Tier-One Automotive Supplier Germany

Challenge

The customer suffered a 40% decline in revenues within one year, was manufacturing at a low productivity and was undercapitalized due to long-term losses. There was also a liquidity bottleneck. The raw material consumption was too high.

Approach

Development of new businesses with high margins.

Expansion of the services business with sales that can be acquired and cashed in short term.

Reduction of SG&A costs (overhead).

Short-term increase of productivity.

Measures (defined and implemented within 6 months)

Sales of engineering services was increased by factor three.

Two highly profitable special projects were acquired.

The collective agreement (Tarifvertrag) with the labour union was replaced by a long-term company specific turnaround agreement.

The productivity of the confection area was increased by 11% within 6 months.

The overhead was reduced by a double-digit number of heads.

Unprofitable products were outsourced to an in-house subcontractor.

The material consumption was reduced 2-digits through a reduction of rejects in extrusion.

Cost for main raw material was reduced 2-digit through re-sourcing and re-negotiation.

Results

The new financial year ended with a positive result after taxes.