£10 million t/o Engineering Company (Capital Goods)

The client was an MBO of 10 years standing operating in the goods lift market. Although the client had expanded from £3m to £10m turnover pa, pre-tax profit had remained at break even to £100k profit pa. This resulted in a cash crisis. The cause of the problem was that systems, organisation, and managerial skills had not kept pace with expansion.

Initially Collingwood was hired to review company reporting and produce a report on the business as a whole on recommendation of the venture capital firm involved. Following a review of the report with the owner managers, Chairman and their new FD, Collingwood's role changed to CEO for the duration of the turnaround.

The actions taken by Collingwood to improve client company performance were to:

Change manufacturing strategy to adopt more standardisation of design.
Introduce improved production planning.
Set up a logistics function from existing staff to co-ordinate the production plan, purchase materials, control stock and control sub-contract labour.
Focus customer contact and responsibility for the profitability of jobs on sales
Reduce non-conformities in production documentation and bills of material
The turnaround took Collingwood eight months and involved sixty days turnaround work. This was followed by a period of handover. By the end of the performance improvement project, the client company had:
Annualised profits of £750k pa.
Whole goods lift output increased from four per week to between six and seven per week.
The company was moved out of Barclays Business Support, and the VC recorded approval of the progress made.