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6|January 2020 Slippery rock Gazette
Training & Education
Toolbox Talks for Quarriers Available in Natural Stone University
The Natural Stone Institute, in coordina- tion with the National Building Granite Quarries Association (NBGQA), has added three toolbox talks for quarriers to the Natural Stone University. Topics include the following:
• Fall Arrest System Regulations
• Highwall Management and Use of Drones
• Quarry Slab Tipping Safety
There are now a total of 27 quarry-specific toolbox talks available in the University, cov- ering topics ranging from per- sonal health and human safety to the safe use of equipment such as wire saws and preventing silicosis.
Mike Loflin, Industry Research & Information Manager for the Natural Stone Institute commented: “These quarry-specific resources are an important addition to our library of safety resources. The infor- mation provided is the cumula- tive work of the NBGQA safety committee. The NBGQA safety committee consists of some of the most talented safety offi- cers, operations managers, and human resources professionals in the natural stone industry. Over the last several years, the committee has identified issues and provided seriously needed safety solutions for the quarry sector of the dimension stone industry. We are proud to part- ner with NBGQA to present these resources free of charge to the industry through the Natural Stone University.”
To access these toolbox talks and other educational resources, visit www.uofstone.org. To learn more about the National Building Granite Quarries Association, visit www.nbgqa. com.
The Natural Stone Institute is a trade association representing
every aspect of the natural stone industry. The current membership exceeds 2,000 members in over 50 nations. The association offers a wide array of technical and train- ing resources, professional devel- opment opportunities, regulatory advocacy, and networking events. Two prominent publications—the Dimension Stone Design Manual and Building Stone magazine — raise awareness within the natural stone industry and in the design community for best practices and uses of natural stone. Learn more at www.naturalstoneinstitute.org.
The National Building Granite Quarries Association (NBGQA) was founded over a century ago with approximately 12 original member granite companies which included most of the major build- ing granite quarriers in the United States at that time. The purpose of the organization was back then, and remains today, the promotion of the use of granite in buildings and educating architects and gen- eral contractors about the proper- ties and extraordinary durability of granite. In connection with this promotion, NBGQA provides listings of the available colors of granite, surface finishes, toler- ances, test data and other specifi- cations for owners, architects and contractors covering the proper use and incorporation of gran- ite into building projects. In re- cent years, the promotion of safe quarrying methods and consistent regulation has also become a top priority within the organization’s member firms.
Making Money
EBITDA = Net Income + Interest + Taxes + Depreciation
+ Amortization
Return on Sales (ROS) is a relative measure. If your annual profit was a million dollars on twenty million in sales, that is a 5% ROS, which is not very good. If your annual profit was a million dollars on ten million in sales, that is a 10% ROS, which is not bad. In fact, the general rule of thumb for an entrepreneurial (privately owned) company, is that it should earn at least a 10% ROS every year. Monthly fluctuations are expected, but the annual EBIDTA profit should exceed a 10% return every year. A properly managed business with a strong market can realize 15% or more.
By the way, Walmart, the world’s largest retailer and not a privately-owned company, had net income last year of $6.7 bil- lion on $514 billion in sales. That is only a 1.3% ROS. But, $6.7 billion in profits is not bad either. Public companies, like Walmart, commonly earn less as a relative measure than do privately owned companies.
Cash Flow is a survival mea- sure. The age-old adage is, “if you have positive cash flow, it is not important. If you do not have positive cash flow, nothing else is important.” Cash flow is import- ant because it determines your ability to pay for things that make your business run: expenses like payroll, raw material purchases, rent and other operating expenses.
Please turn to page 9
IF
you should. If it has been more than a year since you read it, you should read it again. This is one of the best books on business management ever printed. It is written as a novel and tells the story of Alex, who is the man- ager of a manufacturing plant. Alex and his Team have every problem you can imagine. Their lead times are way too long, quality is poor and employee morale is terrible. Customers are constantly complaining. As a re- sult of all this, they live in chaos every day. It was not a pleasant place to work for anyone.
The product made at Alex’s plant was never identified, be- cause it really doesn’t matter. The concepts described in the book are applicable to any prod- uct in any industry.
Early in the book, Alex runs into an old college professor, Jonah, who asks him a basic question: What is the goal of your company? Alex rattles off a long list of things including customer satisfaction, quality of product, shorter lead times, improved employee morale and less chaos. “Very good” said Jonah, “but if you are not making money, none of that matters.”
Jonah was right. Even with perfect quality, excellent cus- tomer satisfaction, great em- ployee morale and seamless control of the product flow, if you aren’t making enough money to justify your existence, you cannot stay in business. That is a fact of life.
There are three important bottom-line metrics to consider in your analysis of financial performance:
Net profit is an absolute mea- sure. If your total income ex- ceeds your total expenses, you made a profit. If not, you lost money. You probably track this information monthly, but it is important to look at multiple months to see the effects of sea- sonal trends and other anomalies that can make a single month
you haven’t read The
Ed Hill
Synchronous Solutions
look unusually good or unusu- ally bad. Another factor affecting a single month is material pur- chases. You could buy raw mate- rial in one month that may not be turned into finished products for several months later. Looking at trends over multiple months will minimize this potential issue.
Another factor that could affect a single month’s performance is production for the commercial market, which typically has a much longer process time from sale to completion. This is a good market to serve and can be very lucrative, but it does require “deep pockets” to withstand the longer time period for realization of income.
A variation of the Net Profit metric is EBIDTA, which is earnings before interest, depre- ciation, taxes and amortization. Essentially, it’s a way to evaluate a company’s performance with- out having to factor in financing, accounting or tax decisions. It negates the cost of capital invest- ments like property, plant, and equipment and isolates the opera- tional performance of the business enterprise.
Goal by Dr. Eli Goldratt,
“There is no finish line.”
Dr. Eli Goldratt, 1986