Chief Operating Officer
Select one of the case studies below:
Cost Reduction & Efficiency Programme – Automotive Supply
Ireland
Irish manufacturing subsidiary of German parent producing electric motors (starters, rotors, plastic parts) amounting to 2m accessories per year; the sale of the end product is seasonal. The break-even point for the factory lies at 90% capacity. Three separate unions operated within the company (maintenance, mechanics, and staff) & are each following different goals and hindering the change process.
An Interim COO was hired to review and implement changes in working practices in the factory in order to reduce breakeven point by min. 50%, deal with the intractable HR issues and reduce inventory given the fluctuating demand in market demand.
Procurement and production processes were exhaustively analysed and documented (semi-skilled workers made up 70 percent of the workforce). Machinery utilisation was optimized requiring a comprehensive agreement with the maintenance union to ensure 24/7 availability. Then after intensive negotiations, the three unions were reduced to one operating on site.
Machinery operating time was thereby increased by 55% as workers were able to make small repairs and reduce down-time. A bonus system was introduced for the workforce based on improvements in returned defective goods.
Overheads in the factory were reduced by 30 percent.
Break-even reduced to 46 percent capacity
Profitability increased by 50 percent
Seasonal fluctuations were absorbed through flexible shifts
Reduced inventory levels were maintained
The original assignment budget for the interim manager was exceeded by one month.
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Sports Manufacturing
A private equity stakeholder contacted AshtonPenney Interim following news that a well known sports manufacturing company in its portfolio was heading towards insolvency. An acute increase in demand from customers had led to a production bottleneck, threatening the stability of this business. The incumbent manufacturing director was also inexperienced and had lost control of both staff and customers.
A heavyweight interim COO was sourced, re-interviewed and began a nine month assignment within two days of the initial stakeholder briefing.
During the assignment the interim executive was able to stabilise the company within one month, restructured the business and improved production efficiency, rapidly saving £14 million. As well as sourcing new business and extending contracts with customers, the interim was also able to mentor the underperforming manufacturing director. Above all, the COO restored confidence for both the private equity shareholders and the bank.
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Operational Turnaround – Paper Processing
Switzerland
As a result of globalisation and over-production in the sector, a medium-size paper processing company in North West Switzerland faced falling revenues and ultimately a cash crisis. Internationally there were major competition & consolidation issues which management had failed to grasp.
The restructuring of the company led by an interim COO started with optimising production of the most profitable lines and the significant reduction in overall inventory. The decision was then taken to close one facility and transfer the remaining capacity to the remaining plant. Foreign distribution centres were either closed, creating autonomous sales structures for a more profitable product range, or made independent through an MBO. Interestingly as a result of the plant closure it became possible to utilize the remaining real-estate for residential purposes, which promised a much higher appreciation value for resale. The outsourcing of all logistics such as stock rotation, packaging & transportation of goods brought additional cost benefits and flexibility.
The final sale of the logistics centre to a private transport company resulted in further improvement of the balance sheet so that within 15 months of the inception of the project, the company was cash positive, profitable and in a stable position for future growth. It also became a much more attractive target for acquisition.
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