Restructuring Archive

How to prepare for crisis

There is no company that did not face or survived a time of crisis. Of course, there are many specialists to turn around a crisis, but wouldn’t you rather want to prevent the situation from turning into a crisis in the first place? You want to know how? https://www.female-executive-search.com/meet-our-women-leaders/short-bio/?cntc_id=58934#video

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How do you successfully implement change?

Talking about change, most managers talk about the process. But there is another element, claims Neil, a renowned top manager and change specialist. An element that is often neglected, but vital to succeed. How do you successfully implement change?

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Family Business in Latin America: A Protocol for Succession

Of the world’s 500 largest family businesses, 32 (7,6%) are located in Latin America according to the 2016 Global Family Business Index.

Over 70% of these businesses are publicly listed companies with average 78 years old.

On the other hand, Latin America and the Caribbean Region (LACAR) are home to upwards 57 million small-and-medium-sized enterprises (SMEs) with fewer than 100 employees.  These companies account for over half of the region´s net job creation.

Nevertheless, SME´s in LACAR are far less competitive than their counterparts in wealthier countries and have enormous untapped potential. Continue reading

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Busines Turnaround Case Study

Manufacturing Company Turnaround

The Challenge:

  • Business was unprofitable, cash negative and losing customers. Management in conflict & demoralised.
  • Customers were very unhappy and were reducing orders and changing suppliers.
  • The manufacturing process consisted of extrusion and thermoforming, i.e. a linked batch operation.
  • Disorganised and dirty factory that had been put on notice by BRC to improve in 6 months. Poor delivery lead time, weak safety, bad maintenance.
  • Order lead time was very long and OTIF very Management had therefore decided to make trays to a forecast and this had exacerbated the problem further and driven up WIP and FG. WIP and FG stocks were in excess of 6 months.
  • Stock counts were uncontrolled and not carried out regularly at month end.
  • Although cash was very tight there was no effective cash forecast regime in place.
  • There was an inadequate sales plan in place which was subsumed by the need to constantly deal with customer crises related to late delivery and quality problems. There was excessive dependence on two customers.
  • Customers in UK, Ireland and Benelux.

 Productivity = Profitability.
 Develop your team and plan.
 Engage, energise & empower your people.

The Solution:

  • Reduced headcount from 138 to 65, dismissed all directors and two managers and in the process eliminated two layers of management.
  • Developed management team & strategic plan & implemented Lean. Reviewed sales & production through value stream analysis & drove integration of these functions.
  • Changed ‘make to forecast’ to ‘make to order’. Reduced FG stock to 10 days & WIP to 5 days, eliminating a 3000 sqm store. Cut order delivery time to 24hrs on identified lines.
  • Set up shop floor data collection and installed IT that provided real time performance measurement on 2 extruders & 8 thermoformers. Measured Availability, Speed, Quality & OEE reviewed by shift. Implemented asset care system. Improved availability & developed planned maintenance.
  • Integrated the order entry and production planning processes, drastically improving service speed, flexibility, order turn around. OTIF 99%.
  • This process together with Kaizens energised the shop floor and forged strong (e.g. T/F tool change cut from 4 hrs to 2 hrs then 15-30 mins).
  • Reorganised management & segregation of rework and reduced bad waste to <0.1%.
  • Implemented safety improvement plan with monthly meetings. Guarding, ASIs, Risk assessments, changed material flow, implemented safe WIP roll handling. Removed FLTs from production aeras.
  • Reduced NPD lead times from months to 4 weeks through key alliance with tool maker.
  • Worked closely with sales team & key customers. Weekly reviews of existing customers and new business development.
  • Established detailed monthly financial reporting & 12 month rolling cash flow updated daily.

Results:

  • Reduced breakeven from £13m to £7m, brought company to profit in 12 months, reduced stock by 80% in 8 months. Improved OEE by 73% in 18 months.
  • Cash positive in 18 months.
  • Direct labour reduced from £2.4m to £1m pa, material cost decreased by 22% in 12 months.
  • Reduced low margin business, grew sales profitably to £9m in 2 years.

Written by    Written by Mike Stewart, BSc Chem Eng, MBA

Strong practical experience at MD level. International experience includes being ‘parachuted in’ on a number of occasions to turn around troubled companies, as well as entering new markets and growing businesses.

Led 3 turnarounds in 7 years at £40 -£60 m pa businesses (330-500 people). All were complex multi site manufacturing businesses with very demanding JIT customer service requirements. Continue reading

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How to let an Interim Manager do “the job” or “a great job”?

The background of this article are two French firms in trouble, with around one hundred employees and twenty million in revenue each. These two manufacturers of industrial equipment are subsidiaries of two international Groups of about 1,000 employees and € 200 million in revenue. Each local company suddenly loses his top manager, for different reasons, but that lead the Groups in both cases to assign an Executive Interim Manager. This aims to take control of the French subsidiary to drive organizational change and allow time to set up a sustainable solution for the management of the company. This is not a fiction, both cases were experienced by the same Interim Manager 1 year apart. Continue reading

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Interim Manager, COO – Switzerland

Worldwide Restructuring – Global Health & Beauty and Food Retailer

Successful transformation from 36 individual companies into one group (for a global retailer health-beauty & food) International turnaround & market expansion (for functional food company).
Major achievement: Our interim manager was worldwide responsible for annual spend € 3.7 bln across 36 markets. Delivered incremental annual income € 43 mln (+2% of net invoice value). Delivered savings of € 27 mln (5-7%/year). Launched new ranges/brands across Europe and Asia. Top Executive, interim management and international consulting expert in FMCG industry. Continue reading

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