Case Study – Operational Audit
   

The company  is a Dutch enterprise active in the precious metal coating business.


The Challenge:

In 2006, the company established its WFOE and manufacturing facility in China. The WFOE was operated independently with limited supervision from its headquarters.  After more than seven years of operation, the company  asked for an operational audit to know its WFOE’s performance, especially in finance and operational risk control fields.


Findings:

The investigation was conducted by PTL’s audit team which consists of specialists from admin, HR, logistics, trading and finance. The following critical facts and risks have been revealed:

  • Cash flow problems: The cash reserve did not match the increase in sales. The lack of cash flow and existing large loans damaged the company profits and were very risky. Lots of capital was tied up in accounts receivable and stocks. This put high pressure on the company to ensure sufficient cash flow available for running the daily operations.
  • Legal risk on contract management: There were many flaws in the plant lease as well as in the logistics, sales, insurance and labor contracts.
  • Other internal control risks: The company did not have  any documentation of internal workflows , the financial supervision function was lacking, there was no practical methodology for metal sourcing, management and disposal, or recycling - all of which needed to be improved.

Results:

The company  understood these problems would jeopardize the company’s sustainable development dramatically and took suggestions from PTL’s audit team on organization restructuring, process definition and documentation, a financial approval system, supervision and quality management improvement, as well as setting up  certain internal control mechanisms.

 
 Case Study – Setting Up an Assembly Factory
 
   

Pep Filters Inc., a subsidiary of Arkal Filtration systems, is a manufacturer of industrial water filtration systems with over 30 years of experience and sales worldwide. 


The Challenge:

In 2005, PEP Filters started to sell a product through a Singaporean distributor.  The product was manufactured in the USA, faced strong competition in the Chinese market and there weregreat distribution difficulties throughout Asia because of a long lead-time, no technological advantages, lack of control and the high price.


Solution:

With PTL’s support, the following changes were implemented: 

  • Establishment of assembly operations in China within 3 months
  • Gradually moving sourcing to local suppliers
  • Starting direct sales in China

Additionally, PTL Group took responsibility for bonded and front warehousing, financial planning, site operations management, establishment of legal entities, invoicing & collection facilitation, insurance, and ERP.


Results:

Significant cost reduction in bill of materials and lead-time and while the global cost was reduced, the penetration rate in China improved significantly. These results were reached with one foreign engineer, one local engineer, two temporary assembly workers, and one sales manager. The PTL team managed all support operations for Pep Filters.

 
 Case Study – Building a Sales Structure for a Service Company
 
 

JOHN BRYCE TRAINING, a Matrix Group company, is an industry leader in combining traditional IT training methods with cutting-edge technologies.  John Bryce Training provides training solutions for leading international software and hardware vendors including EMC, Vmwre, Intel, HP, CA, Alcatel, China mobile R&D, NEC, Sony, Adobe, Autodesk, and others.

 

The Challenge:

Establishing the initial sales structure and training facilities for John Bryce Training in the new Chinese market, in a new industry unfamiliar in China.

 

PTL Group’s Role:

In 2007 John Bryce Training entered the market using PTL Group’s infrastructure.  PTL recruited the GM, the sales team and the first trainers, provided a shared office space in Shanghai and Beijing, as well as classrooms for the training sessions.

 

John Bryce Training’s GM and sales team could focus more on the business development while PTL team managed their facilities, handled HR and financial aspects. When the sales team managed to sell a course to a local customer, PTL would sign a service agreement with the customer, collect the payment for the course and issue a VAT invoice.

Later, PTL’s marketing team provided marketing support for a period of 2 years to lay the fundamental of the company marketing and database. 

 

Results:

John Bryce Training focused on the key functions of their business while PTL Group provided the infrastructure. The cooperation also allowed John Bryce Training to reduce many of their HR and commercial risks.

 
 Case Study – Storage and Distribution for an Established WFOE
 
 

The company  is a reputable leader in security technology providing advanced integrated security solutions.


The Challenge:

As a Rep. Office, the company could not sell locally in China and needed a reliable partner to execute the entire logistics process for them. Still years later as a WFOE, the company needed a reliable logistics partner. The company  faced enormous difficulties regarding the import of their goods into China.

 

Solution:

PTL Group was able to use its experience and relationships to import the company's goods  - despite strict restrictions for this line of products - store the goods in PTL’s warehouse in Shanghai, sign sales contracts with local clients, collect payments from clients, issue local VAT invoices, and transfer the money back to the company's HQ.

 

Even later, after establishing its own WFOE, the company  kept using PTL’s warehousing and distribution service, in bonded and non-bonded warehouses to manage their stock while this time using the company's  WFOE as the importer and the seller of the goods.

 

Results:

Using PTL services, the company's  team in China was able to grow their sales significantly due to the important competitive advantage gained by the shorter lead time and the ability to sell products in the local currency. The company benefited from the full transparency in controlling the supply chain from the home country all the way to the end user.

 

This allowed them to grow big enough to justify the set up of a WFOE. At the same time, they kept the services that PTL provided in order to allow them  to focus on their core business.

 
 Case Study – Incubation Solutions for Factories (CI3)
 
  The company  specializes in custom liquid cooling solutions and needed manufacturing solutions in China 

 

The Challenge:

The company  had already been selling its products for a few years in China through a sales representative, and was one of the main suppliers for a large company in China.  This company requested them to start manufacturing locally in order to be able to reduce the manufacturing costs.

 

Solution:

PTL Group as a partner in the Changzhou Industrial Incubation Initiative (CI3) offered the company a space of 1,000 sqm in the incubator building (13,000 sqm) and managed the entire process of setting up the assembly plant. 

 

Results:

After the space was ready, the PTL/CI3 team assisted the company  with recruiting the major positions of their production line, the GM and QC managers, as well as with managing the entire process of obtaining the production licenses and the GE certification.

 

PTL Group also helped the company  with local purchases, the installation of the required machinery and the importing of components, tools and machinery, while managing all HR, financial and logistics issues.

 
 Case Study – From Sales and Distribution to Factory Incubation Solutions
 
  The company  is an enterprise from Israel specialized in manufacturing and supplying sterilization and infection control products to hospitals, universities, research institutes, clinics and laboratories throughout the world.

 

The Challenge:

Since the 1990s, the company  had been selling its products in China through a distributor, but in order to penetrate the Chinese market, in 2008, the company  started selling directly in China by hiring a Sales Manager recruited and hosted by PTL Group. After facing some difficulties in distributing their products, the Sales Manager assessed that the competitors were manufacturing directly in China and therefore were able to sell their products at a much cheaper price. Moreover, the company's import licenses had to be renewed but the renewal of the CFAD license, which is needed for imports, had been rejected. 

 

Solution:

PTL dedicated a space for the company's factory in its incubation facilities (1000sqm). PTL managed the entire process of set up, import of machinery, installations and the company’s WFOE registration so they could apply for all the licenses required.

 

Results:

PTL was able to assist the company  in obtaining its CFDA license and all other necessary licenses required for manufacturing and selling its products.

The factory moved quickly into full production and is now selling one container after another, having overcome the regulatory obstacles and being finally able to cope with the local competition.

 
 Case Study – Financial Audit, Financial Management and Liquidation #1
 
   AVT McCormick is a JV between A.V. Thomas Group and McCormick USA, one of the largest and oldest spice companies in the world, and is a global leader in the manufacturing, marketing and distribution of flavors, spices and seasoning for the entire food industry.   

The Challenge:

AVT had established a subsidiary in Northern China to enjoy tax benefits that this area had offered. Over the years, it seemed that the company suffered some financial difficulties regarding these tax benefits.



Solution:

PTL sent a financial expert to conduct a complete financial audit to map out the entire financial and tax situation of the company and to review alternative options. 

 

Results:

The audit results clearly showed that there was no financial justification to keep the company in that location and it would be better off to shut down operations there and seek a better place.
PTL’s financial experts took over the management of the financial processes of AVT for the following months in order to perform the liquidation of the company in the most efficient, legal and reasonable way possible.

PTL was able to clear all the accounts payable and accounts receivable issues, close bank loans, submit employee termination plans,  clear all tax issues, and finally, wind up the company to release AVT from its liabilities in China without any complications.

 
 Case Study – Procurement
 

 
The company  is a British global leader in bulk, value-added nutrients for use in the dietary supplement and functional food and beverage industry. The company's product portfolio includes natural carotenoids, such as lycopene, lutein and beta-carotene; vitamins and minerals; amino acids; and other functional ingredients. 


The Challenge:

After PTL had managed the company’s factory setup in China , the company  needed a purchasing professional to buy the vitamins required for production. At the same time the parent company who up until then had already had a purchasing employee in China, was suddenly notified that this person had resigned.

Solution:

One of PTL’s employees fulfilled the purchasing management tasks for the company. The work required in-depth knowledge of the chemical industry, which the PTL manager acquired with the support of PTL’s logistics and administrative teams.

 

Results:

PTL’s dedicated manager became an expert in purchasing the ingredients required for the entire group and continued to do so for the next few years. Very quickly the manager became completely occupied with the purchasing needs of the company , and as a result, PTL, the manager and the company  decided that it would make sense for the manager to become an employee of the company.