Turnaround Case Studies
Produced Over $1.5 M in Profit with Remergenz - Case Study
Key points:
- $1.5M in profits within eight months
- $2.8M in revenue growth within eight months
Remergenz's customer had been in business for over 20 years with revenues exceeding $40M. The company provided a high end product and service using expensive capital equipment and a very experienced team that had the promise of generating a lot more revenues and profits. Unfortunately, the business suffered for the past few years and was struggling to achieve any meaningful additional net operational profits. After selling the company to a new investor group, results fell short of the new owners’ expectations. The management of the company tried for five years to improve their productivity and results with minimal success. The company hired Lean consultants to help it improve its operations with minimal lasting success. The company tried to restructure its debts with several of its vendors unsuccessfully which then provided its competitors with information to try steal the company’s customers in its stressed financial condition. The company's CEO was trying to affect a turnaround of the company and had the support of the board of directors, but needed some help to make the changes needed inside the company.
The CEO hired Remergenz, Inc. to help evaluate the situation. Remergenz built a small team to assess the company’s situation. During the next seven months, the Remergenz team worked with the company's leaders to improve the overall operational processes as well as provide additional focus and accountability with the rest of the team. Remergenz taught the team tools and techniques for solving problems including the basics of lean, six sigma, Baldrige, and their own proprietary methods. The team started to show improvements of as much as 35% in some groups within as little as 3 months.
After a total of eight months ending in 4th quarter of 2007, Remergenz was able to help improve the operations of the company thus resulting in an increase of its 2007 revenue by 7%. In addition, the efficiencies improved order flow, customer satisfaction and reduced costs. These gains in productivity were realized in cash when the company did not have to replace workers lost due to attrition.
The company went on to produce over $40M in sales and generated approximately $1.5M profit during the eight months of this effort.
Overall, Remergenz helped the company improve its revenues, increased its profitability, and helped maintain optimism and morale of the team during a turbulent time. These financial results provided the company with a ROI (Return on Investment) for retaining Remergenz in excess of the 10x target set by Remergenz at the onset of the effort.
Disclaimer: Not all companies will achieve this level of turnaround and in this short period of time.