Strategic realignment and restructuring, performance improvement and turnaround
Focus areas: Strategic realignment and restructuring as well as performance improvement and turnaround
Company:
- Two automotive suppliers for mechanical components and assemblies Tier-2
- Both companies located in the Vallée d’Arve/France, approx. 15 km apart
- Consolidated turnover of € 26 million, 190 employees
Responsibility:
- Sole management of two operationally independent French subsidiaries of a German group of companies
- Consolidated turnover of € 26 million, 190 employees
Initial situation:
The two companies successfully won lucrative, long-term automotive supply contracts until the early 2000s. After that, however, it was not possible to win comparable follow-up orders, investments failed to materialize and sales collapsed. Although sales had stabilized in recent years, losses had increased dramatically. The companies had a negative return on sales of 30% in the last two years.
The takeover of the mandate takes place during the peak phase of Covid-19 with massive restrictions on direct communication and travel. The entire second management level is missing or has resigned. Both companies have massive operational problems. The supply chain and finished goods warehouse are empty. Delivery obligations to automotive customers cannot be met – customers are experiencing line stoppages.
Measures:
- Root cause analysis of the lack of competitiveness of the company as a whole
- Analysis of the product and customer portfolio with regard to current profitability and optimization potential
- Definition and implementation of a new corporate strategy in production and sales
- Stabilizing the organization and rebuilding the second management level
- Definition and implementation of technical and organizational measures to increase productivity
- Renegotiation and renegotiation of contracts with Tier 1 clients
- Consistent contract management and cost optimization of logistics
- Introduction of medium-term production and delivery planning
Result:
- Turnaround (improvement in the EBIT margin by twenty percentage points) after several years of steadily increasing losses
- Stabilizing the organization and rebuilding the second management level. Preparation of the organization for the merger of the two companies under company law
- Increase in production output and productivity by 25%
- Stabilization of the supply chain and logistics and reliable fulfilment of delivery obligations – including during the critical summer holiday period for the first time in years
- New contracts with existing customers for more than € 20 million
- New IATF 16949 / ISO 9001 and ISO 14001 certification for the new organization
