Case Study: Turnaround Management & Restructuring

International steel company

The Company was in distress due to frequently changing managers and disunity of the shareholders. The order backlog decreased sales figures were heading further south. They lost in its home market around 50% of its customers and in the core German-speaking markets the required delivery terms and quality standards could be only partially fulfilled.

In this situation, Mr. Nicoloso took over the CEO position at all divisions to manage centrally and quickly without long discussions about right and wrong.

All resources were focused on the core of the problem - where are the weaknesses / strengths in the market, in the product portfolio and the sales organisation? Do tiered margin-calculations exist to recognize price-limits?

In a first step, the distribution channels and the product portfolio have been analyzed and all weak points in the distribution chain have been solved or whipped out. Convincing lost clients was on top of the board agenda. It quickly became clear in direct talks with clients where to change our terms and improve our relation to them. Accordingly the improvement led to a win-win situation for both sides, and thereof to a higher capacity utilizing the whole production capacity.

Internally, the production cycle has been planned with an average of 12 weeks. The system was more or less rigid. Simple designed items led to high stock of semi-finished products blocking also the production, complex products in turn were sometimes finished using "fire actions" to comply with delivery dates. The software could dynamically schedule the production; the correct values were stored in the system, but not used. The basic requirements were there.

By budgeting and training the team the lead time has been reduced by an average of 36%. That meant an 8% increase in operating revenue and a reduction of the working capital by 24%! As a "side effect" of the intensive analysis of the production chain we eliminated costs that have not contributed to value creation.

Overall, no employee has been laid off because of increasing sales and efficient operations which led to increasing productivity as well.

Upon completion of the restructuring actions the board seat was handed over to new managers.