A large manufacturing company had performed strongly over decades, however a significant deterioration in market conditions had significantly impacted revenue forecasts and ultimately the projected NPAT for 2016/17 and 2017/18. This forced the company to re-assess its strategy to address the headwinds.
The company had strict Bank Covenant ratios (around debt) and needed to be pro-active, otherwise they would exceed these ratios. To ensure they remained in a strong financial position, the Board supported a management proposal to implement a Transformation Program.
[toughproblem] were engaged and put in place a program that promised to deliver the following;- A comprehensive organisational re-design to improve strategic alignment
- Identification of Quick Win cost saving opportunities
- Assess CAPEX policy to improve investment outcomes
- Identification of long term initiatives to improve the Company’s cost and competitive position
Original source: Tough Problem Case Studies