Successful turnarounds necessitate addressing core operating and financial issues in a timely manner to effectively restore profitability and manage cash flow challenges.
Emblematic of the challenge faced in recognizing performance issues is that, often, day-to-day working capital management and cash flow may not be the focus of a company’s management regime, until they hit a bump in the road. Such stresses can build up in an isolated manner or in aggregate. Ideally these situations can be identified and addressed in a timely manner by management or key stakeholders, such as lenders working in concert with the company.
Companies or their key stakeholders need to be proactive in addressing working capital, liquidity, and underlying performance issues. Turnaround management strategies set out to improve working capital and liquidity performance, as well as performance issues across the enterprise, through provision of a number of services and tools.
Key Strategies for Turnaround Management
Inventory optimization and health check
A macro analysis of your entire inventory portfolio, and a detailed report that reflects the optimal stockholding and service level based on your company’s operational specifics.
Supply chain costing evaluation
To uncover and understand any underlying supply chain issues that could prevent you from managing your inventory effectively in the future.
Cash flow management and modelling
Address solvency and liquidity issues by proactively managing available funds, understand the impact of drivers on cash flows, plan for different scenarios, evaluate risk, set and meet performance targets, and make more informed decisions.
Review your company’s performance against pre-determined targets and identifying variances in a timely fashion—both investigating them and addressing them, before they can become a significant issue.