CapEx/ Asset Utilization
Rapidly Pinning Down Capacity/CapEx, Manufacturing Cost, and Distribution Situation and Opportunities at Leading Dry Ice Manufacturer
Conducted 2-week operational due diligence to pin down capacity and CapEx situation, and to identify margin improvement opportunities in manufacturing, distribution, and branch operations ahead of a competitive auction bid. Created plant-specific profiles of 150+ pieces of production equipment and determined target had ample capacity for growth with minimal replacement CapEx risk. Analyzed and reconciled financial data from the target’s ~100 P&Ls and reallocated costs to establish true operational costs and production and distribution cost benchmarks across plants, branches, and routes and identified up to $6MM in margin improvement opportunities through disciplined distribution and pricing practices. Gotham’s due diligence enabled our client to move forward with a competitive bid.
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Rapidly Pinning Down Capacity/CAPEX Situation in Support at Premium Fresh and Frozen Food Manufacturer
Built a robust plant and equipment profile and comprehensive capacity model to provide client with understanding of true capacity picture in support of valuation assumptions for target in competitive bid process. Determined target could achieve ~3X stated capacity through minimal CAPEX; established 10% in quick-win cost savings available in labor, material, and overhead; and provided client with preliminary growth strategy utilizing co-packers, including targeted list of 9 potential co-packers interested in potential strategic alliance. Client moved forward with a more competitive bid based on Gotham’s capacity assessment.
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Determining Plant Closures and New Asset Placement at Large Consumer Goods Packaging Manufacturer
Formulated plant closure strategy and determined placement for the new printing assets by analyzing capacity, loading, customer logistics, and risks for each affected plant. Developed cost saving and one time cost scenarios. Developed business cases for two plant closures identifying $6.3MM in annual savings. Both closures were announced within weeks of the board's decision after the business cases were presented.
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Rapidly Capturing Manufacturing And Logistics Cost Reduction Opportunities At Ethnic Foodservice Products Manufacturer
Captured $1.2MM in operations run-rate savings in 12 weeks at an ethnic foodservice and retail private label products manufacturer by implementing shop floor management best practices. Gotham worked on the shop floor to: observe operations; identify potential improvement opportunities; provide immediate guidance to client personnel; and troubleshoot and pilot solutions. We improved line through from ~225 cases/shift to ~375 cases/shift, reduced fill weight by 3-7% to minimize overfill, reduce floor scrap by 50%; and eliminated expired rework scrap. To ensure sustainability and further improvements, we: trained client personnel, put in place process changes, tools, KPIs and reporting system; and identified/planned next set of improvement opportunities. Gotham also launched logistics savings capture by developing direct ship pilot and facilitating conversation between company sales teams and foodservice distributors.
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Establishing Growth Prospects, Margin Risk, CapEx Risk, and Operations Improvement Opportunities at Private Label Canned Food Manufacturer
In sync with the needs of each stage of the deal process, conducted phased customer, market, and operational due diligence, initially focusing on: 1) growth outlook – established the target’s category presence, identified key market trends, and built a model to project category growth; 2) competitive positioning – interviewed 27 PL and category buyers from supermarkets, wholesalers, food service companies, and brokers; and 3) CapEx and operational risk – visited the target’s 3 plants, assessed capacity, and reviewed operational improvement plans. After the client signed the LOI, Gotham conducted: a deep dive assessment of margin risk, using 7-year SKU-level price/margin data and outlook for major input cost drivers; and an in-depth operational diagnostic of material yield, direct labor, and inventory costs.
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Identifying Consolidation Opportunities and Creating Roadmap for Professionalizing Operations to Support Future Growth at Regional Family-owned Coffee Roaster and Distributor
Conducted a 3-week operational due diligence to establish a robust fact base of cost and operational performance in a data-poor situation, identify consolidation opportunities, and provide a fact-based, actionable plan for post-acquisition value creation, including: delivery and service route optimization to eliminate 30-40% of current routes; brewing equipment CapEx reduction through better deployment of used equipment; warehouse consolidation; sourcing efficiencies; SKU complexity management and inventory reduction; and professionalization of roasting and supply chain operations. Gotham’s findings enabled the client to close the transaction with confidence; the company started capturing identified opportunities within a few weeks of the deal closure.
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