Due Diligence Tools

Due Diligence Obligation Structure

Link Between Operation / Finance / Corporate

Valued Added

Generally I spend most of the days checking through daily / weekly / quarterly reports. But does this really add value to the organization? Maybe yes and maybe no but I think this are controllers that need to be in place in the organization to keep it going.

Quality and Warranty Impact

Allot of time business don’t realize they have quality issue until they see P&L impact related to quality. Business needs to start early and understand from start of the process how to mitigate the quality issue. In most of the case business does not measure rework and material damage during the first time process.

My advice – Implement a system and start investigating to the root cause why the rework and material damage happen during first time process. Implement a fix, by this overall quality can be improved.

Why do you think that us employment number is not improving even when share price and earning are improving?

For me I think it is because of this few reason:-
- Only the big companies are having better earnings and this is done through productivity improvement. This will reduce the cost but will not grow revenue.
- In 2008 and 2009 allot of company has done restructuring, this is one time cost. In 2010 companies will not have this cost and will have better earning comparison versus prior year
- Big company consolidate their financials from all around the world. 3 world company like China, India, SEA and Latin America is growing at faster rate then US – this mean all the revenue growth is coming outside of US

Sharing with Employees

How much do managers spend their time teaching and growing their employees? For me this is very important process because when my employee grows they improve on their performance and eventually it saves your time. First flow down of business strategy is important but this does not stop here. Manager need to continue weekly flow down of company performance, operating metrics and team activity. Also manager needs to continue teaching and training employees on new business process, policy and thing that will help them to grow

This time around managers need to perform employee performance review. Why and what do you think this is important? For me it about being honest and telling your employees want you fell. What I mean employee should not wait till this moment to know if he/she has performance well for last year. This process should be more of want he/she should grow this year and what he/she should focus on this year. And if he/she did not performance as per your expectation last year this is time to understand if he/she is the right person for the role.

My take if you think he/she is not right person then it is best to tell him/her to leave the company. This will safe your time and his/her time and do something better that is more value added.

GST

Allot of people think GST is not right solution to Malaysia. I think if country likes Thailand, Philippines and Indonesia already implemented VAT, Malaysia also should move forward and be in same playing ground. I personally fell allot of Malaysia are wasting resources. GST is a good process to stop this wastage, as consumers will be more concern to buy 2 unit of the same thing. I also think GST will eliminate fraud where currently happening. Shop is charging service tax, government tax and other tax, which they are not paying back to IRB and other relevant department.

Important of PO

I always have issue with my customer service department because they accept a job without customer purchase order. Most of the time this happen for small job and unscheduled job requested by customer. Then when the job is completed finance not able to issue the invoice, company cash is tied to WIP.

My takeIt is very important to monitor WIP aging and make sure you review line-by-line item. Haying a WIP balance that is not billable to customer will cause issue to profit & loss later.