AN INTERNATIONAL COSMETICS AND OTC PHARMACEUTICAL COMPANY
- Problem: Under new ownership and senior leadership for a turnaround situation, the company had significant challenges in managing the operational (service levels) and financial performance, with 3 straight quarters of low earnings results.
- Solution: From the business assessment, four essential areas in which the company was failing were identified -- unacceptable retail service levels, rising cost of goods, poor management of working capital, and excessive SG&A costs. Synergetics developed a turnaround plan to address these failings.
- ROI: Service Level Improvement Fill Rate from 85% to 97%; Working Capital Improvement with Inventory Reduction 17% ($120M base); Annualized P&L Savings $26.2M with COGs -6.3%, EBITDA+4.2%
The turnaround plan focused on several areas where drastic improvement was required to improve the company’s operational efficiency and financial viability:
- Sales and Operations Planning / Forecasting
- Retail Service Level Management
- Working Capital Management (Inventory reduction, Payables, and Receivables Management)
- Materials Procurement (with focus on COGs reduction)
- Freight Management
- Organization Design and SG&A Cost Reduction
- Facility Rationalization and Closure