The interim manager's client is part of a listed Swiss group with a broad technology portfolio. The client manufactures systems for the sterilization and cleaning of equipment and products in the medical technology and pharmaceutical industries. At the time of the interim mandate, the company consisted of 2 interlinked and interdependent business units. With more than 1,000 employees and 3 European production sites, it is one of the leading global companies in this industry.
Investigating inadequate performance in order processing
The Life Science business unit had been making significant and growing losses over the years. This was compounded by insufficient delivery reliability and a significant migration of regular customers. The cause was suspected to be inadequate performance in order processing at the German site. The interim manager was therefore commissioned to analyze the situation there, develop proposals and scenarios and lead the implementation of the measures.
The broad-based analysis very quickly revealed that the entire value flow of the business unit had to be assessed across all three locations. Only in this way was it possible to make a meaningful decision on a complete reorganization, sale or coordinated discontinuation of all business activities of the Life Science business unit.
Realistic scenarios developed in workshops
In order to gain a comprehensive picture of possible theoretical and practical scenarios, the interim manager initiated and led several workshops. Together with the directly subordinate managers required for the future carve-out, the options were recorded, discussed, described and compared across all scenarios with the help of a benefit analysis. In the end, the financial and strategic business plans for two realistic scenarios were drawn up and integrated into the final benefit analysis.
Product portfolio and company structures adapted for carve-out
The owner opted for the scenario favored by the team of a complete carve-out from the group and the transfer to an independent company within the listed parent company. This scenario included the following elements:
Adjustment of the product portfolio with a focus on "high-margin and sustainable" products. Non-profitable and strategically irrelevant products were removed from sales.
Closing the site in Germany for the Life Science business unit: production was relocated from the German site to the new plant in Slovenia.
Relocation of the "brain functions" of the German site: for example, engineering, internal sales and software development moved to the main site in Switzerland so that all "brain functions" could now be managed centrally.
Implementation of an autonomous ERP system, own HR department and necessary finance functions and expansion of own global distributor network
Divested company to break even in 3 years
The successful carve-out from the group structure into an independent company has created the conditions for achieving a turnaround from the highly loss-making situation. The plan is to break even in 3 years at the latest.
Personnel and structural costs reduced - order intake above plan
The headcount was reduced by around 100 jobs. Structural costs were also successfully reduced. The carve-out did not damage the parent company's image. On the contrary, the rapid and successful reorganization resulted in a gain in reputation and the regaining of regular customers who were thought to have been lost.
The current order intake is above expectations and the underlying business plan. This very pleasing order intake will significantly accelerate the achievement of targets.
The vacancies in the management team were filled quickly. The stabilization of the 1st and 2nd management levels ensured that the fluctuation rate during the 12-month reorganization was less than 3%.
