100% of the cost of the inventory. AIF, as a funding integrator we also work with a factor, asset-based lenders, or banks in each of our transactions and look to partner with senior debt financing sources thereby providing a completely integrated supply chain funding solutions.
Our funding programs are customized to support:
• Finished goods inventory trade transactions for importers, exporters, and wholesale distributors
• Production or value added transactions for light manufacturers, assemblers, and processors
• Companies operating in consumer goods, industrial products, food, and government contract industries
AIF specialized funding programs provide:
• Funding for transactions ranging in size from $300,000 to $200,000,000 or more
• Letters of credit, credit guarantees or cash funding for the purchase of finished goods, raw materials, components, and logistics costs. In certain cases, funding can be made for direct labor and direct overhead relating to specific transactions.
Please call us today to discuss any opportunity that could use our integrated funding expertise and capacity for working capital and contract funding in the U.S. and Canada.
Thank you for your continued support as we look forward to working with you in the near future.
Ann Reade-Moore
www.andicefunding.com
Thursday, August 16, 2012
Wednesday, August 15, 2012
Manufacturing Is Returning to America
Although it may not be the panacea that everyone seems to think it will be.
The robots of today aren’t the androids or Cylons that we are used to seeing in science fiction movies, but specialized electromechanical devices run by software and remote control. As computers become more powerful, so do the abilities of these devices. Robots are now capable of performing surgery, milking cows, doing military reconnaissance and combat, and flying fighter jets. Several companies, such as Willow Garage, iRobot and 9th Sense, sell robot-development kits for which university students and open-source communities are developing ever-more sophisticated applications.
Note what’s missing from this picture: Jobs for people from the left side of the Bell Curve, the sort of people who work on assembly lines and join unions. This is bad news for the Democrats and throws them back on the other half of their base, i.e. welfare recipients. Look for them to push even harder for increased dependency on the government largesse that they use to buy votes.
How will we turn these designs into products? By “printing” them at home or at modern-day Kinko’s using shared public manufacturing facilities such as TechShop, a membership-based manufacturing workshop featuring manufacturing technologies now on the horizon.
Another hit for the working class. The emerging technology of ‘contour crafting’ will affect the building trades the way that Henry Ford’s assembly line did the manufacturing trades. Once we have programmable machines to ‘print’ houses, there won’t be a lot for bricklayers, carpenters, plumbers, and electricians to do.
In additive manufacturing, parts are produced by melting successive layers of materials based on three-dimensional models — adding materials rather than subtracting them. The “3D printers” that produce these parts use powdered metal, droplets of plastic and other materials — much like the toner cartridges that go into laser printers. This allows the creation of objects without tools or fixtures. The process doesn’t produce waste material and there is no additional cost for complexity. Just as, thanks to laser printers, a page filled with graphics doesn’t cost much more than one with text (other than the cost of toner), with 3D printers we can print a sophisticated 3D structure for what it would cost to print something simple.
More efficient, more economical, more ‘green’ — you name it, automation does it. What happens when ‘customized’ products are the same price as mass-produced? The ‘fashion’ industry ought to be getting pretty nervous right about now. Upside: Prices will plummet. Downside: How are people going to pay even these low prices without a job to generate income?
Of course, there will always be niche positions for custom craftsmen — there are people today making a living doing custom wood and stone work — but that’s not going to float the working class.
This entry was posted on Monday, August 13th, 2012 at 03:58 and is filed under Think about it. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.
The robots of today aren’t the androids or Cylons that we are used to seeing in science fiction movies, but specialized electromechanical devices run by software and remote control. As computers become more powerful, so do the abilities of these devices. Robots are now capable of performing surgery, milking cows, doing military reconnaissance and combat, and flying fighter jets. Several companies, such as Willow Garage, iRobot and 9th Sense, sell robot-development kits for which university students and open-source communities are developing ever-more sophisticated applications.
Note what’s missing from this picture: Jobs for people from the left side of the Bell Curve, the sort of people who work on assembly lines and join unions. This is bad news for the Democrats and throws them back on the other half of their base, i.e. welfare recipients. Look for them to push even harder for increased dependency on the government largesse that they use to buy votes.
How will we turn these designs into products? By “printing” them at home or at modern-day Kinko’s using shared public manufacturing facilities such as TechShop, a membership-based manufacturing workshop featuring manufacturing technologies now on the horizon.
Another hit for the working class. The emerging technology of ‘contour crafting’ will affect the building trades the way that Henry Ford’s assembly line did the manufacturing trades. Once we have programmable machines to ‘print’ houses, there won’t be a lot for bricklayers, carpenters, plumbers, and electricians to do.
In additive manufacturing, parts are produced by melting successive layers of materials based on three-dimensional models — adding materials rather than subtracting them. The “3D printers” that produce these parts use powdered metal, droplets of plastic and other materials — much like the toner cartridges that go into laser printers. This allows the creation of objects without tools or fixtures. The process doesn’t produce waste material and there is no additional cost for complexity. Just as, thanks to laser printers, a page filled with graphics doesn’t cost much more than one with text (other than the cost of toner), with 3D printers we can print a sophisticated 3D structure for what it would cost to print something simple.
More efficient, more economical, more ‘green’ — you name it, automation does it. What happens when ‘customized’ products are the same price as mass-produced? The ‘fashion’ industry ought to be getting pretty nervous right about now. Upside: Prices will plummet. Downside: How are people going to pay even these low prices without a job to generate income?
Of course, there will always be niche positions for custom craftsmen — there are people today making a living doing custom wood and stone work — but that’s not going to float the working class.
This entry was posted on Monday, August 13th, 2012 at 03:58 and is filed under Think about it. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.
Monday, August 6, 2012
Wednesday, July 25, 2012
Wednesday, July 11, 2012
New Trends of Sustainable Development of Manufacturing Industry
New Trends of Sustainable Development of Manufacturing Industry
Establish a sound system for technological innovation is the key to the sustainable development of China”s equipment manufacturing industry. Of technological innovation system of the equipment manufacturing industry is a common Basic Research → Research → Product Development → industrialization, this structure shows that based on common technology is indispensable, and research institutes in China structural reform to the weakening or even absence of the R & D based on common technology are already evident, is not conducive to the overall innovation. At present, the conversion Institutes of public services to rebuild infrastructure and common technology platform has become essential; otherwise it will affect our overall strategic process of the establishment of an innovative country.
So, what industry is considered high-end equipment manufacturing industry? Next focus of development where? Summed up the view of experts, the areas covered by the high-end equipment manufacturing industry, including aviation equipment, satellite and its application industry, rail transportation equipment marine engineering equipment, and intelligent manufacturing equipment, and so on. These industries have a technology-intensive, high added value and strong leading role, the high-end part of the equipment manufacturing industry, and all belong to the emerging industry. Traditional industries cannot be assigned to them. For example, one million kilowatts of ultra-supercritical generating units, although a high-end part of the manufacturing sector, but it belongs to the traditional industries, and therefore cannot be included in the areas of focus on the development of high-end equipment manufacturing. Some ore equipment manufacturer – ball mill manufacturers must also forward to the high-end intelligent, in order to meet development needs.
In the various fields of high-end equipment manufacturing, intelligent manufacturing equipment is still relatively new concept, but also much concern. The so-called intelligent manufacturing equipment is the perception, analysis, reasoning, decision making, manufacturing equipment control functions; it is an advanced manufacturing technology, information technology and smart technology integration and depth of integration. The development of intelligent manufacturing equipment include: focus on promoting high-end CNC machine tools and basic manufacturing equipment, complete production line automation, intelligent control systems, sophisticated and intelligent instruments and instrumentation and test equipment, the key foundation components, parts and general parts, intelligent dedicated equipment development of production process automation, intelligent, precision, green, driving the overall technology level of the industry. Example, in the field of sophisticated and intelligent instrumentation and test equipment, it should address the development of biological, energy saving and environmental protection, petrochemical and other industries need to focus on the development of intelligent pressure, flow, level, composition, materials, mechanical properties, such as precision instrument and scientific instruments and the environment, security and defense, special testing equipment. In key infrastructure components, parts and general parts of the field to focus on the development of high-parameter, high precision and high reliability bearings, hydraulic / pneumatic / sealing components, gear drives and large, sophisticated, complex, long-life mold and so on.china jaw crusher:http://www.hxjqchina.com/n69.html
artificial sand maker:http://www.hx-china.com/9.html
In the field of intelligent dedicated equipment should focus on the development of a new generation of large electric power and grid equipment, robotics industry, TBM, rapid integration of flexible construction equipment such as intelligent construction machinery, as well as large advanced and efficient intelligent agricultural machinery.
Also, the large aircraft, regional aircraft and general aviation aircraft for the application object, the use of aircraft manufacturing, the combination of machine tool manufacturing and materials production enterprises, the focus on the development of composite materials preparation equipment, automatic auxiliary band / auxiliary wire device, component processing machine, ultrasonic processing / high pressure water cutting equipment and grinding ball mill equipment.
Posted on July 10, 2012, 2:20 am, by lilyyoung89, under I Love Gingers.
Establish a sound system for technological innovation is the key to the sustainable development of China”s equipment manufacturing industry. Of technological innovation system of the equipment manufacturing industry is a common Basic Research → Research → Product Development → industrialization, this structure shows that based on common technology is indispensable, and research institutes in China structural reform to the weakening or even absence of the R & D based on common technology are already evident, is not conducive to the overall innovation. At present, the conversion Institutes of public services to rebuild infrastructure and common technology platform has become essential; otherwise it will affect our overall strategic process of the establishment of an innovative country.
So, what industry is considered high-end equipment manufacturing industry? Next focus of development where? Summed up the view of experts, the areas covered by the high-end equipment manufacturing industry, including aviation equipment, satellite and its application industry, rail transportation equipment marine engineering equipment, and intelligent manufacturing equipment, and so on. These industries have a technology-intensive, high added value and strong leading role, the high-end part of the equipment manufacturing industry, and all belong to the emerging industry. Traditional industries cannot be assigned to them. For example, one million kilowatts of ultra-supercritical generating units, although a high-end part of the manufacturing sector, but it belongs to the traditional industries, and therefore cannot be included in the areas of focus on the development of high-end equipment manufacturing. Some ore equipment manufacturer – ball mill manufacturers must also forward to the high-end intelligent, in order to meet development needs.
In the various fields of high-end equipment manufacturing, intelligent manufacturing equipment is still relatively new concept, but also much concern. The so-called intelligent manufacturing equipment is the perception, analysis, reasoning, decision making, manufacturing equipment control functions; it is an advanced manufacturing technology, information technology and smart technology integration and depth of integration. The development of intelligent manufacturing equipment include: focus on promoting high-end CNC machine tools and basic manufacturing equipment, complete production line automation, intelligent control systems, sophisticated and intelligent instruments and instrumentation and test equipment, the key foundation components, parts and general parts, intelligent dedicated equipment development of production process automation, intelligent, precision, green, driving the overall technology level of the industry. Example, in the field of sophisticated and intelligent instrumentation and test equipment, it should address the development of biological, energy saving and environmental protection, petrochemical and other industries need to focus on the development of intelligent pressure, flow, level, composition, materials, mechanical properties, such as precision instrument and scientific instruments and the environment, security and defense, special testing equipment. In key infrastructure components, parts and general parts of the field to focus on the development of high-parameter, high precision and high reliability bearings, hydraulic / pneumatic / sealing components, gear drives and large, sophisticated, complex, long-life mold and so on.china jaw crusher:http://www.hxjqchina.com/n69.html
artificial sand maker:http://www.hx-china.com/9.html
In the field of intelligent dedicated equipment should focus on the development of a new generation of large electric power and grid equipment, robotics industry, TBM, rapid integration of flexible construction equipment such as intelligent construction machinery, as well as large advanced and efficient intelligent agricultural machinery.
Also, the large aircraft, regional aircraft and general aviation aircraft for the application object, the use of aircraft manufacturing, the combination of machine tool manufacturing and materials production enterprises, the focus on the development of composite materials preparation equipment, automatic auxiliary band / auxiliary wire device, component processing machine, ultrasonic processing / high pressure water cutting equipment and grinding ball mill equipment.
Posted on July 10, 2012, 2:20 am, by lilyyoung89, under I Love Gingers.
Tuesday, July 10, 2012
A Burden Now, a Blessing Later?
A Burden Now, a Blessing Later?
Posted by David McCann | July 05, 2012
I’m a lifelong, avid baseball fan, and when others of my ilk pose “best player” questions, I always query back: best over the course of his career, or best at the peak of his abilities? Sandy Koufax had a short career during which he was inconsistent in the early years but more than brilliant for a final few. Don Sutton was at no time regarded as among the best few pitchers, but bit by bit, over 23 years, he compiled a set of numbers that eventually propelled him, like his one-time teammate Koufax, to the Hall of Fame.http://www3.cfo.com/blogs/human-capital-careers/human-capital--careers-blog/2012/07/A-Burden-Now-a-Blessing-Later
Those guys played decades ago. But these days, when I hear people voice opinions on the Patient Protection and Affordable Care Act — which has been quite often the past two-plus years, reaching a crescendo recently — I notice a reminiscent whiff of that baseball dichotomy. By that I mean, if someone asks me whether I think this law makes sense, I want to rejoin with: over the short term, or over the long term?
In today’s immediacy, the machinations and regulatory interpretations of the law are imposing pain on a host of parties, including health-care providers, insurers, and, most notably to CFO’s audience, companies generally. The costs of compliance are annoying and frustrating. Many are angry at Congress for allegedly overstepping its authority in passing the still-new law, and at the Supreme Court for last week endorsing that supposed faux pas. Some CFOs, as we reported then, are dismayed that they still don’t have closure on the fate of the law, given that the next Congress will probably continue the lively fight over whether to modify or repeal it.
Those are certainly understandable and reasonable objections — even the last one, despite some comments posted to our article that railed against the CFOs quoted in it for sounding like they were too ineffectual to move forward. Please, give these finance chiefs a break. They and their peers strive for efficiency, a goal that is significantly hampered, when it comes to health-care benefits, by having to comply with a law that may or may not exist a year from now.
Still, if even the short-term implications of the law and the court decision are not clear, can anyone say with even modest confidence what the long-term implications might be?
For example, what if the PPACA were allowed to fully flower? If, as the law contemplates, providers were paid based on patient outcomes, rather than on the number of patient visits, procedures performed, and tests ordered? If insurers were forced by the law to reduce administrative costs in order to avoid mandatory customer rebates? If the state health-insurance exchanges that may be created under the law worked so well that many companies could eventually find relief from the burden of paying for workers’ health care at all, not to mention the compliance burden?
Look, I know it’s not as simple as that. The PPACA has many provisions that may be cost factors for corporations in both the short and long terms. The incremental dollars to be pumped into the health-care system by the mandate that almost everyone obtain health insurance might not be enough to pay for all the concessions the insurance industry made, like eliminating annual and lifetime coverage caps and the prohibition on denying coverage to anyone, even those with chronic pre-existing conditions. Additionally, numerous unintended consequences of the law, negative or positive, are almost certain to crop up.
But it was never intended to be an immediate panacea to all of the woes related to health care that plague our society, the economy, and corporate bottom lines. It is a stake in the ground that acknowledges those woes that explicitly says, “There are problems afoot. They need to be dealt with.” And that implicitly says, “Here is a start. And from this start, we can smooth out the law and make it better and fairer over time.”
Companies should, with respect to the health-care arena, climb out of their quarter-to-quarter foxhole, support efforts to gradually improve the system, and look to a farther time horizon. It’s just possible that the view might not be as terrifying as they thought.
Source:
Posted by David McCann | July 05, 2012
I’m a lifelong, avid baseball fan, and when others of my ilk pose “best player” questions, I always query back: best over the course of his career, or best at the peak of his abilities? Sandy Koufax had a short career during which he was inconsistent in the early years but more than brilliant for a final few. Don Sutton was at no time regarded as among the best few pitchers, but bit by bit, over 23 years, he compiled a set of numbers that eventually propelled him, like his one-time teammate Koufax, to the Hall of Fame.http://www3.cfo.com/blogs/human-capital-careers/human-capital--careers-blog/2012/07/A-Burden-Now-a-Blessing-Later
Those guys played decades ago. But these days, when I hear people voice opinions on the Patient Protection and Affordable Care Act — which has been quite often the past two-plus years, reaching a crescendo recently — I notice a reminiscent whiff of that baseball dichotomy. By that I mean, if someone asks me whether I think this law makes sense, I want to rejoin with: over the short term, or over the long term?
In today’s immediacy, the machinations and regulatory interpretations of the law are imposing pain on a host of parties, including health-care providers, insurers, and, most notably to CFO’s audience, companies generally. The costs of compliance are annoying and frustrating. Many are angry at Congress for allegedly overstepping its authority in passing the still-new law, and at the Supreme Court for last week endorsing that supposed faux pas. Some CFOs, as we reported then, are dismayed that they still don’t have closure on the fate of the law, given that the next Congress will probably continue the lively fight over whether to modify or repeal it.
Those are certainly understandable and reasonable objections — even the last one, despite some comments posted to our article that railed against the CFOs quoted in it for sounding like they were too ineffectual to move forward. Please, give these finance chiefs a break. They and their peers strive for efficiency, a goal that is significantly hampered, when it comes to health-care benefits, by having to comply with a law that may or may not exist a year from now.
Still, if even the short-term implications of the law and the court decision are not clear, can anyone say with even modest confidence what the long-term implications might be?
For example, what if the PPACA were allowed to fully flower? If, as the law contemplates, providers were paid based on patient outcomes, rather than on the number of patient visits, procedures performed, and tests ordered? If insurers were forced by the law to reduce administrative costs in order to avoid mandatory customer rebates? If the state health-insurance exchanges that may be created under the law worked so well that many companies could eventually find relief from the burden of paying for workers’ health care at all, not to mention the compliance burden?
Look, I know it’s not as simple as that. The PPACA has many provisions that may be cost factors for corporations in both the short and long terms. The incremental dollars to be pumped into the health-care system by the mandate that almost everyone obtain health insurance might not be enough to pay for all the concessions the insurance industry made, like eliminating annual and lifetime coverage caps and the prohibition on denying coverage to anyone, even those with chronic pre-existing conditions. Additionally, numerous unintended consequences of the law, negative or positive, are almost certain to crop up.
But it was never intended to be an immediate panacea to all of the woes related to health care that plague our society, the economy, and corporate bottom lines. It is a stake in the ground that acknowledges those woes that explicitly says, “There are problems afoot. They need to be dealt with.” And that implicitly says, “Here is a start. And from this start, we can smooth out the law and make it better and fairer over time.”
Companies should, with respect to the health-care arena, climb out of their quarter-to-quarter foxhole, support efforts to gradually improve the system, and look to a farther time horizon. It’s just possible that the view might not be as terrifying as they thought.
Source:
Sunday, July 8, 2012
Tuesday, July 3, 2012
US manufacturing shrinks for first time in 3 years
BY NEIL SHAH AND BEN CASSELMAN
The global economic slowdown has finally caught up with American manufacturers.
The U.S. factory sector shrank in June for the first time since July 2009—the first month of the economic recovery—the Institute for Supply Management said Monday. Exports fell, and new orders, which gauge future factory activity, dropped at their fastest pace since the post-9/11 plunge in October 2001.
The report is the strongest evidence yet that Europe's troubles and slowing growth in China are hurting American factories, one of the biggest drivers of the U.S. recovery. Separate reports have shown U.S. exports fell in April for the first time.
The global economic slowdown has finally caught up with American manufacturers.
The U.S. factory sector shrank in June for the first time since July 2009—the first month of the economic recovery—the Institute for Supply Management said Monday. Exports fell, and new orders, which gauge future factory activity, dropped at their fastest pace since the post-9/11 plunge in October 2001.
The report is the strongest evidence yet that Europe's troubles and slowing growth in China are hurting American factories, one of the biggest drivers of the U.S. recovery. Separate reports have shown U.S. exports fell in April for the first time.
Tuesday, June 26, 2012
Thursday, June 21, 2012
Five Capabilities That Mid-Sized Manufacturers Need To Build
A mid-sized manufacturer needs to do the following five things right, so it can continue to successfully compete and maintain its growth rate.
Mid-size companies, with revenues between $10 million and $1 billion, are expected to outpace larger companies in growth over the next 12 months, according to recent research by the Ohio State University Fisher College of Business and GE Capital.
These companies account for a third of the nation’s GDP, more than 41 million jobs, and are considered a leading indicator of America’s future competitiveness. Mid-sized companies added 2.2 million jobs between 2007 and 2010 (a period of economic crisis), while big businesses shed 3.7 million jobs during the same period. Although mid-market companies may not dominate the headlines, they are the engine of the American economy. This article identifies the advantages that mid-sized manufacturers have (which drive their growth) and the key investments they need to make in continuing to maintain this growth.
Mid-sized manufacturing companies have three very big advantages over larger companies. They are:
■Focus: Unlike large companies, a mid-sized manufacturing company offers a narrow range of products and services, allowing them to maintain a sharp focus. As a result, their business and market strategies are more crisp, resulting in a better potential to out-execute the large manufacturers.
■Speed: The ability to move faster than larger companies to take advantage of a new market opportunity is one of the biggest advantages of mid-sized manufacturing companies. The likely presence of an entrepreneurial founder (or a family member) running the day-to-day operations, coupled with smaller size, allows mid-sized companies to move quickly when they identify a new opportunity in an existing or related market segment.
■Closeness to customers: Customer relationships and satisfaction are important for any business’s success, but mid-sized manufacturers (especially those that are family owned) take it to the next level by connecting with the customers they deal with, emphasizing the community and accentuating the personal touch. Their sharper focus and smaller size enable them to stay closer to their customers.
As we discussed above, the primary source of a mid-sized manufacturer’s competitive advantage is its ability to stay close to its customers, be nimble and offer superior service, while still making respectable margins. But as such companies grow, they begin to get squeezed from both sides – they can no longer be as flexible and personalized as their smaller competitors, but at the same time, they do not have the operational sophistication to compete with the big boys. This affects their ability to grow at the pace they want. How can they counter it?
A mid-sized manufacturer needs to do the following five things right, so it can continue to successfully compete and maintain its growth rate:
■Hire the right managerial skill set: As an organization grows, it needs managerial talent who know how to scale the company to the next inflection point. Lack of such skills within the company has tripped many companies who were very successful when they were small, but are now struggling. Mid-sized manufacturers also need managers who know how to grow their business internationally. Easy growth in revenues and profits from an expanding domestic economy is gone – so mid-sized companies have to build their presence in the fast-growing emerging economies. As a result, they need to hire managerial talent that has done this before and knows how to navigate these new waters.
■Gain access to cash and working capital: Most mid-sized companies need access to sufficient working capital to fuel their growth. While financial discipline ensures they have sufficient cash-on-hand, it is often not enough to fund their growth. Challenges to improving working capital performance remain, partly as a result of mid-market firms deriving a large volume of business (57%) from bigger companies. This imbalance, according to an American Express study, affects their ability to negotiate better deals and payment terms, requiring them to tap into financing arrangements outside the company. As a result, mid-sized businesses need to continuously evaluate and build relationships with banks and capital markets to fund their cash and working capital needs.
■Deploy technology that provides insights into business performance: Mid-sized companies have limited resources. Therefore, they cannot afford to make many mistakes. They need visibility into what is working well, so it can be quickly capitalized. They also need visibility into what is not working well, so it can be rapidly addressed. For example, if their managers have analytics technology that provides clear visibility into planned vs. actual revenue, costs, and spend for new products introduced in the last 12 months, they could easily identify poor performers and quickly shift the spending away from them until their issues were addressed. Without the benefit of such information, it may take either longer to make such decisions, and they may continue betting on poor performers. Continued success also comes from getting everyone in the company on the same page, using the same set of assumptions, and seeing the same version of the truth. For example, if engineering, sales, finance, and marketing organizations use the same analysis on marketing pipeline trends, quarterly sales performance and profitability by various segments, they are more likely to share the same conclusions and be aligned on priorities to maximize growth and fix problem areas.
■Look bigger than they are: One of the greatest challenges for a mid-size company is to find a way to profitably scale their operations. They now need to look big in the eyes of their large customers – where the average lifetime contract value is highly prized and will provide fuel for their rapid growth. But in order to successfully acquire such customers, they must appear seasoned in all aspects of their customer interactions – from marketing campaigns, to sales force’s interactions with customers, to after-sales support and service. Examples include:
◦Being able to segment the prospect base and deliver highly customized marketing campaigns to them at a caliber one expects from large companies.
◦Enabling sales people to have ready access via their mobile phones to information such as pricing or configuration or shipment dates, providing for rich customer interactions.
◦Providing specialized support to VIP customers by routing calls quickly to the best support people and rapidly escalating unresolved issues.
CRM technology implements such capabilities, so the organization will appear seasoned and operationally sound to the bigger prospects.
■Improve operational capabilities and deploy changes rapidly: In order to scale successfully, mid-sized manufacturers also need to develop operational sophistication to predictably deliver the right product to the right customer at the right time in the right quantity at the right cost. It requires extremely tight integration between the front-office (sales, marketing, and service) and back-office operations (engineering, planning, procurement, manufacturing, distribution and finance) to coordinate all aspects of the supply chain to meet customer commitments. It requires eliminating any information silos within the organization and across the supply chain, so nothing can fall through the cracks. But that is not enough. Agility, one of the sources of competitive advantage of mid-sized companies, cannot be sacrificed in favor of well-defined and integrated processes. Mid-sized organizations need to ensure their technology is flexible, so they can quickly deploy process changes to support rapid deployment of new initiatives or rapidly respond to shifting market dynamics.
Mid-sized companies are the growth engine of US economy. A mid-sized company that develops these five capabilities can continue to successfully compete in the market against companies of all sizes and grow its business.
--------------------------------------------------------------------------------
By: Mindy Fiorentino, SAP Mindy Fiorentino is Vice President of Portfolio Marketing in the Global Ecosystem Channels Solution Marketing Group at SAP
Mid-size companies, with revenues between $10 million and $1 billion, are expected to outpace larger companies in growth over the next 12 months, according to recent research by the Ohio State University Fisher College of Business and GE Capital.
These companies account for a third of the nation’s GDP, more than 41 million jobs, and are considered a leading indicator of America’s future competitiveness. Mid-sized companies added 2.2 million jobs between 2007 and 2010 (a period of economic crisis), while big businesses shed 3.7 million jobs during the same period. Although mid-market companies may not dominate the headlines, they are the engine of the American economy. This article identifies the advantages that mid-sized manufacturers have (which drive their growth) and the key investments they need to make in continuing to maintain this growth.
Mid-sized manufacturing companies have three very big advantages over larger companies. They are:
■Focus: Unlike large companies, a mid-sized manufacturing company offers a narrow range of products and services, allowing them to maintain a sharp focus. As a result, their business and market strategies are more crisp, resulting in a better potential to out-execute the large manufacturers.
■Speed: The ability to move faster than larger companies to take advantage of a new market opportunity is one of the biggest advantages of mid-sized manufacturing companies. The likely presence of an entrepreneurial founder (or a family member) running the day-to-day operations, coupled with smaller size, allows mid-sized companies to move quickly when they identify a new opportunity in an existing or related market segment.
■Closeness to customers: Customer relationships and satisfaction are important for any business’s success, but mid-sized manufacturers (especially those that are family owned) take it to the next level by connecting with the customers they deal with, emphasizing the community and accentuating the personal touch. Their sharper focus and smaller size enable them to stay closer to their customers.
As we discussed above, the primary source of a mid-sized manufacturer’s competitive advantage is its ability to stay close to its customers, be nimble and offer superior service, while still making respectable margins. But as such companies grow, they begin to get squeezed from both sides – they can no longer be as flexible and personalized as their smaller competitors, but at the same time, they do not have the operational sophistication to compete with the big boys. This affects their ability to grow at the pace they want. How can they counter it?
A mid-sized manufacturer needs to do the following five things right, so it can continue to successfully compete and maintain its growth rate:
■Hire the right managerial skill set: As an organization grows, it needs managerial talent who know how to scale the company to the next inflection point. Lack of such skills within the company has tripped many companies who were very successful when they were small, but are now struggling. Mid-sized manufacturers also need managers who know how to grow their business internationally. Easy growth in revenues and profits from an expanding domestic economy is gone – so mid-sized companies have to build their presence in the fast-growing emerging economies. As a result, they need to hire managerial talent that has done this before and knows how to navigate these new waters.
■Gain access to cash and working capital: Most mid-sized companies need access to sufficient working capital to fuel their growth. While financial discipline ensures they have sufficient cash-on-hand, it is often not enough to fund their growth. Challenges to improving working capital performance remain, partly as a result of mid-market firms deriving a large volume of business (57%) from bigger companies. This imbalance, according to an American Express study, affects their ability to negotiate better deals and payment terms, requiring them to tap into financing arrangements outside the company. As a result, mid-sized businesses need to continuously evaluate and build relationships with banks and capital markets to fund their cash and working capital needs.
■Deploy technology that provides insights into business performance: Mid-sized companies have limited resources. Therefore, they cannot afford to make many mistakes. They need visibility into what is working well, so it can be quickly capitalized. They also need visibility into what is not working well, so it can be rapidly addressed. For example, if their managers have analytics technology that provides clear visibility into planned vs. actual revenue, costs, and spend for new products introduced in the last 12 months, they could easily identify poor performers and quickly shift the spending away from them until their issues were addressed. Without the benefit of such information, it may take either longer to make such decisions, and they may continue betting on poor performers. Continued success also comes from getting everyone in the company on the same page, using the same set of assumptions, and seeing the same version of the truth. For example, if engineering, sales, finance, and marketing organizations use the same analysis on marketing pipeline trends, quarterly sales performance and profitability by various segments, they are more likely to share the same conclusions and be aligned on priorities to maximize growth and fix problem areas.
■Look bigger than they are: One of the greatest challenges for a mid-size company is to find a way to profitably scale their operations. They now need to look big in the eyes of their large customers – where the average lifetime contract value is highly prized and will provide fuel for their rapid growth. But in order to successfully acquire such customers, they must appear seasoned in all aspects of their customer interactions – from marketing campaigns, to sales force’s interactions with customers, to after-sales support and service. Examples include:
◦Being able to segment the prospect base and deliver highly customized marketing campaigns to them at a caliber one expects from large companies.
◦Enabling sales people to have ready access via their mobile phones to information such as pricing or configuration or shipment dates, providing for rich customer interactions.
◦Providing specialized support to VIP customers by routing calls quickly to the best support people and rapidly escalating unresolved issues.
CRM technology implements such capabilities, so the organization will appear seasoned and operationally sound to the bigger prospects.
■Improve operational capabilities and deploy changes rapidly: In order to scale successfully, mid-sized manufacturers also need to develop operational sophistication to predictably deliver the right product to the right customer at the right time in the right quantity at the right cost. It requires extremely tight integration between the front-office (sales, marketing, and service) and back-office operations (engineering, planning, procurement, manufacturing, distribution and finance) to coordinate all aspects of the supply chain to meet customer commitments. It requires eliminating any information silos within the organization and across the supply chain, so nothing can fall through the cracks. But that is not enough. Agility, one of the sources of competitive advantage of mid-sized companies, cannot be sacrificed in favor of well-defined and integrated processes. Mid-sized organizations need to ensure their technology is flexible, so they can quickly deploy process changes to support rapid deployment of new initiatives or rapidly respond to shifting market dynamics.
Mid-sized companies are the growth engine of US economy. A mid-sized company that develops these five capabilities can continue to successfully compete in the market against companies of all sizes and grow its business.
--------------------------------------------------------------------------------
By: Mindy Fiorentino, SAP Mindy Fiorentino is Vice President of Portfolio Marketing in the Global Ecosystem Channels Solution Marketing Group at SAP
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