Welcome Gary Levine to Fahrenheit Finance
We recently had the opportunity to add another great person to the Fahrenheit team. Gary Levine is a CPA and experienced CFO with industry experiences across healthcare, life sciences, consumer products, real estate & manufacturing. Gary has worked with fast growth companies and helped prepare companies for IPOs, M&A and strategic planning & revenue cycle management. Gary’s broad-based work also includes working with private equity, venture capital and extensive board level experience. We are not only excited about having having Gary join our team but about the opportunity his experience and knowledge brings to our clients. We hope you will take a moment to learn more about Gary below:
Colleagues and friends told me I was crazy to give up my career as a finance executive at big public companies to take a job with a small private firm. Though mindful of the potential scar that such a move could leave on my résumé, I could not resist the appeal of a meaty turnaround situation. Just as attractive was the idea of spending most of my time running the company and making a difference — formulating and executing a strategic plan, visiting plants and clients, and working on product development and acquisitions. That was five years ago, and while I am no longer at that Company, the experience I gained was certainly worth making the change.
At my first CFO position the Company had no strategic plan or even a formal budget. I credit my ability to direct the transformation to my 20 years of experience at large companies. That’s one reason why finance executives shouldn’t too-hastily dismiss similar opportunities to move down in size but up in authority. Big-public-company experience works well in smaller companies.
Much of that experience, after I started out as an internal auditor for PriceWaterhouseCoopers, came from Fortune 100 companies, including Nabisco, Pfizer and Medco, where I landed roles as finance vice president for various divisions. At these public companies though, three-quarters of my time was spent on being Sarbanes-Oxley compliant, and fighting with auditors — things that didn’t necessarily bring a lot of value to the company. What I really wanted to do was see the fruits of my labor.
Indeed, in my due diligence before accepting the job, I got the clear idea that drawing from my experiences would make the Company more valuable. Large public companies like the ones I worked for have more and often better talent from which to learn. They also have money to spend on implementing efficiency-enhancement programs such as Six Sigma and Lean Manufacturing. And they tend to have more robust business analytics and stronger internal controls. All of those things contributed to the changes at the Company. The ideas I brought to the table were just the ones I’d been running with for many years.
Getting under Control
To be sure, some of those ideas were fairly straightforward, though in some cases they produced seismic changes in the Company culture. For example, I instituted controls over capital expenditures where there had been none. The first meeting I had with the management team, one of our senior vice-presidents came up to the CEO and said, “I want to buy new equipment for $1 million, what do you think?” And the CEO says, “Sounds good, go ahead.” I was floored.
Now, an expenditure request must come along with an analysis of how there will be an adequate payback on the investment within 18 months. But I adjusted the control for the small-company environment. We don’t have 16 approvals to buy a piece equipment. We want to make a decision in hours rather than weeks.
Purchasing activities were put through the wringer as well. For instance, the company, which had been buying three months worth of supplies at a time, saved $10,000 per month by working with vendors to deliver the items closer to the time they’re needed. That means less drain on working capital.
Working capital improvement was also one of the main benefits of a drastic change in the accounting process. At the time, the books were being closed an average of 23 days after the end of a month. By mapping out the entire process through a Six Sigma approach and cutting out wasted effort, we reduced that time-frame to seven days. Having the results earlier means we can make decisions faster and understand the run rate so we can adjust inventory levels and minimize working capital.
But the biggest impact on working capital came from implementing a material-requirement-planning system like ones commonly used at bigger manufacturing companies. By using the system, executives can more easily project what the company will sell in the next 12 months and what materials it will need, and when, to enable that. Before my arrival, eight general managers around the country determined what inventory levels to carry. They could order as much as they wanted and just load up the supply room with inventory, which is the age-old way to make sure you don’t short-ship a customer. The first year the MRP system was in place, money tied up in inventory fell from a peak of $2 million to about $1.3 million. That made a big difference in banks’ leverage tests for the company.
The Big Picture
All of the savings helped drive forward the strategic plan that I pushed into being, which largely involved making acquisitions and expanding product lines. Overall, I appreciate the heavy exposure I’ve gotten at the smaller company to areas — like treasury and tax, in addition to M&A work — that Nabsico, Pfizer and Medco had huge, separate departments to handle. You talk about on-the-ground, on-the-job experience. Now I have that. It’s definitely good for the career.
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