Crisis Management / Turn Around

A manufacturer had entered into an extreme cash flow crisis.

Issues:

  • Zero availability on their credit line.
  • Management team could not see the “big picture”.
  • A plan had not been determined to resolve the situation.

Actions taken:

  • Acting as the interim CFO, a 13-week cash flow forecast was immediately put into place and managed.
  • Acting as the interim COO, an assessment of personnel, IT systems, manufacturing workflow process, the competitors, the market, and vendors was performed.
  • After the assessment was completed, a plan was implemented to address the following:
    • Organizational Structure
    • Manufacturing process
    • Purchasing process
    • Inventory levels
    • Engineering design and personnel
    • Pricing of Jobs to Improve Gross Margin
    • Bank Relationship

Results:

  • Successfully negotiated with the bank to be granted a seasonal overdraft.
  • A Lean Manufacturing process was implemented.
  • Inventory Levels were appropriately adjusted.
  • The engineering department was upgraded.
  • The pricing methods were changed and Gross Margin was improved by 20%.
  • Communications were improved with the bank.
  • The company survived its cash crisis and is prospering under a new business model.

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