A German global market leader (1,200 employees) in the pliers industry had acquired an owner-managed, medium-sized, traditional company in the sector out of insolvency. In order to return the acquisition to profitability in the short term, a drastic restructuring was necessary. The aim was to reduce manufacturing costs and improve quality standards, as well as to realign process interfaces adjacent to production, such as internal warehousing and the internal and external sales teams. Furthermore, the product portfolio was to be streamlined and the workforce was to be reduced and compensated on the basis of a redundancy plan. The premise was not to allow any impact on ongoing business operations and to ensure delivery capability with stable quality standards. The interim manager - at the time an employee of the acquired company and later taken over by the global market leader - supported the sales process and post-merger integration into the buyer.
Pre-merger restructuring before and at the beginning of the insolvency phase
In view of the impending insolvency, the current interim manager focused on bringing production out of the red as quickly as possible at his former employer. Shortly after taking up his position, he implemented drastic changes in production. Production at the medium-sized company was traditionally run in a 2-shift system. However, this had never really been questioned and the second shift was limited to a few production processes. After analyzing key performance indicators such as production capacities, internal and external set-up times, reasons for machine and system downtimes as well as batch sizes and stock movements or the scheduling of orders in production, the interim manager reduced production to a single-shift system.
Shortening set-up times and introducing proactive forecast management
The biggest leverage was set-up times in combination with small batch sizes. With the involvement of the sales and order acceptance interfaces, the interim manager established a solution that bundles orders and enables proactive forecast management. This significantly reduced internal set-up times.
The interim manager used the freed-up resources to preventively maintain systems and machines in the "second shift". He also introduced intelligent machine set-up times to ensure plant availability in the first shift.
Conversion of production halves wage and energy costs
The surplus staff resulting from the reduction to the 1-shift system was compensated and released in accordance with a redundancy plan. The interim manager led the development of the social plan and, together with HR, conducted the discussions with the employee representatives.
The conversion of production halved wage and energy costs. The profit and loss account was in the black after the restructuring. This was a key factor in the global market leader's decision to purchase the long-established company.
Operative post-merger integration managed after takeover by global market leader
After the successful sale, the current interim manager was entrusted with a comprehensive technical operational due diligence within the new group of companies. The group had three production sites, each with its own established structures and manufacturing expertise. The task now was to structure the product portfolio in such a way that the products were manufactured at the locations that promised the best economic and qualitative results.
To this end, the interim manager audited the operational processes at the three production sites. In workshops with managers and employees, he worked out core competencies and identified weak points. This was not always easy. On the one hand, it was necessary to overcome general resistance to change, while on the other, managers and employees defended "their" location. Ultimately, however, a concrete recommendation for action was made for the reallocation of product production, which was implemented by the group of companies.
Successful PMI: profitable restructuring of the company completed
The acquired company was successfully integrated into the new group of companies and put on a solid footing in terms of production technology and profitability. The activities of the appointed insolvency administrator were limited to monitoring the cash flows. The redistribution of the product and manufacturing portfolio according to technological and economic aspects was carried out smoothly and to the satisfaction of the new group management and the managers of the individual production plants.
Through open communication with all stakeholders (managers, employees, works council), the interim manager turned those affected into participants. In this way, he developed a trusting and motivating collaboration that got everyone on board.
Thanks to the intensive collaboration between the plants, close contacts and connections were established at all hierarchical levels, ensuring fruitful and effective collaboration in the future.
