A medium-sized company (250 employees, approx. 40 million euros turnover) in the components industry was threatened with sale to a larger market player due to poor performance. To prevent this, the current interim manager - who was in a permanent position at the time - took on responsibility for a performance-oriented realignment as the sole managing director.
Causes of value-destroying blockages in the company identified
Within the first three weeks, the interim manager uncovered the causes of the value-destroying blockages in the company in an end-to-end analysis. The company lacked a clear market orientation as well as modern production methods and efficient processes from procurement to delivery. Investment funds were not available and key employees were tied up in day-to-day business, primarily as "firefighters".
In an initial package of measures, the interim manager initiated the following steps:
- Focusing operational management on customer satisfaction and delivery capability
- Reducing tied-up capital by reducing finished stock and work in progress in production
- Workshops with management to activate responsibility and initiative as well as with employees, to initiate business-critical process improvements
Reorientation with vision, mission statement and strategy developed
The next step was aimed at improving performance in the market, in production and in all supporting processes. To this end, the manager worked with the team to develop a sustainable vision, a mission statement and a corresponding strategy. As a financial expert, the current interim manager also supplemented the typical financial key figures with operational key figures that measure performance in terms of output, quality and resource utilization in particular.
Lean management methods paved the way for a sustainable turnaround
In order to achieve a sustainable turnaround, the managing director also introduced lean management methods. Starting with production, a "pull" quickly developed from other areas of the company in order to achieve the already recognizable added value in sales and commercial administration as well.
The prerequisite for a broad activation of the employees was the clear commitment of the management team and the managing director. This included a strong personal presence, discussions at eye level and the courage to make decisions. The new transparency regarding targets and measures and their clear follow-up strengthened personal initiative and responsibility at all levels. The involvement of the works council - also in the incentivization of improvements - allowed numerous advances such as
- Reduction of material transports in basic production by 70 percent
- Deployment of maintenance staff at the plant increases availability by 7 percentage points
- Reduction of waste in machinePainting by 40 percent
- Input of production materials directly in special production increases productivity by 25 percent
- Cleanliness measures in manual painting reduce rework by 60 percent
Achieved positive result with positive net cash flow after one year
Communicating the tangible benefits to customers accelerated the transformation and ultimately led to improved key financial figures. All key operating figures that were the focus of attention were significantly improved. Delivery reliability, shorter delivery times, improved quality, increased plant availability, reduction of working capital, introduction of new products, increase in new customer sales: Within a year, the company once again achieved a positive annual result with a positive net cash flow.
