Orgill Case Study | 13 Of all the expense categories, payroll can be one of the most critical areas to target for the CNRG team when determining a strategy for profit enhancement. Typically, the CNRG team will examine an entire range of factors that go into driving payroll expenses, including looking at number of employees, employee efficiency metrics, allocation of people to critical functions, benefit costs and more. Typically, a quick win for an acquisition like H&M is the ability to consolidate some of those payroll expenses by having a centralized human resources team to handle functions such as payroll processing, insurance, compliance and more. After the acquisition, the new West Helena operation was able to find payroll efficiencies by examining schedules, positions and functions. It is important to reiterate that some legacy programs were kept in place to ensure staff continuity and promote morale. Post-acquisition, other efficiciences were found through consolidating some payroll expenses through CNRG’s centralized human resources functions and benefit programs such as insurance, etc. Finally, the CNRG team performs a complete examination of other expenses related to operating the business to discover areas where they can create efficiency—be it through functions like centralized accounting, legal services or implementing other cost-saving measures. While each prescriptive plan varies by location and brand, CNRGuses a similar methodology tomaximize the performance of all the brands and retail locations it operates. “The areas and things we focus on might be different based on the store or stores,” Sieggreen explains. “The process of reviewing these key performance indicators and developing an improvement plan around them is really the same. The KPIs might change, and the plan is certainly unique to each situation, but the process remains the same.” When examining how to drive top-line sales at any of its brands, CNRG addresses a number of areas, including product mix, customer segments being served, niches, marketing and advertising and the tools the operation is using to sell (i.e., website, ecommerce and sales team). At the newly acquired West Helena location, the CNRG and Orgill teams identified areas where they could add product and brands to the existing offering. This involved filling out assortments where holes existed and adding product and brands where possible. They also identified areas where they could implement instore selling aids, such as additional endcaps, clipstrips and cross-merchandising opportunities. Though advertising, marketing and promotions were limited due to COVID-19, they saw the benefits to bringing this location into the Home Hardware marketing cycle once the conditions would permit. Because gross margin is often one of the primary areas where a business can enhance profitability, the CNRG team looks for areas to grow margin opportunities. This includes a review of products, pricing, item promotions, merchandising and more. CNRG also focuses on driving margin through a thorough examination of the cost side of the equation, finding ways to buy product more efficiently by maximizing buying power, and addressing areas such as landed costs, rebates and freight. Often, CNRG can achieve some efficiencies in these areas through its relationship with Orgill and by consolidating purchases and taking advantage of the promotional buying opportunities, assortments and promotions the wholesaler offers all of its customers. However, CNRG also explores all acquisition options to determine the best course for each individual operation, including buying through the warehouse, dropship or buying direct from the supplier. Top-Line Sales Gross Margin Payroll Expense Other Expenses
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