2014 User Group Meeting – Maumee Bay Lodge and Convention Center Presented by: John Underwood Mark Sweetman, CFO SA Recycling

Over the last 20 years we have been approached by numerous clients to assist or advise them on what we believe to be the best practices or procedures covering a wide range of their business processes. In some cases these requests have led to invitations to sit on clients “best practices” or fraud detection and prevention committee’s. Historically this type of consulting has only been provided when initiated by a client. Because of this we thought we would provide the User Group a high level overview of some of the typical topics and processes that we address including;

Fraud prevention and detection; policies, procedures and reporting Review of the most commonly utilized of key reports supporting internal procedures Consolidated multi-environment reporting for organizations with two or more CRES environments Daily inventory balancing policies, procedures and reporting Inventory Production, methods, policies, procedures and management reporting Two examples of how we have assisted clients with creating solutions to meet their best practices requirements SA Recycling has been one of our most progressive clients in regards to designing and implementing system solutions to support their goals. For that reason I have ask Mark Sweetman to be available to answer questions and add his prospective as to the challenges and benefits in creating a “Best Practices” culture.

Most of these applications are utilized in the day to day operations by many of our clients. These reports support or are part of their “Best Practices” requirements. Fiscal Margin Analysis, includes transactions detail, month end margin projections, estimated current month operating and G & A costs and actual operating and G&A costs for closed months Web daily “ Flash” Financial Statements with multiple drill downs to transactional data. The CRES system performs an automatic close of the system nightly. The information from this close is stored in a temporary financial data table which provides the ability to generate flash financial statements. Commercial Position Analysis, provides a current and user defined future inventory position by inventory type or specific grade. This is an interactive report that allows designated users to view and edit both scheduled and requested sales transactions. A review of the Booking / Scheduling modules is helpful to understand this process

Scheduled Position, provides a yard or regional manager with a specific view of their inventory position based on their material requisition requirements, scheduled and requested sales shipments. If the user is authorized, this is an interactive report that allows the user to edit quantities on both the released and requested shipments. Release Calendar, is designed to view scheduled transactions in a number of ways and for various reasons. This application may be utilized by a trader to quickly see what material and from what locations transactions are scheduled to be shipped to a specific consumer. An internal traffic department can use it to visually determine which scheduled transactions have been scheduled with a carrier and which have not. A yard manager may use this view to plan activities within their location. Inventory Analysis, provides a daily perpetual inventory based on close of business the previous day with drill down to all transaction data Un-updated Inventory Analysis including today’s un-updated transactions and any additional transactions from previous days not yet updated.

Production Analysis, provides a simple high level view of consolidated production activity, by production location, type (shredder, baler etc...) by day for any given month. It is designed to monitor volumes and frequency production data is entered into the system. It also provides drill down capabilities to specific production records including input / output / waste volumes and costs. Purchase Analysis, provides multiple methods to analyze all purchase transactions for a specified date range. Purchase Profitability, optional analytical tool used to determine the estimated profits generated from purchases by a Buyer, Supplier, Inventory grade and location. In some cases this information is used as the basis for compensation to buyers. Sales Analysis, provides multiple methods to analyze sales transactions for a specified date range

Ticket Audit Exceptions, reports transactions that require review for a defined condition. Provides an optional electronic sign off for designated personal and is often used by our clients as a key internal audit tool. It also can provide the basis for fraud detection / prevention. Many public clients incorporate this report as part of their Sarbanes-Oxley compliance documentation Scoreboard Activity, is primarily utilized to provide real-time summarized views of incoming material tonnages and landed costs. One of the key capabilities is to stratify current purchase costs for the purpose of isolating buys that are out of range and determining which buyers and suppliers make up these transactions. Order Management, is the primary report utilized to analyze Purchase, Sales, Material requisitions and Broker order positions. Order positions can be viewed in multiple ways, by supplier/customer, location, inventory grade and buyer and trader. Margin by order is also available for Sales Orders. Drill down to the underlying transactional data is also standard throughout this application. If authorized, traders can also close completed orders in this application

Settlement Analysis, is an analytical tool developed to assist the user in understanding how nonferrous transactions were settled. It has several unique capabilities that easy reports on the settlement details for multiple material loads. While designed for complex nonferrous transactions, Settlement Analysis can also be utilized to analyze ferrous material loads. Buyer Work Bench, offers robust capabilities assisting a Buyer in managing the many activities required in today’s competitive market. Upon logging into the application, the Buyer is presented a summary dashboard of their supplier’s current and projected transactional data. It also compares current month to date activity as compared to last month’s month to date transactions for volumes and landed costs. The Buyer is then presented with a number of analytical tools they can use to further analyze their suppliers in total. These capabilities include determining critical information such as which suppliers are delivering less frequently and what this represents in volume. Analyzing and ranking suppliers estimated profit contribution by material provides powerful insight when negotiating future pricing.

The challenges: Today many recyclers have come to the realization that the days of judging a suppliers by simply looking at the amount of material they bring in are over. Todays stiff competition and slim margins require a more in depth analysis to determine the true value they bring to the recycler and to price their material accordingly. Understanding that the price you paid a supplier per LB including freight costs does not always reflect the total cost of their material to your organization. As an example organizations utilizing feeder yards incur additional handling and freight costs to move these materials to their processing locations. And once they arrive further processing is required resulting in additional costs per LB. Depending on the process required to convert the material into a saleable form, yield or weight losses also increase the landed cost for this material. When the processing creates more then one output material associating the original material purchased with the sales value of the items produced becomes even more challenging.

The Solution: Creating an analytical report that takes into account these complexities. One time set-up requirements: Creating a manageable way to enter and maintain the anticipated additional cost per LB to transport to any purchased material to the yard where it most likely will be processed Creating a manageable way to enter and maintain the anticipated cost per LB required to process this material including a calculation for possible weight loss and value of the material output. Creating a manageable way to enter and maintain a cross reference to a sales inventory code so that a estimated sales value can be associated the original item purchased.

The challenges: Provide yard managers with timely, accurate, actionable information. To empower them to act on this information to better manage their sites and return higher profits To set realistic monthly goals and fairly measure actual results Possibly create a compensation plan based on this information To create an automated reporting capability that clearly and accurately summarizes the key matrixes that yard managers are measured upon. To create a management or executive view of this report to allow management to oversee and manage this process across the enterprise.

To successfully implement change management must not only be aware, but openly supportive of the new policies or procedures. Their understanding and buy-in and on-going support is critical. In every organization change is often met with resistance. Management must be willing and able to engage with staff to explain why it is important they comply with the new procedures. Without this support attempting to implement change will often fail. Once implemented the process should be re-evaluated. If needed adjustments or medications should be made.

Defining a vison and a specific a list of goals that you wish to accomplish is where to start. Forming a small committee representing a cross section of your business is one of the best ways to begin this process. Brady is always available to participate in this process. In this presentation we will give some examples of how some of your peers manage different aspects of their business utilizing some the systems capabilities in CRES. When comparing how companies accomplish the same or similar tasks it may appear that one method is superior to another. Sometimes finding a better mouse trap is as simple as that. However every organization is different so some “best practices” may not be as beneficial for another company. One size does not always fit all. We will review two examples of the processes and results

The term “best practices” to us means utilizing the best processes and procedures to most efficiently support a business’s goals. They can be can related to an unlimited number of business scenarios. They can included physical processes, procedures, policies and reporting requirements. When companies engage in implementing “best practices” where to start and setting realistic goals is important. A common mistake is to attempt to implement too many changes at once. Only considering the anticipated benefits to be gained is another pitfall. It is critical before that any new procedures analyzed to insure they are practical for staff to perform.