JIT Digital Book Printing and Fulfillment
Scenario: This engagement involved a three-day high-level operations due diligence assessment for a P.E. owned, industrial and residential fan and lighting manufacturer with ~$239 million in annual revenue. As a buy-side diligence the goal was to identify Prospective improvement opportunities with capture recommendations which the client could use to market the sale of the company and validate the prospective asking price. The project focused on direct and indirect staff savings, operational improvements, revenue growth initiatives, raw material cost reduction, and inventory turn improvement.
To address these goals, the project was executed in several phases over a six-month timeframe.
Phase 1: Conducted a preliminary review of the client's business operations and existing processes to identify high-level areas for improvement to target for more detailed deep dives.
Phase 2: Conducted interviews with key stakeholders to better understand the business needs, challenges, and opportunities.
Phase 3: Conducted a high-level assessment of the company's organizational structure, processes, and systems to identify areas for improvement.
Phase 4: Analyzed the data and developed detailed recommendations for improvement in the areas of direct and indirect staff savings, operational efficiency, revenue growth initiatives, raw material cost reduction, and inventory turn improvement.
Phase 5: Presented the finding and recommendations of this operations diligence assessment to the client's executive team, and worked with them to prioritize the recommended initiatives and develop a future implementation plan timeline.
- Direct and indirect staff savings of ~$20 million.
- Staff reduction of 34% with 485 FTEs remaining, resulting in a total savings of ~$19.8 million.
- Estimated 10-15% operational improvement through the introduction of Hoshin Planning.
- 1-3% increase in revenue, resulting in an overall increase of ~$2.5-$7.5 million.
- Inventory turn improvement from 6 turns to 12 turns annually.
- $6.3 million estimated reduction in raw material costs.
Future State: Post sale, areas that we recommended be addressed through future initiatives included further process improvement initiatives particulalry focused on new product development, supply chain effectiveness and warehouse management; implementation of advanced technologies to support operational efficiency, customer experience improvement initiatives, and expansion into new markets or product lines.
Outcome: We conducted a high-level operations diligence for an industrial and residential fan and lighting manufacturer, and identified and provided recommendations for improvement in areas such as direct and indirect staff savings, operational efficiency, revenue growth initiatives, raw material cost reduction, and inventory turn improvement. The client gained insights into prospective cost savings, operational improvements, and revenue growth.