Turnaround Solutions Scenario

Because confidentiality is a cornerstone of our business, we never publish any information that may identify clients or reveal what we have done for them. This is a typical scenario that we have compiled from real experiences with multiple clients.

Situation

A 45-year old family business that fabricated steel products employed the founders, their three children and eight grandchildren. After a 15-year period of continuous growth and profits, the end of the mining boom caused sales to slump. The business was operating at a loss and costs were increasing.

The board engaged us to review the business and advise on increasing its profitability.

Problem

We discovered the core problem was a collection of outdated systems and processes that had grown organically during the good times. Coupled to this was a cultural problem resulting from 15 years of easy business.

  • The cost of goods sold (COGS) was high
  • The business operated in silos, not as a single entity
  • Operating processes were wasteful and had been built in isolation from each other
  • Administrative processes were inefficient and lacked integration
  • There were 11 different software systems
  • The workforce was under-utilised

Solution

Our solution was to design and implement a modernisation and improvement program that had numerous components.

  • Administrative and operational process redesign
  • A Lean program to reduce resource waste and process constraints
  • Low capital cost process tools and improvements
  • ISO9001:2015 certification
  • A single enterprise resource planning (ERP) system for accounts, sales, operations and human resource management
  • Mobile data technology in workshops
  • Training and coaching to improve workplace culture

Outcome

The business has experienced a complete turnaround. It is now system-driven with a very clear focus on innovation, flexibility, waste reduction and automation.

The turnaround has achieved measurable results.

  • A successful tender for a government project in a new industry sector, made possible by ISO9001:2015 accreditation
  • 50 per cent reduction in administration labour costs
  • 20 per cent increase in production capacity
  • 40 per cent increase in revenue per employee
  • 46 per cent reduction in process steps

We continue to work closely with the board, which retained us to provide coaching and consulting services.

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