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Fesco Division - West: Plastic Housewares manufacturer (#2 to Rubbermaid)

Situation: Multi-million $ monthly historical cash burn over 43 months. Parent seeking turnaround and exit.

Outcome: Turned cash flow positive. Saved business. Became true low cost producer. Division sold to private investor group.

Role: Assumed Operating Control – duration: 2 years

State of Affairs: Volume producer focusing on lowest market price point and newest product design; typical variance management; costs incongruent with pricing.

Proximate Cause of Failure: Weak, entrenched management; fear of change. Failure to manage to best business metrics.

Fix: Provided strong leadership and shifted focus to true business drivers

  1. Company produced massive tonnage.
    Installed simple manufacturing measurement system - Pounds per Labor Hour.
    Result: Workforce could relate - Productivity doubled overnight and continued to improve measurably over time. Variable cost plummeted.
     
  2. Renegotiated labor agreements.
    Result: Significantly changed work rules and shifted to performance-based compensation.
    Productivity improved noticeably and costs dropped.
     
  3. Dramatically streamlined fixed overhead.
    Result: Reduced breakeven.
     
  4. Consolidated facilities and closed antiquated operations.
    Result: Reduced breakeven.

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