When the challenge is value creation

A $2 billion household goods company faced a challenging situation. Increased competitive intensity in the industry had put significant pressure on margins. The company had already taken actions to successfully streamline its operations and organization. It was looking for “what’s next?”—what new and different approaches would allow the business to achieve a step-change in profitability, on top of progress to-date.  The branded and private-label business was owned by a private equity firm; both leadership teams recognized that generating incremental savings had become increasingly difficult. They knew they had to find a fresh approach to creating additional value, and that doing so would require new tools and techniques. They reached out to AlixPartners for help.

Rigorous analysis reveals deeper cost savings

The PE firm had worked successfully with AlixPartners in the past. It arranged for the company’s leadership team to meet with AlixPartners to review ideas for generating additional value from the business. The executives agreed to have us conduct our proprietary QuickStrike^® assessment to identify and quantify additional opportunities to boost profitability. The assessment would focus initially on sourcing, manufacturing, and supply chain savings.

The QuickStrike^® exercise revealed opportunities to enhance profitability through improvements in labor optimization, materials usage, procurement, planning, and supply chain management. Over the next 12 months, AlixPartners worked alongside the company’s management team to design and implement these productivity improvement initiatives, with emphasis on ensuring the sustainability of savings.

When it really matters

The initiative delivered impressive results—including more than $85 million in increased profitability—exceeding the goals and expectations established at the outset of the project. Shortly after the engagement with AlixPartners ended, the PE firm and the company’s senior management team executed a highly successful sale of the company to a leading strategic buyer in the industry, creating tremendous value for shareholders, and a platform for additional profitable growth.