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Supply Chain Challenges and Opportunities

supply chain challenges GJMIn these unprecedented times, manufacturers and their supply chains are facing many challenges. We were reminded in recent weeks that supply chain disruptions can come out of the blue, when the giant freighter “Ever Given” got wedged in the Suez Canal for almost a week, blocking a critical trade route and halting the movement of goods. Its impact on global supply chain is still evolving. The “Ever Given” incident only compounds the massive supply chain disruption over the past year brought on by the global COVID 19 pandemic. What can manufacturers learn from these disruptions? Can your business gain a clearer understanding of your supply chain challenges so you’re better prepared for the inevitable disruptions of the future?

Gilmore Jasion Mahler, LTD (GJM) brought together a virtual panel discussion to help manufacturing businesses identify opportunities for supply chain improvement. The March 11 webinar, moderated by GJM’s Wes Beham, featured guest panelists David Cohn and Bart Huthwaite from RSM Supply Chain Services. GJM is a member of the RSM US Alliance. Also featured on the panel, with the private industry perspective: Andrew Risner, Director of Procurement and Global Supply Chain Management for Findlay-based manufacturer Rowmark.  

A Bright Note to Start

In spite of all the challenges facing manufacturers, there is reason for optimism. A survey done of attendees prior to the GJM roundtable webinar found that 74% of those surveyed were somewhat or very optimistic about the future. Survey respondents said their greatest concern over the next year is building their workforce. Their second greatest concern: uncertainty in demand and supply shortages.

Rowmark’s Andy Risner says 2020 was a challenging year as they responded to the pandemic. He says the company was already reexamining its footprint before COVID-19 to better align with customer locations. As a global distributor, he says efficient movement of goods is certainly one of Rowmark’s top priorities.

“Shipping costs increase each year and service levels are important,” he says. “So, you take that coupled with the Amazon affect; you know, people want it, and they want it in two days, and they don’t want it to come in three different shipments… We don’t want to pay for split ship, so, shipping costs are a very big part of our business and we really spent the last two years trying to get our arms around it.”  

Understand the Nature of Supply Chain Disruptions

RSM’s David Cohn says disruptions in supply chains happen on an average of 3.7 years, resulting in an average of 42% profit of its earnings before interest, taxes, depreciation, and amortization (EBITDA) over the course of ten years. Unfortunately, these disruptions are expected to become more frequent as globalized chains become more tightly linked, as well as other reasons, such as climate change.

Know the Five Enterprise Risk Categories

  • Operational Risks. This risk category includes the ability to forecast supply disruptions, labor competition and availability, and the uncertainty of demand by the consumer.
  • Financial Risks. This risk factor includes supplier costs, currency fluctuations, and even dealing with fraud. 
  • Strategic Risks. This category of risk involves the impact of competitors and the perception of vulnerabilities, and the adaptability of business models.
  • Regulatory Risks. Mitigating these risks means planning around taxation and other similar factors.
  • Unforeseeable Risks. These risks include natural disasters such as earthquakes or tornadoes, socioeconomic risks, and even war. You can add stuck barges to that list now, too.

Prioritize Value Chain Preparedness

RSM’s Bart Huthwaite says you need to be as efficient and effective as you can, while ready to react and adapt to outside forces. He says prioritizing preparedness includes these steps:

  • Analyze. Be sure to analyze the flow and efficiency of the supply chain.
  • Anticipate. Preparedness means being able to anticipate what parts of the chain are most vulnerable. It is highly recommended you use predictive analytics.
  • Plan. Be prepared to restructure the company. It is also important to note the balance needed between efficiency and risk. A costly mistake many companies make is not considering risk in the name of efficiency.
  • Execute. The final step is to execute well thought out plans. Know how much the changes will cost and the way it improves productivity.

Learn from Industry Leaders

Industry leader David Cohn of Supply Chain Services says that improving supply chain stability includes organizational alignment, or “Trying to get the right hand of the company to talk more effectively with the left hand of the company… This means all links of the chain must work together, cross functionally to align supply with demand.” This can look like anything from major company restructuring to monthly meetings.

What else should you examine to prepare for the future? Here’s what the RSM Supply Chain Services team says supply chain experts are doing to help protect businesses:

  • Network rationalization: evaluate/optimize your distribution centers
  • Demand Planning/Forecasting
  • Supply planning
  • Sourcing strategy: should you look more regional, with less reliance on Asia, for example?
  • Operational visibility: a clearer view of your inventory, capacity. Possible technology adoption to streamline these efforts
  • Inventory management: focus on the critical SKUs so you have capacity to meet demand
  • Supplier relationship management
  • Supplier/third party risk management
  • Advanced analytics
  • Simulation-scenario planning
  • “Control tower” (get a high-level view/insight into your entire supply chain)  

Our experts say that building a strategy for your business around supply chain management, with these principles as a framework, will better prepare your company for the disruptions of tomorrow.

If you have any questions or concerns, please reach out to your GJM team or contact us via our website for assistance.  

Established in 1996, Gilmore Jasion Mahler, LTD (GJM) is the largest public accounting firm in Northwest Ohio, with offices in Maumee and Findlay. Locally owned, GJM offers cloud-based accounting and provides comprehensive services including assurance, business advisory, tax, risk advisory, healthcare management and outsourced accounting. The firm’s professionals specialize in industries including construction & real estate, healthcare, manufacturing & distribution and utilities.

RSM US Alliance (www.rsmus.com/alliance) is a premier affiliation of independent accounting and consulting firms in the United States, with more than 75 members in over 38 states, the Cayman Islands and Puerto Rico. RSM US Alliance provides its members with access to resources of RSM US LLP, the leading provider of audit, tax and consulting services focused on the middle market, with more than 9,000 people in 86 offices nationwide. RSM US Alliance member firms are separate and independent businesses and legal entities that are responsible for their own acts and omissions, and each are separate and independent from RSM US LLP. Members of RSM US Alliance have access to RSM International resources through RSM US LLP but are not member firms of RSM International. For more information, call toll free 800.537.7178 or visit rsmus.com/alliance.

Resources Available for Victims of Unemployment Fraud

unemployment fraud resources GJMCases of unemployment fraud are rampant across the country, as criminals use stolen information to fraudulently file for unemployment benefits across many states, including Ohio. The explosion in fraud cases comes as many Americans impacted by the pandemic, have legitimately filed for unemployment benefits due to loss of employment or a cutback in hours. The fraudulent claims, however, are utilizing the personal information of people who have not lost their jobs and have not filed for unemployment.

In this article, we’ll tell you how to know you’re a victim, how you should report it to authorities, and what you can do to protect your personal information from identity thieves moving forward.

Red Flag: How to Know You’re a Victim

The U.S. Department of Labor says most people aren’t even aware they’re victims of unemployment identify theft until they receive a notice in the mail related to unemployment benefits they didn’t receive. The IRS form 1099-G is a tax form used to report unemployment benefits received. Your employer may also receive a notice requesting information about an unemployment claim in your name, even though you haven’t received any benefits and remain fully employed.

What Should You Do?

The U.S. Department of Labor has guidance for anyone affected by this widespread fraud. The IRS also offers good guidance.

Employee:

  1. Report the fraud to the state. The state will need to issue a corrected form 1099-G. Ohio and Michigan residents can use the links below:

Report Ohio fraud

Report Michigan fraud

  1. Tax Filing:
  • Only include income you actually received on your tax return. Don’t wait for your corrected 1099-G, if you haven’t received it. Do include legitimate unemployment benefits as income, as they are taxable.
  • If you’ve already filed your taxes, don’t file an amended return.
  • Watch for further information and guidance from the IRS.

Employer:

GJM Human Resources Manager Jeanne O’Riordon has assisted some GJM clients as they deal with unemployment benefit fraud affecting their employees. 

“As an employer I recommend you set up your online account with Ohio Department of Job and Family Services (ODJFS) and monitor your Correspondence Inbox for any notices of separation. The online account lets you see information faster than waiting to get it in the mail,” she says.

O’Riordon says as an employer you should report the ID theft online as well as the employee. It will help the state confirm that, indeed, a fraudulent claim has been filed. She says Ohio employees and employers should use this link to report fraudulent claims.

What Else Can You Do?

Check your credit. O’Riordon also suggests you place a free one-year fraud alert on your credit reports by contacting any one of the three nationwide credit reporting companies online or through their toll-free numbers. You’ll only have to make one call, as the bureau you contact must tell the other two. For further peace of mind, you can consider putting a freeze on your credit.

You can also report the fraud to the National Center for Disaster Fraud, which helps police stop future unemployment ID theft.

While it is an inconvenience, and a certainly a real concern that so much unemployment fraud is taking place, with a few steps you’ll be on your way to notifying the right authorities what happened to you, and hopefully protecting yourself from any potential future fraud.

Established in 1996, Gilmore Jasion Mahler, LTD (GJM) is the largest public accounting firm in Northwest Ohio, with offices in Maumee and Findlay. Locally owned, GJM offers cloud-based accounting and provides comprehensive services including assurance, business advisory, tax, risk advisory, healthcare management and outsourced accounting. The firm’s professionals specialize in industries including construction & real estate, healthcare, manufacturing & distribution and utilities.

Succession Planning High Level View: 2021

GJM Sucession Planning M&A activity covid pandemic“It’s never been a better time to be an owner of a business.”

That strong statement was made by Rob Quandt, Managing Director at Windjammer Capital during a GJM webinar examining the current increased activity in mergers and acquisitions, and the importance of having a succession plan. The webinar, Succession Planning High-Level View: 2021 on March 23 brought together a panel of experts to dive into the very active M&A market. The panel, moderated by GJM Transaction Advisory Partner Greg Taylor, also shared some thoughts on what it takes to have a successful succession plan for your business.

Strong M&A Market

Quandt’s statement speaks to the current climate coming out of the economic shutdown during the pandemic. The panelists agree that many businesses looking at potential sales, mergers and acquisitions before the pandemic put those plans on hold and now they’re feeling more confident moving forward. As a result, they say, there’s an explosion of M&A activity, particularly in the middle market.

Greg Taylor GJMTaylor notes that these aren’t distressed businesses either. In fact, he says, some are healthier than they’ve been in many years.

“The companies are very strong financially,” he says. “They have very strong balance sheets. That’s also the same situation for potential buyers.”

Panelist Tom Zucker, President & Founder of EdgePoint Capital agrees, describing the M&A marketplace as “incredibly hot”. He says not only are many owners interested in selling their businesses, but they’re getting premium valuations.

Why? Here are Zucker’s thoughts:

  • There’s an abundance of capital chasing too few of potential deals
  • Tax and regulatory has some scared
  • The so-called “9/11 effect”

“Similar to the time period post 9/11, today business owners are choosing to reprioritize non-business activities ahead of corporate growth and profits. We have monikered these emotionally based decisions the “9/11 effect”. This re-examination of priorities has prompted many business owners to consider selling their business,” he says.

The “911 effect” reference Zucker makes is to the COVID-19 pandemic that, like the September 11th attacks, has some people reexamining their priorities and making major life decisions, emotional decisions, like retiring or selling their businesses.

Regarding tax impact, GJM Tax Partner Charlie Heid says there’s no question that concerns about federal tax policy are driving decisions as well. Many are concerned about potential increases in capital gains tax that could hurt them on a sale further down the road.

“Tax rates that we see today are the lowest they’ve ever been, and they’re going to go up. The question is when, how, and by how much,” says Heid.

Are You Ready to Sell?

If someone walked in the door tomorrow and wanted to talk to you about buying your business, would you be ready? And what can you do so you will be ready?

Zucker says ask yourself these questions: What would you want out of a sale: to carry on your legacy? Get the highest price? Or maybe preserve and protect the corporate structure within your family? He says you need to know what you want from a sale, be very clear about that, and communicate it well.

“The hard work is really sitting down with your advisors and your family and being very clear what you want to get accomplished… and finding a good investment banker, a good attorney, a good accountant is absolutely critical in the journey.”

Quandt echoes that, saying you need to assemble the right team of experts, and be very clear about your goals.

“There’s not really a right or wrong answer for any business,” he says. “If you’re looking to stay involved in the business, great. If you want to retire, great. But if you’re upfront about it, you and your advisors can figure out which firm is going to be the right fit for what you’re trying to accomplish.”

Panelist Ian Bund, a Senior Advisor with Plymouth Growth, says their team looks for businesses at are in the growth stage and are looking for future needs and resources.

“We’re really in the business of partnering with entrepreneurs who have a growth thesis for their business and helping execute that growth thesis towards an exit, so if you’re interested in an exit in the next 6 to 12 months, it would be unlikely that we would be of much use to you, but if you had a longer horizon, and wanted to explore the possibility of your business being self-standing for a period of time, there may be a fit with what we do,” says Bund.

Timeframe for a Sale?  

Tom Zucker says the amount of time you think you need to prepare for sale, versus the length of time you actually need may be two different things. During the panel discussion he referenced an EdgePoint white paper surveying 200 privately-held busines owners who had sold. Early on, he says, those business owners thought less than a year would be enough time. Further into the process, Zucker noted, more and more business owners said a 1-3 year timeframe seemed a more reasonable expectation.

Words of Wisdom

 

Tom Zucker EdgePointTom Zucker, EdgePoint:

“Never sell a business by yourself because there are very skilled buyers out there who will see the opportunity that might not be present to you as a business owner.”

 

 

Rob Quandt Windjammer GJM Succession PlanningRob Quandt, Windjammer:

“It’s hard to underestimate the amount of data and questions you’re going to go through… you’re going to have two jobs for six months. You’re going to have your day job running the company to achieve the premium valuation, and you’re also going to be talking to multiple buyers who are going to have a lot of questions about your business.”

 

Ian Bund Plymouth Growth GJM succession planningIan Bund, Plymouth Growth:

“It’s the relationships that we make, where we’re supporting the growth cycle of a business and getting that business prepared so that ultimately it can optimize the exit value.”

 

 

Charlie Heid GJM succession planning webinarCharlie Heid, GJM:

“Make sure you are in regular discussions with your advisors, your trusted inner circle.”

 

 

If you do decide now’s the right time to sell or to buy your business, and you’re clear on exactly what you want, turn to your trusted advisors for an open and honest conversation. To learn more about GJM's transaction advisory expertise or to connect with one of our experts, simply contact GJM to begin the conversation.

Established in 1996, Gilmore Jasion Mahler, LTD (GJM) is the largest public accounting firm in Northwest Ohio, with offices in Maumee and Findlay. Locally owned, GJM offers cloud-based accounting and provides comprehensive services including assurance, business advisory, tax, risk advisory, healthcare management and outsourced accounting. The firm’s professionals specialize in industries including construction & real estate, healthcare, manufacturing & distribution and utilities

Gilmore Jasion Mahler Marks 25th Anniversary

Gilmore Jasion Mahler, LTD (GJM) celebrates its 25th Anniversary today, March 16, 2021, and will mark the milestone by doing something that comes quite naturally: giving back to others. The GJM25 Make Change community service campaign will feature 25 “good deeds” by the firm and its staff throughout the course of the year. While GJM has always been committed to community service, 2021’s initiatives will be especially mindful of increased community needs due to the impact of the pandemic on so many.

“We know there are many individuals and families in great need. Many have lost their jobs and are struggling to meet basic needs. We’ve chosen some initiatives and donation drives to support this year that will help meet some of these basic needs,” says GJM Managing Partner and co-founder Kevin Gilmore.

The firm has already identified the 25 events, fundraisers, “boots on the ground” activities, and donation drives that GJM staff will support throughout the rest of 2021. In fact, one of the firm’s donation drives is already wrapped up. GJM helped collect school supplies as part of a United Way of Greater Toledo/Leadership Toledo campaign to get notebooks, pens and other school supplies to Toledo Public Schools high schoolers as they went back to the classroom in March.

Examples of some of the other initiatives the firm will support as part of “GJM25 Make Change” include:

Children’s Mentoring Connection of Hancock County “Bowling for Kids-Plus”: GJM will host a bowling event at the GJM Findlay office in support of the organization’s major annual fundraiser “Bowling for Kids”. Children’s Mentoring Connection of Hancock County offers a mentoring program for children who are often from single parent families.  

Lucas County Pit Crew Donation Drive: GJM staff member Diane Nelson volunteers a great deal of her time for this organization, which rescues and finds loving homes for Pit Bull Terrier type dogs and community cats. The firm will hold a donation drive for the organization to collect pet food and other needed supplies.

YWCA Northwest Ohio Donation Drive: GJM staff will collect items off the YWCA Northwest Ohio Domestic Violence Shelter wish list, including diapers, food, kitchen supplies and more. The shelter offers a safe place for those escaping abuse and is open 24 hours a day, seven days a week.    

“Since day one, community service has been one of our core values at GJM,” says Assurance Partner & co-founder Adele Jasion. “We’ve always found a way to come together as a team and make a difference. I can’t imagine a more fitting initiative to mark our 25th milestone.”  

The GJM25 Make Change campaign is essentially already underway. It will run throughout the rest of 2021. You can follow the firm’s acts of kindness on the GJM blog at gjmltd.com/blog and on social media. The firm is using the hashtag #GJM25MakeChange. GJM is on Facebook. Instagram, Twitter and LinkedIn.

Gilmore Jasion Mahler was founded on March 16, 1996 and has grown from a staff of about a dozen people, to become the largest locally owned public accounting firm in the region with over 120 staff in two offices: Maumee and Findlay. GJM offers cloud-based accounting and provides comprehensive services including assurance, business advisory, tax, risk advisory, healthcare management and outsourced accounting. The Firm’s professionals specialize in industries including construction & real estate, healthcare, manufacturing & distribution and utilities.

Gilmore Jasion Mahler Names New Partners, Senior Manager

Gilmore Jasion Mahler (GJM) Managing Partner Kevin Gilmore recently announced some exciting changes in the firm’s leadership team. Jamie Dixon, CPA and Matt Hoverman, CISA have been promoted to partner and Jessica Nunn, CPA has been promoted to senior manager.

Dixon is a member of GJM’s Healthcare Specialist Team. He also took on the role as GJM’s firm administrator in 2020. He has over thirty years of experience in both private and public accounting, providing consulting services to a broad range of healthcare entities, specializing in home health and long-term care. He has been with GJM since 2013. 

 

Matt Hoverman’s expertise is in risk advisory. He has over two decades of professional services experience in systems implementation, information security, internal and external audit, risk management, compliance, and management consulting across multiple industries. Matt joined GJM in 2016 and has since built a team offering risk advisory services.

 

Jessica Nunn is a member of the firm’s Manufacturing Specialist Team. She specializes in for-profit entities and has over a decade of public accounting experience at Gilmore Jasion Mahler. She’s been responsible for tax planning, preparation, and review of tax returns, in addition to general consulting largely related to corporate and multi-state tax issues.

 

“Congratulations to Jamie, Matt and Jessica on their well-deserved promotions,” says GJM Managing Partner Kevin Gilmore. “I’d also like to thank them, and all of our staff for the incredible work they’ve done over the past year helping our clients through all of the uncertainty brought on by the pandemic. We know our clients need our guidance now, perhaps more than ever.”

The promotions were effective January 1, 2021. 

Established in 1996, Gilmore Jasion Mahler, LTD (GJM) is the largest public accounting firm in Northwest Ohio, with offices in Maumee and Findlay. Locally owned, GJM offers cloud-based accounting and provides comprehensive services including assurance, business advisory, tax, risk advisory, healthcare management and outsourced accounting. The Firm’s professionals specialize in industries including construction & real estate, healthcare, manufacturing & distribution and utilities.