Operations Analysis  –  Sample Engagements

1. Revenues and profitability of a $150 million food processing firm had been stagnate for a period of time and management needed to find ways to improve margins and contribution to overhead. We performed a detailed analysis of product and customer profitability to understand the mix and specific costs of products to customers, from the processing floor to customer delivery and determined that a relatively small fraction of products were incurring a disproportionate share of costs causing the company to lose money on certain mixes of products and customers. Working with both operations and marketing management we culled out certain products for unprofitable customers. The result was improvement in warehouse and logistics capacity, and increased contribution and cash flow.

    

2. On behalf of a state regulatory agency we performed a comprehensive review of two privately held gas distribution utilities that were owned by the same parent but operated as separate independent entities within a single state. The scope covered all operating facilities, field offices, and departments and functions of each utility including operations, maintenance, customer service, administration in field offices, management organization and reporting, IT, accounting, customer service, support, invoicing and collection, purchasing, inventory and capital asset management. The Deliverable was a formal document, reviewed with company management prior to submission to the state utility agency as part of the public record, of specific actions the utility should take to consolidate functions, streamline processes, reduce costs, and improve services to ratepayers. The company accepted and agreed to implement nearly all recommendations as presented and further agreed to the remainder of recommendations based on mutually agreed upon modifications.

    

3. We performed a corporate-wide operational analysis of a privately held $125 million multinational manufacturing company that resulted in renewed corporate planning and budgeting processes, identification of new revenue opportunities, elimination of non-performing assets and a product line, reduced overhead and associated costs, and implementation of a new IT organization, infrastructure, operational and accounting systems and a redesign of the corporate chart of accounts to generate product line profitability reports.

    

4. We analyzed the management structure, operations, cost management and related systems for a $75 million privately held sporting equipment manufacturer and implemented improvements to streamline and reduce costs of inventory operations and management.

Strategy  –  Sample Engagements

1. A $200 million privately held but professionally managed global manufacturer of hardware and industrial components suffered a significant loss in revenue as the result of a major recession in its industry and wanted to revamp its overall corporate strategy and tactical plans to effect a turnaround of revenues, profitability and achieve its revenue target of $1 billion in 5 years through a combination of organic growth and strategic acquisitions. Working with a global team of key client staff, and driven by the clear commitment and involvement of the CEO, we facilitated the development of a new comprehensive strategic plan that was driven by an absolute customer centric focus designed to structure the business by working from the customer back. The plan included rationalizing the firm’s overall business model, product lines, go to market tactics and how the company directly interfaced with it’s customers, implementation of a process and metrics to manage business unit, plant and organizational performance and a corporate wide initiative to achieve significant cost reductions on an accelerated basis.

    

2. We facilitated an enterprise transformation initiative for a $1⁺ billion privately held manufacturing and service company with over 20 independent business units. The scope of the initiative covered virtually every subsidiary, business unit and function across the entire company. The deliverable was a comprehensive business case for change that included significant investment in a corporate wide ERP system, operational changes to standardize and streamline core or common processes across business units and an overall plan and timeline for establishing a corporate structure to support the company’s plans for accelerating growth. Upon approval of the business case by the BOD, we executed Phase I of the plan that consisted of defining corporate-wide system requirements and the solicitation, selection, acquisition and development of the implementation plan of an ERP system.

    

3. We developed a business and organizational plan to map the long term organizational and facility requirements for a high growth privately held convenience store chain to enable the firm to manage planned rapid expansion. We analyzed the impact of high growth on core administrative and support functions and developed a design to reduce organizational overhead needs and related costs by 10% as a percent of revenue as the firm grew.
   We then analyzed future need for facility space and coordinated with an architectural firm to design an expansion of the firm’s headquarters that could be executed in-line with the growth of the firm’s organization over time on a planned and modular basis.

Transactions  –  Sample Engagements

1. Over time two insurance funds had evolved to provide self-insurance coverage for nuclear electric generation facilities that had been built across the US. Many members (the owners of the nuclear facilities), of the two funds overlapped and the two funds were structured and managed in essentially an identical fashion. Management felt that merging the two funds would streamline and reduce the cost of the administration and management of the combined funds. The critical issue was to ensure that the merger could occur without negatively affecting any particular member’s interest. We developed an overall construct that defined the structure and economic impact on an individual member basis of merging the two funds that was presented and used to gain approval by the funds’ respective Board of Directors and to successfully merge the two entities. This required development of a sophisticated model to define the structure of the new fund, define the immediate impact on each fund member as a result of the merger and ensure that no member experienced any appreciable change in its premium, standing in the fund (based on when it had joined either original fund) or reduced coverage in the event of a loss.

    

2. We developed a complex PC based model for a Master Limited Partnership (MLP) owned pipeline that was used as foundation for analyzing, valuing, acquiring and integrating acquisitions as the firm grew through acquisition prior to eventually being acquired by a PE firm. We also performed an overall assessment of the financial systems and related activities to identify areas for improving corporate financial service levels and to support management of the firm’s growth.

    

3. We developed and implemented operational improvements and an ERP system for a privately held $25 million high growth sign manufacturer to improve operations, cost management and support continued growth in advance of a planned sale of the business.

Transitions  –  Sample Engagements

1. A new $125 million privately held company was being formed as a spin off of an existing business. The management team of the new firm had leased space to house it’s corporate headquarters, and was bringing certain core staff with it, but had no IT infrastructure or systems for running and managing the business and was required to exit its current location and move in to the new leased space within an extremely tight timeline. We created and implemented the ground-up design of the organizational and IT infrastructure required for corporate support functions to enable the company to start up independent operations. This included design and implementation of the entire IT organization, infrastructure and systems required to manage the business, setup and implementation of core accounting processes, systems, and management reporting systems, and the upgrade and roll-out of new IT infrastructure technology to over 100 field locations.

    

2. We analyzed the manufacturing and distribution functions of a $200 million dairy processing and distribution company and implemented changes that reduced costs and enabled it to continue operations on a net even cash flow basis to avoid a shutdown that would have triggered a significant unfunded pension liability for the parent firm.

    

3. We reorganized a $20 million privately held label manufacturer to streamline support functions, reduce costs, increase operational throughput and improve performance measurement and management. This led to profitable operations after several years of losses.

    

4. We facilitated the turnaround of a $10 million privately held plastics component manufacturer after it experienced its first ever loss. We reduced operating costs, initiated controls over inventory and receivables, restructured the firm’s debt, implemented a management information system and redesigned the financial organization and hired a CFO to transition certain responsibilities away from the owner/founder to free up his time and energy to concentrate on growing the firm.