Cobra Electronics turns up the volume on receivables

In the windblown world of the receiving dock, paperwork goes missing all the time. Stacks get shuffled. Pages stick together. Things fall behind file cabinets. Even in a “paperless” environment, getting legacy systems to talk to each other from order to counting house can be a daunting task.

But time is money, particularly in these lean times, when banks are tighter with credit and customers are stretching out payments as long as possible. And that has AR practitioners looking for ways to up their game. Cobra Electronics Corp., an international consumer electronics designer and marketer based in Chicago, undertook a significant process-improvement initiative in 2009.

Cobra, after its 60-year journey from family television-repair business to iconic international mobile-communications brand, faces many of the same problems as other evolving companies competing in the international arena:

• Complex sales orders.
• A long-disjointed paper-based chain of order/delivery information.
• A fractured payment application process.
• Increased customer inquiries/disputes/exceptions.

Cobra’s objectives were to contain costs, optimize cash flow, and mitigate risk by:

• Reducing costs associated with manual, non-standard processes and exceptions.
• Supporting corporate finance’s need to unlock cash flows.
• Providing an enhanced customer experience.
• Providing better controls and compliance.

Over the years, Cobra has seen its share of changes. Carl Korn founded Central Television Service Co. in 1948 to provide repair service for the fledgling television industry. The industry expanded so quickly that service equipment soon became outdated. So Korn and company began designing, producing, and marketing its own equipment, and B&K Electronics was born.

The 1950s and early ’60s were years of consolidation in the electronics business. B&K and several other small companies joined forces to form Dynascan Corp. In 1963, Dynascan engineers developed the world’s first citizens band (CB) radio, the Sidewinder, which was followed soon after by the Cobra. With widespread acceptance of CBs in the marketplace, the Cobra name caught on with consumers and eventually evolved into the symbol and brand name for this signature product.

The early ’80s were boom years, with the introduction of cordless telephones and radar detectors, and Cobra cultivated a reputation for technical innovation. By 1987, the company had focused exclusively on consumer electronics. In 1993 the company took the name of its flagship brand, traded on the NASDAQ under the symbol COBR.

In January 1998, James R. Bazet was named president and chief executive officer, and by 2000 Cobra was the top performer in the CB radio, radar detection, and two-way radio categories.

Bazet and the executive team focused on Cobra's global presence. In 2003, in addition to maintaining a leadership role in its core categories, Cobra entered two new growth categories: marine electronics and mobile navigation. Today, Cobra's products can be found in more than 40,000 storefronts in North America and a growing number of retailers throughout the world.

In 2009, like many consumer products companies, Cobra’s treasury department faced the twin challenges of looming staff cuts and decelerating cash flow. Tasked with having to do more with less, Sandy Maxey, senior director of treasury operations, launched a process-improvement initiative.

“Departments were making copies of purchase orders and other documents before turning them over for scanning because they felt it was faster and easier to keep their own set than to use the old system for retrieval,” Maxey said. “This was going on in multiple areas. The system was not user-friendly.”

Cobra had installed an SAP enterprise resource planning system in 2005, but it continued to maintain a homegrown legacy retrieval system that required treasury staff to hunt for the documents they needed, print them, and scan them back in to attach them to an e-mail.

The system, less than ideal to begin with, became even more cumbersome when treasury staff was cut from nine employees to seven.

Cobra contracted with Dolphin Enterprise Solutions to optimize its information systems. Dolphin helped integrate the order/delivery cycle from sales order through delivery and post-delivery sales/service analytics.

Dolphin’s technical staff followed each of Cobra’s vital documents through the standard operating procedure and developed a blueprint for process improvement.

Maxey said this preplanning not only helped Dolphin become familiar with Cobra’s system, it helped get buy-in from her staff. “We spent a whole day up front going through every document so there were no surprises along the way.”

That careful planning helped speed the project along. Total implementation, from start to finish: 37 days.

In one of the first improvements, exception tracking – once a tedious manual process that took an average of three days – was reduced to a matter of minutes. This critical reduction in time on task allowed Maxey’s department to maintain high service levels despite the loss of two full-time accounts receivable positions.

Maxey characterized the project as a home run.

“It allowed us to reduce the amount of time spent scanning and indexing our order-to-cash documentation from 35 to 40 hours per week, down to five to 10 hours per week,” she said. “The time saved allowed us to maintain our collection procedures without incurring overtime expenses, despite the reduction in staff.”

Other benefits:

• The increased availability of optically scanned data at the desktop and ease of documentation retrieval have reduced printing and paper consumption, which makes Cobra a greener organization.
• Improved document retrieval capabilities allow users from all over the organization to access appropriate documentation at their desktops, reducing the need for costly copies and offsite document retention and storage.

With the newly optimized system in place, Cobra treasury staff can now deal with customer inquiries in real time, often while the customer is still on the phone.


Brad Kuhn is an award-winning financial reporter, author, editor, poet, publisher, media consultant and professional speechwriter. He has been a staff writer for The Wall Street Journal, Orlando Sentinel, and Orlando Business Journal and his work has appeared in numerous national publications, including Southpoint magazine and American Banker. His first book, I Hate My Banker, was serialized in the Journal of Lending and Credit Risk Management.He is managing partner of Shady Lane Press and a founding director of The Jack Kerouac Writers In Residence Project of Orlando.