Commercial/Operational Case Studies

A family business with over 30 years’ history and 300 hectares of orchards. The business needed to expand to be able to supply larger retailers and become competitive against importers in addition to aligning their produce to client needs and resolve inefficiencies. Following review and implementation of our recommendations, operational costs were reduced, sustainable improvements made and the produce provided, optimal to needs of their customers. The company is now trading directly with Tier-1 retailers.

One of the largest growers of stone fruit and applies in Australia needed to improve profitability and with our help, succeeded in improving yield, reducing water consumption and increased income.

Chicken breeding and processing plant had inefficient processes, were losing sales and weren’t meeting their customers’ needs. After our input and the implementation of streamlined processes, they increased sales, improved distribution and introduced new lines.

The company owned by a foreign Private Equity group provides construction and maintenance services to the Electrical Distribution Industry and whilst customers were happy with services, the business was not price competitive. Additionally, there existed a silo structure, poor cost controls, poor vendor management, undeveloped and unskilled staff all of which led to poor returns (3% EBITDA of sales). Following our restructure, the company had integrated business units, functional streams, collaborative working. Staff numbers were reduced and those remaining provided with training and development to upskill as necessary. Financially, this approach resulted in an EBITDA of 10% of Sales, $3m operational cost savings and $3m additional revenue.
A sudden unexpected resignation of the Chief Executive Officer and a very negative result from a survey of franchisees in combination with a militant franchisee group who blocked new franchisees from opening new sites resulted in the loss of $10m per annum. There was a lack of profitability in many of the franchises due to product and process standardisation across the operation. Promentor assumed the role of Chief Executive Officer, reviewed strategy and following some urgent change prevented financial bleeding immediately. The group was restructured and non-value-add processes and duplication of effort were eliminated. Promentor worked with the senior management team and franchisees to develop and implement new strategies, a performance framework and culture change. The result of this was a turnaround to profitability of $18m per annum, collaboration, better culture and an effective marketing and sales strategy.
Promentor has and continues to work with State governments across Australia to support service reviews and identify opportunities that can be leveraged to improve services and performance, increase efficiency and decrease operational costs.
A publicly owned retail insurance company had a customer base of over 100 independent retail outlets but due to inefficient structures, processes, lack of market strategy and different procedures across States was not profitable and was financially disadvantaged. Following a radical restructure involving consolidation of resources, reducing headcount by 19%, elimination of inefficiencies and standardisation of practice, we were able to facilitate this company in meeting its targeted 10% EBITDA on sales with over $20m operational savings per annum.
A large overseas manufacturer wanted to construct a new distribution centre in Australia within a tight timeframe. Key requirements included scalability to meet future growth and facilitation of entry to new markets in addition to providing consideration for all aspects of the Warehouse Functional Framework. Following the development of a pragmatic project approach and management of the construction companies involved, the centre was built to the desired specification within budget and on time.

A manufacturer of trailers required assistance in relocating operations and services to a new site as well as leveraging opportunities to increase efficiency. In this assignment, Promentor worked as a temporary part of the management team. In this role, we led the consolidation of the organisation, introduced Lean principles, created focus and achieved projected savings. The company team were collaborated and worked with to effect change effectively and to allow them to seize opportunities for improvement. Another key result in addition to relocating successfully, was the changing of the sales strategy to impart more discipline to the quoting process and enable feedback at all stages of projects.

A privately-owned furniture manufacturing company with an annual turnover of $45m and six locations was experiencing increasing overheads, falling sales, margins, creditors, and rising stock levels. Promentor reviewed the company across all domains before developing a reform plan that restructured the company, implemented a performance framework, aligned strategies and increased the customer base. The results of the reform were a more efficiently operated company that made a profit, had its risk exposure decreased and enabled entry to new markets.

Following acquisition of ten other companies and their staff, this Private Equity owned technology and equipment rental business grew to $73m turnover per annum. Due to a lack of integration after the acquisitions, functional and structural inefficiencies and poor sales left the company in a break-even position. There was lack of communication between divisions and services in the company leading to duplicate contacts with customers leading to consumer dissatisfaction. Following a focused review and assistance to integrate services we facilitated a structurally and functionally sound organisation that was efficient and had good communication with one point of customer contact. This in turn led to improved fiscal performance, the necessary number of skilled staff and great customer service. Sites were consolidated by incorporating small offices into the larger ones and non-performing management were replaced.

A privately-owned company turning over $60m per annum was not meeting its bank covenants and management had no visibility or understanding of performance. Issues existed with pricing structures in that they did not consider the location and facilities needed to provide their specialised service offerings. The environment the company operated in was volume and highly price sensitive. Following a review and the restructure the following outcomes were achieved:

  • Performance framework with monthly financial and operational service reporting to enable informed business decisions to be made.
  • Improved gross margins.
  • Eliminated unnecessary costs.
  • Implemented control processes including credit control and truck routing.
  • Consolidated the number and provision of depots.

This culminated in support funding being provided and ability to meet bank covenants as well as return to profitability.

A large Australian mine had excessive costs, reduced revenue, inefficient logistical and other operational processes, ineffective contracts and Take-off agreements as well as an under-utilisation of resources. Promentor, working with the management team and staff, undertook a comprehensive review, made recommendations and assisted the management team to implement these. Key actions taken included:

  • Renegotiation of contractor contracts.
  • Mapping and re-engineering of operating and logistical process.
  • Restructuring the organisational structure.
  • Developing and implementing a robust and effective performance management framework that allowed the monitoring of and the timely response to relevant Key Performance Indicators.

The results following implementation were:

  • 20% reduction of operating costs.
  • Appropriate levels of resource utilisation (human and equipment).
  • Efficient logistical and operational processes.
  • Effective governance and accountability framework.
  • The ability to identify accurately performance and performance trends and to respond to these appropriately in a timely manner.