Food Processing Business | Profit Improvement

Business Issues

A changing market resulting in revenue slide of 15% year on year taking profits down with it. Input prices from suppliers were too high to sustain market acceptable pricing that would maintain margins. Despite having hundreds of customers there was no CRM platform in place. Monthly management accounts were poorly prepared & presented. No lean management initiatives to drive continuous improvement. A lot of “black boxes”.

Optivus Engagement

Optivus was appointed to conduct their EASE Program to develop an action  plan to restore revenues and profitability and set the business up for sustained growth.

How We Did It

The EASE Program forces a deep dive into all aspects of the business looking for areas of inefficiency, cost reduction prizes (black boxes) and reviews the suitability of the operating structure of the business.

The resultant action plan called for a major overhaul of the management structure, cutting out a layer of management and re-assigning accountabilities to drive stretch KPI`s across 5 business line functions.

Cost were cut, revenues and cash flow became the focus, supplier operating plans were developed to gain cost downs across 12 input categories.

The business owner was persuaded to invest in a new CRM platform and revitalise the field sale force which improved market penetration into new markets driving  revenues by some 15% inside 90 days.

Results

Average cost downs of 6% across 12 supplier categories | $2.0 million in annualised management costs eliminated | Debtor days reduced from 69 to 42 days | Operating costs cut by 10% | Revenues increased by 15% | Profits improved by 8.5%.  | Assignment conducted over 90 days.