A medium-sized manufacturer of large gearboxes had fallen into the red after being sold by the founder to an industrial holding company and was unable to get out of it for several years. Finally, the shareholders hired the interim manager as interim CRO to get the company back on the road to success.
Company lacked strategic and operational clarity after sale
In discussions with managers and staff, the interim manager quickly realized that the employees had lacked central leadership since the departure of the former owner. Despite their extensive specialist knowledge and relevant experience, they were not used to making decisions. As there had been no "direction from the top" for several years and the processes were not explicitly defined, there was tragic friction in the operational processes, which also led to personal hostility among the workforce.
However, there was a lack of clarity not only in operational matters, but also in the strategic direction. For example, projects for the development of new products tended to be triggered arbitrarily by product development without following a strategic line.
Works council won over early on as a constructive partner for the restructuring
In order to avoid jeopardizing the restructuring from the outset, the interim manager and the managing director involved the works council in the restructuring process from the very beginning. Fortunately, the works council recognized the opportunity for restructuring. The employee representatives supported the restructuring through excellent cooperation - and helped to shape it in an extremely constructive and competent manner.
Innovation process implemented and new applications identified
The interim manager started the strategic part of the restructuring by developing a market-oriented strategy together with product management and sales. At the same time, he established a multi-stage innovation process to check the previously sometimes erratic product decisions against sensible decision points (stage gates).
The company's large gearboxes were previously used primarily in mining. As this business has come under pressure worldwide for climate protection reasons, the interim manager and his team were looking for new applications for the company's expertise. Industrial gearboxes were particularly suitable for this. The interim manager incorporated the requirements for industrial gearboxes into the newly installed innovation process and fed them into product development. At the same time, he initiated the establishment of category management for this submarket and recruited a dedicated account manager.
By gradually standardizing standard items such as rolling bearings and seals, he worked with the purchasing manager to tap into savings potential, which contributed to an improvement in earnings.
Inaccurate specifications and deficiencies in the ERP system disrupt processes
At the operational level, the interim manager identified two particularly large disruptive forces. Firstly, incomplete specifications of the machines to be manufactured on the part of the sales department and frequent subsequent order changes caused capacity bottlenecks, avoidable machine changeovers and massive delivery delays (backlogs). On the other hand, incomplete and incorrect specifications from work preparation after a release change of the ERP system led to quality problems, further retooling and expensive rework in production.
Improved production planning increases productivity and motivation
The collaboration between sales and production planning proved to be a particularly critical interface, which in turn triggered purchasing processes and the planning of machine allocation. To prevent time-consuming changes at short notice, which were often initiated by Sales, the interim manager introduced a "frozen week" in consultation with management and Production, during which production planning could not be changed.
In addition, the interim manager ensured that work preparation added all the information required for production to the work cards in a feedback process with the employees in Production. These measures significantly increased production capacity - and also boosted employee motivation. A change to the shift model resulted in further capacity, which boosted throughput and yield.
New organizational structure: production strengthened - administration streamlined
The interim manager derived the necessary operational functions from the streamlined processes and defined responsibilities, required authorities, activities and involvement in working groups and decision-making bodies. He worked to ensure that missing functions were added and that recognizably superfluous functions were deleted without replacement. He also increased personnel capacities in production and cut a number of administrative positions.
In the end, the interim manager combined all steps into a new organizational structure. In order to minimize friction, he carefully coordinated with those involved, redrawing some departmental boundaries and relocating neighbouring functions in close proximity to each other.
Millions in losses halted: restructuring successful in the current year
After many years of 7-digit losses, the company was able to return to profitability in the current restructuring year - after taking all restructuring costs into account.
The newly coordinated processes and the adjustment of capacities to requirements have contributed significantly to the fact that the workforce is motivated again and hostility is no longer a burden on the working atmosphere.
