An automotive supplier that was well positioned in the market had lost sight of its costs. Earnings fell and the competition caught up. Inventories were growing in the company. At the same time, costs at the head office and production sites were too high. In addition, the management was planning takeovers whose value was highly questionable. As a result of the crisis in 2009, the company finally got into difficulties.
Head office streamlined and production in Germany discontinued
In addition to the economic situation, the challenges of this mandate included a rather unconventional situation. Among other things, a former board member had held the managing directors of the holding company responsible for two investments, which was rather frustrating. At the same time, there were ideas for merging these holdings despite very different business areas. A joint production network was also being considered, particularly in China.
The interim manager initially supported the restructuring on the Supervisory Board. Following the departure of the Chief Technology Officer, he took over the operational management of the investments as Managing Director. The concept inherited from his predecessor defined the key points and main areas of action. As a first step, the interim manager coordinated adjustments to this restructuring concept with the management.
As a result, the head office of the supplier company was streamlined and production in Germany was discontinued. The overarching plans for a merger will also be shelved. The companies in the holding were given independent management teams, some of which were given new managers.
Core project converted to lean production techniques
A core project "Plant structure (China, Eastern EU)" was converted to the basis of lean production techniques on the initiative of the interim manager. This included a rationalization of plastic injection moulding, measures in order management, the reorganization of supply relationships between the sites and significantly improved material flows (focus on supply chain, main supplier EU).
As a result, productivity increased and inventories fell by 30 percent. Delivery readiness was significantly improved by halving response times. To expand international sourcing, the interim manager started a project with the responsible managing director with market comparisons (e.g. India).
Significant support for company foundation and sales development in the USA
A market analysis revealed increasing pressure from a supplier in the USA without the company having a presence there. Together with the top management, the decision was made to attack the US market. The interim manager played a key role in setting up the company and led the joint selection of a promising sales representative from the industry. He was provided with a business plan. In close coordination, products were adapted to the specific requirements of US customers and approved for the USA (UL approval). Despite a difficult environment, the start-up was soon able to report its first successes.
Improved value creation brings prospects for further growth
Restructuring and lean production sustainably improved earnings and margins. The company regained market segment leadership in the EU and achieved a new level of competitiveness. The production areas are working much more efficiently, inventories have fallen significantly and changes to plans due to market shifts are taking effect without delay. The US market can now be tackled on this healthy basis. The pre-crisis growth path is being resumed as a target and the turnaround has been successfully completed.
