Case Study - Project Blue

The Business: Manufacturing and engineering division with $110M revenue, 9 sites, 450 staff, designs and builds mobile and static compactors and metal and plastic collection bins for the waste industry, part of an ASX200 public listed company.

The Brief: As Interim GM, "lead the division turnaround, return to profitability fast, and position for divestment". Time frame for completion including divestment was 18 months.

Background: The manufacturing division (one of four divisions of an ASX200 listed group) was turning over $110M per annum and had recorded a loss of $10M. The division was created following the acquisition of 9 separate businesses within Australia & NZ but developed severe losses due to multiple causes. Following a strategic and operational review, we commenced as the Interim GM to drive the restructuring program. This resulted in the division turnaround from a loss of $10M to a profit of $1M in 12 months allowing the board to divest the majority of the division, as part of the group debt reduction program at the 18th month.

As the Interim GM, we provided critical leadership to progress a range of strategic, operational and working capital initiatives to stabilise the division. This recovery significantly improved shareholder value which resulted in the business being sold as a going concern.

This was complicated by a wide product range, geographical disbursement, multiple cultures, poor systems and low morale.

Our role was to project manage and to lead and implement a 5 point turnaround plan (steps expanded in diagrams below).

• Product range to be rationalised.

• Product costing and pricing models to be overhauled.

• Opportunities to amalgamate or close sites to be investigated.

• Quality control improvement actions to be implemented.

• Management and overhead structures to be streamlined.

Due to urgency and the extent of the challenge, multiple improvement projects occurred concurrently as drill down issues were identified, focusing on and resolving root cause (not effects).

Many strategies fail, not because the strategy was wrong, but because it was poorly implemented or not understood. To assist the communication and implementation we developed visual tools which were openly shared and discussed and integrated as project management tools - examples below.

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PACE Outcome Assessment.
Using a Problem, Assessment, Corrective Action, and End Results framework, the review of the project headlines are: