The international B2B group with ten subsidiaries in a decentralized business, had enjoyed a steady growth for a decade, driven by an entrepreneurial spirit and acquisitions, but was now struggling with increasing competition. The group hadly just been acquired by a Private Equity company. The product and sales companies were own legal entities, reporting directly to the group CEO.
Increased competition had led to sinking margins. The new PE-owner, together with the CEO, saw a potential for cost reduction by putting all operations control in the hands of one person. However, this meant a reorganization by splitting up the subsidaries, as several of them had both sales and operations.
The PE-owners and the CEO engaged an interim COO with the assignment to:
- Create an operational strategy for the group, including:
- Plan for future manufacturing units
- Logistics management (with focus on outbound), and a central warehouse to reduce the restricted equity
- Establish a central purchasing function
- A capital efficiency program
Initiate a cost reduction program through central purchasing
- Start up a new product development unit to increase the development speed
After approximately 1,5 years, the interim COO had finished his assignment and a new function, Head of Operations, was created.
- Inventory value decreased by about 20%
- A new roadmap for the products was created and product development projects were started
- A cost reduction program was initiated focusing on:
- Key products (between 10-25% production cost reduction)
Logistics Management and central warehouse (between 10-20% cost reduction)
Outsourcing of products and closure of a smaller manufacturing unit (between 40-70% cost reduction)
Contact us to discuss your challenges!
Do you want to know more about how we can support you in driving a cost reduction program? We will provide you with the right solution.
Björn Henriksson, CEO of Nordic Interim
+46 8 503 855 00