Skip to main content
Capability

Cost Assessment/ Reduction

We bring our unique mix of financial and operational capabilities and our unwavering focus on financial results to ensure that our clients have clarity on the company’s cost structure and opportunities and that operations improvement initiatives quickly show up in the company’s financial statement. We: rapidly decipher and break down the company’s cost structure leveraging financial and operational data as well as site visits and management discussions; identify key operational levers and their impact on cost; and quantify cost reduction opportunities associated with operations improvement initiatives. We ensure that any cost reductions are sustainable and our clients benefit from them not only during their ownership but also at exit in increased valuation.

banner
Industrial Goods Manufacturer
Determining the Right Fixed Cost Structure and Capturing Overhead and G&A Opportunities at Global Industrial Goods Manufacturer

Worked with senior business unit management to develop and implement manufacturing overhead and G&A savings recommendations across NA network. Established a zero-based organizational structure and cross-business unit management efficiency metrics for assessment purposes. First-year run-rate savings were $8.1MM, an additional $2.1MM of savings were targeted.

Show Details
banner
Fashion Accessory Importer
Freight Cost Opportunity Diagnostic and Savings Capture at at Leading Fashion Accessory Importer

Analyzed air freight cost from Asia to identify $3-5MM (32-49%) in cost reduction opportunities from: (1) tighter management of air shipments (including invoice auditing, formal RFP process to find a new freight forwarder, and reduced rush shipments of products and components); and (2) selective migration to container shipments. Helped client capture the opportunities, including auditing past freight bills to discover 13% chargeable weight discrepancy and executing the RFP process to find a new freight forwarder, resulting in a 31% reduction in freight cost. As per our recommendation, Client hired a VP of supply chain to spearhead capture of further savings via continued development of robust processes and migration of increasing amount of freight to sea. A year after Gotham left, FashionCo had dramatically lowered its inbound freight costs and migrated a significant portion of shipments to containers.

Show Details
banner
Personal Care Products Company
Establishing Cost-focused Operational Processes to Enable Rapid Cost Savings Capture at Premium Personal Care Products Company

Identified $9-12.5MM in cost reduction opportunities, which required addressing CosmeticCo's critical gaps in operational basics, which had become exacerbated by fast growth, and its limited understanding of/focus on actual costs. Within 4 months, over $7MM in cost reduction opportunites confirmed or detailed, with $2.5MM already captured on run-rate basis. CosmeticCo continues to implement detailed-out changes to complete capture of near-term savings and then pursue longer-term opportunities.

Show Details
banner
Product Testing Services Provider
Rapidly Validating Margin Improvement Opportunities and Assessing Capacity/CapEx Risk at Testing Services Provider

Conducted 2-week operational due diligence to validate margin improvement opportunities and assess capacity/CapEx risk. Gotham visited 7 facilities and conducted full-day operations review with management to understand operations management approach/processes and visions/plans moving forward. To fill gaps in this data poor situation, we performed various in-depth analyses – recasting labor cost structure, analyzing job-level data to understand profitability, building a bottom-up labor utilization and fixed cost model to project margins with revenue growth, etc.  Gotham’s due diligence work enabled our client to move forward with confidence and successfully acquire target in a proprietary deal.  

Show Details
banner
Dry Ice Manufacturer
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. 

Show Details
banner
Coffee Roaster and Distributor
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. 

Show Details

Related Capabilities

 

Operations Strategy/ Roadmap

 

Supply Chain Optimization

 

Manufacturing Operations Improvements

 

Product Lifecycle/ Complexity Management

 

Service Operations Improvements

 

Rental Operations Improvements

 

Sales & Marketing Effectiveness

 

Pragmatic Growth Strategy

 

Exit Preparation/ Positioning

Industry Expertise

 
banner
Consumer
 
banner
Food & Beverage
 
banner
Healthcare
 
banner
Industrials
 
banner
Energy
 
banner
Services

Want to learn more about how Gotham can help you with value creation?