Sales and operations turnaround for a VMS company

How we helped:

• Consumer Products
• Revenue & Growth
• Turnaround & Restructuring

With declining sales following a period of massive growth, a VMS company was in a precarious situation with increasing costs and rapidly shrinking margins. AlixPartners was called by the primary private equity investor for help. With no improvement plans for either side of the P&L, AlixPartners started with a QuickStrike diagnostic across operations. 

Our diagnostic started with exploring the different lines of the P&L and investigating the operational drivers leading to financial outcomes.  In week one, it was discovered that debt covenants were at risk and cashflow modeling and management would be required as well.  By the end of the diagnostic, a multi-faceted plan was developed, in alignment with the management team, to drive an immediate full company transformation. 

AlixPartners moved into implementation immediately following the six-week diagnostic and stood up a transformation office to drive workstreams and initiatives across all operations, SG&A and S&OP to be followed by commercial improvements. The findings from the plan estimated a 20-50% EBITDA improvement on a run-rate basis with 80% of the savings occurring in one year.  

During this assessment and implementation, we: 

• Stood up a transformation office and workstream specific support to actively drive change management and ensure realization of changes with tracking to KPIs and financial improvement
• Married financial and operational benchmarks where data existed and filled in large data gaps with observations to size the major opportunities and estimate the size of impact
• Built a clean-sheet view of all functions in the organization and worked with functional leaders to refine to company specifications; implemented organization changes including a list of start, stop, and continue activities
• Created a set of direct and indirect procurement opportunities for both internal and external savings i.e., design to value of packaging, supplier diversification/consolidation, supplier bidding, and negotiation support
• Implemented an improved S&OP process to drive customer fulfillment, reduce inventory levels, and reduce E&O, which had spiked
• Developed and implemented sales and marketing initiatives to drive topline growth including customer and product specific pricing across 100s of products, key account growth plans and marketing investment rationalization

20-50%

EBITDA improvement within in ~1 year

In the final month of AlixPartners’ support, the company had realized the high end of the savings range estimated and beat their final quarter revenue forecast. One year following the engagement, the company had more than doubled their EBITDA.