The interim manager and Poland expert was commissioned by a German private equity company to lead a supplier for the premium segment of the European furniture industry out of the crisis as interim CRO.
The production plant based in Poland with a good 150 employees was in a self-reinforcing downward spiral: low output and poor quality led to non-compliance with delivery dates and complaints, which caused customer losses. In addition, manual reworking by temporary workers increased unit costs considerably. To resolve the problems, the interim manager initiated several sub-projects, which she worked on in parallel:
- Optimizing the production chain
- Improving the financial situation by regulating finances and reducing costs
- Intercultural skills: Establishing internal and external communication
Intensive store floor management to optimize production
The first thing the interim manager did was to reorganize production. This mainly included die-casting and injection molding, metal processing as well as powder and wet painting. She focused primarily on intensive store floor management. This resulted in a large number of small steps to optimize production, each of which was implemented promptly.
The interim manager also used lean management methods to optimize production planning, the workshop and logistics (new concept for internal logistics and warehousing). She was gradually able to reduce friction losses in the cooperation.
In addition, she established close quality control of the end and intermediate products as well as the packaging lines and daily production controlling. She also introduced additional quality management for the goods produced and outsourced parts of the external finishing process.
Successful negotiations with the company's bank create financial leeway
In parallel, the interim manager began to resolve the company's financial bottlenecks. She identified a whole series of unfavorable contractual arrangements with customers and suppliers. In renegotiations, she succeeded in significantly improving conditions such as prices, payment terms and delivery dates. She also updated leasing contracts for production machinery and negotiated more favorable terms.
She managed to suspend repayment of an investment loan by six months and extend the overdraft facility at the company's bank. Another step towards improving the financial situation was to determine the contribution margins in the product portfolio. Some items proved to be less profitable. The recalculation of these items in turn served as the basis for new price negotiations with customers.
Intercultural skills trained in sales and purchasing
The interim manager had already established in the analysis that some problems in communication had at least contributed to the crisis. It was less about a lack of knowledge of foreign languages. Above all, a lack of intercultural knowledge impaired communication with international business partners.
As a Polish national and a manager with experience in Eastern Europe, the interim manager had the necessary experience and trained the sales and purchasing staff in particular in intercultural cooperation and effective communication with customers and suppliers. Open and objective internal communication in the spirit of agile project management was also a key success factor in internal collaboration.
Significantly increased production and earnings despite the coronavirus crisis
The coronavirus outbreak in 2020 put a huge damper on the project, as the furniture industry was affected by the closure of production and sales facilities across Europe. Nevertheless, the interim manager's measures proved successful: production figures and the operating result at the Polish plant grew significantly. After the corona-related border closure by the Polish government, the interim manager hired a local manager for the further implementation of the project, with whom she initially managed the plant remotely. She later handed over operations management to him.
