IT and ERP Factors in Turnarounds

IT and enterprise systems (ERP) – their state of disrepair and management – are frequently central factors in managing a turnaround, but just as frequently overlooked or set to the side by turnaround leaders.  This article drills into these difficulties and opportunities and illustrates the ways in which effective change and crisis management methods can leverage IT and the ERP system so they become a key part of the operational turnaround’s success.  In many situations, the success of the turnaround effort may depend heavily on how well the IT/ERP aspects are handled.

How Inventory Distorts Cost Information

Inventory is an integral part of every product oriented company, whether it is a distributor, assembler, or vertically integrated production operation.  It is normal for otherwise capable business, financial, production, and material management people to make major decisions that are intended to reduce cost that fail to take ALL costs into consideration, and so run awry.  We call these hidden costs, because they don’t appear on reports or statements, but are reflected and buried in other cost values.  A detailed awareness of these costs strengthens the moves a turnaround leader can make to cut large portions of asset values out while reducing these other costs.

An Unthinkable Turnaround Story

The discussion of Semco SA, in his remarkable book, The Age of the Unthinkable, Joshua Cooper Ramo provides remarkable insights for those interested in the rapid performance improvements required by turnaround work.  Semco SA is a truly amazing, break-all-the-rules turnaround.  Set in Brazil, in the 1990s, when inflation was running 1,000% /year, in an economy where 1 in 4 companies went bankrupt, and the government had seized 80% of all cash, Semco made some remarkable changes and resumed profitable growth at a 40%/yr rate.  We should all know about this one.

Opportunities As the Tide Turns

In a companion article, we discuss the opportunity to generate value and make money that is increasingly coming into view.  It is the failures of the much-vaunted off-shoring strategy, aka, the “China strategy” that is generating these new, substantial opportunities.  

Profiting While Creating US Jobs

It is obvious that the economy is undergoing major changes. Millions of jobs have disappeared, companies are hanging on, banks are “praying and pretending,” while investors fruitlessly search for acquisitions.  We believe there are big opportunities in this changing landscape that have their roots in the causes of these problems.  If intelligently exploited, there is money to be made, and in the process, jobs to be created in the US.