CitGo
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
- 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.
- Renegotiated labor agreements.
Result: Significantly changed work rules and shifted to performance-based compensation.
Productivity improved noticeably and costs dropped.
- Dramatically streamlined fixed overhead.
Result: Reduced breakeven.
- Consolidated facilities and closed antiquated operations.
Result: Reduced breakeven.