A medium-sized manufacturer of frozen products had fallen into a deep crisis at the start of the coronavirus pandemic after years of gradual decline. The family business from Austria commissioned the interim manager to turn the company around as interim managing director.
The company was operating without strategic and operational clarity
After discussions with stakeholders, managers and product analyses, the interim manager identified numerous weaknesses. Above all, the company had expanded its product range over the years, but had neglected costs in the process. Production and quality management were not efficient. Sales were not price-sensitive enough and the margins in the B2B business were insufficient. In addition, management was not organized efficiently.
Lean realignment increases management efficiency
In order to reduce personnel costs, the interim manager developed a lean management concept that aligned management responsibilities along the value creation processes more operationally and reduced the number of management levels. He expanded quality management to include occupational safety, environmental protection and health protection and developed it into an integrated SHEQ department (Safety/Security - Health - Environment - Quality). Together with HR, he implemented a training plan to improve employees' skills and developed criteria for performance-related pay. In production, employees now take on more responsibility for product quality and operating results (efficiency and productivity).
Operational excellence in production reduces costs
In order to improve processes in production, the interim manager developed a variety of measures based on the principles of operational excellence. These included:
streamlining the production program with an increase in productivity of up to 40 percent
reduction of quality costs by an average of 40 percent through consistent process analysis
reduction of downtimes and improved product quality through better coordination of the raw material supply
optimization of process systems and packaging units resulted in an increase in efficiency of more than 5 percent.
Reduction of resource requirements: Water consumption (15 percent), natural gas (20 percent) and electricity (13 percent) were achieved.
Integration of controlling into decisions on new products or process changes
Introduction of preventive and autonomous maintenance
Supply chain management: improvement in production planning (frozen zone and forecast) and inventory management (stock rotation).
Better adaptation of the product portfolio to availability and markets
The interim manager's analysis revealed, among other things, that the frozen food company had inadequately adapted its production to supply opportunities - and was not calculating prices properly. In order to reduce raw material prices, he first adapted the production processes to the optimal harvest times of the food to be purchased. This eliminated additional costs that had resulted from the lower yield outside the season of the respective product.
In addition, the interim manager created scenario calculations for different production quantities and customer requirements. On this basis, he created a transparent cost structure and enabled reliable item cost calculations. At the same time, he worked with the sales department to evaluate customers in terms of turnover, importance and margin contribution. Customers with low or negative variable contribution margins or no strategic importance were eliminated from the portfolio or relocated to suitable production sites. For the remaining customers, the sales department realized price increases that had not been implemented for many years.
Turnaround achieved within a year - and production expanded for innovations
The combination of efficiency gains and savings resulted in savings of more than 5 million euros in the first year alone. This meant that the turnaround had already been achieved. The owner family regained confidence in positive business development. They invested several million euros in setting up a new unit for frozen herbs. Within a short period of time, this business unit made a six-figure contribution to earnings, which once again significantly strengthened the company's profitability.
The plant team received an internal company award after the first year, which brought additional motivation for operational excellence to the entire workforce.
