Business Turnaround
Traditional
approach is to ‘downsize’ with redundancies, focusing on simply
reducing overhead costs, reducing management layers and the workforce,
merging two sites etc. etc. Retrenching is sometimes the answer, but there
are alternatives to consider.
In
the 70’s and 80’s this worked well, but there are few businesses today
with much ’fat’ to trim. The new competitive environment demands new
approaches. Many companies are, without realising, producing products that
are actually sold at a loss. Everyone always denies this! And this is not
counting the ‘loss leaders’ or ‘the sprats to catch a mackerel’.
An
analysis of product costs and contributions is usually very useful to
identify low margin work, and determine a suitable action plan to quickly
maximise the contribution from the current product portfolio.
Opportunities for growth from current products can be identified at the
same time. Most manufacturing companies profitability is related directly
to volume, due to ever lowering margins.
Business’s
can also be focusing in the wrong cost areas, such as labour or machine
utilisation, when it is output and margin that really matters, and where
the main costs are actually in materials.
Manufacturing
companies have surprisingly similar problems and opportunities despite
widely differing markets, technologies, cultures etc., But every situation
is different, if not unique, and requires a different tailored response.
Examples
of recent Assignments
Ist tier Automotive
Supporting General Manager and management team to increase output and further enhance delivery and quality performance.
Building
Products Company – wholly owned subsidiary of PLC
Working
for CEO of PLC. Objective to turn business around, acquire complementary
business, merge or sell. Business now operates in excess of 20% ROCE from loss making situation,
following major capital investment and RSA grant. 80 jobs saved. Existing
Director coached to take over as MD.
Investment Company
- Diecasting & Metal Finishing
Supporting MD in trying to turn around a recently acquired manufacturing business involving restructuring, rationalising, cost cutting and implementing a number of capital projects to improve profitability.
Pharmaceuticals
Delivery performance significantly improved through implementation of Forecasting and Sales & Operations Planning, including the implementation of new software system