Industry – Furniture component manufacturing
Client – Privately held regional component manufacturer supplying the furniture industry
Scenario – The company has been in business under various owners since 1982. The current owner acquired it in 2000. Revenue has been flat or declining over the past three years due to the impact of the housing market and the recession on the furniture industry. The company lost money until 2005 and made marginal profits from 2006 through 2008. 100% of the company’s revenue came from furniture.
Approach – Using executive strategic planning we developed a strategy to diversify the company’s revenue from 100% furniture related to 60% furniture and 40% non furniture by 2012. We set goals to reduce product costs in order to make the company more competitive and to have cash for new product development and testing. We developed a management dashboard with key metrics and set goals to track and manage production costs.
Results-
The company has developed two new product lines outside of the furniture industry. Working in conjunction with the University of Mississippi they have developed and tested “green” building insulation and sound attenuation product lines.
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Using process improvement and root cause analysis programs we reduced the direct cost per pound of the company’s product by 22% between 2008 and 2009. This resulted in a savings of $1.688MM in production costs.
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The company hired a new plant manager and maintenance manager to sustain the improvements.
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We are currently developing marketing and sales plans for the company’s new product lines.
Industry HVAC
Client: Privately held HVAC components manufacturer.
Scenario: Company got 100% of it’s revenue from HVAC OEM manufacturers. It was in a very cost competitive and seasonal market.
Approach: Executive Strategic planning identified several non HVAC markets including a fast growth cold chain logistics market for the company.
Results: The company has several product lines serving cold chain and cool chain logistics. Marketing and sales efforts are promising. This is a much higher and less seasonal market.