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How we helped
Even after recovering from COVID-induced slowdowns, a specialty chemical company had a more than 500-basis-point lag from peers and historical norms. There wasn’t one culprit: The company lacked pricing discipline, exhibited poor manufacturing performance, deployed little customer segmentation and tailored service levels and experience, and captured limited synergy across four discrete business units.
The CEO and leadership brought in AlixPartners to help enable the company to redesign its operating model while providing the ability to scale G&A and operations. The new operating model was designed and implemented using an activity-based approach across every function.
Aware that pricing discipline was a major obstacle to margin improvement, we developed and executed a new strategy based on value pricing and true cost-to-serve. To implement the strategy, we redefined price setting, governance and admin processes and developed digital tools to support that work.
Under the new plan, customers could be segmented and catered to according to capacity and interest. We provided a digital toolset to support customer relationships and integrated it with the new sales, inventory, and operations planning process. Company leadership also wanted their global company to have world-class plant scheduling and safety programs, which we helped insure as part of a broader effort to rationalize costs and execute a sourcing program across direct and indirect spend.
The change management office presided over a $200 million boost to EBITDA, and the effort resulted in a nimble and lower-cost organization with the ability to perform rapid decision-making and scale quickly. The business recaptured margins lost to inflation, while maximizing value pricing and using commodity cost volatility as a lever to expand margins.
For the long view, the dramatic improvement in customer satisfaction mattered most. We oversaw improved quality, lead times, and on-time delivery of product. The resulting capital allowed the firm to invest further in growth.