Overhead Reduction
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.
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Validating Management's Operations Plan and Identifying Additional Savings at Customized Consumer Products Company
Identified $35-45MM in cost reduction opportunities, 2-3x management’s savings plan, giving our client an edge to win the auction. Despite very limited access to the target’s management, plants, and data due to the nature of the auction, Gotham was able to leverage dataroom information, a plant visit, and our relevant experience to build a solid fact base of the target’s cost structure – including a detailed 4-year line-item-level view of the operational cost structure and an analysis of 2,000-employee workforce linking each individual to the specific cost line in the cost structure – and to both validate and expand savings opportunities via a comprehensive outsourcing/consolidation model and an analysis of sales, marketing, customer service, and G&A costs.
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Rapid Inventory and Supply Chain Cost Structure Diagnostic at Niche Apparel Producer
Conducted an inventory and cost structure diagnostic and created a plan for capture of opportunities at a recently acquired private equity portfolio company. Identified $11+MM in inventory reduction, $1.2–1.9+MM in overhead expense reduction, and $0.4–1.2MM in freight cost reduction opportunities.
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Outsourcing Non-core Operations to Improve EBITDA, Avoid CapEx, and Reduce Operational Complexity at Specialty Industrial Equipment Manufacturer
Identified potential for outsourcing non-core activities, created phased plan, and helped with phase 1 (PC board assembly). Prepared client teams to handle subsequent outsourcing targets. Annual conversion and material cost savings ranging from 6% (transformers) to 20% (stuffed PCBs), with $4.5MM in near-term capital avoidance.
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Creating Sustainable Manufacturing Cost Improvements at Leading Industrial Hardgoods Manufacturer
Worked with manufacturing management to re-evaluate the existing manufacturing strategy taking into consideration all sourcing options (e.g. automation in U.S. plants, outsourcing, relocation). Profiled U.S. manufacturing operations by product and process type, and performed comparable profile of selected sited in Mexico and Asia, as well as developed economic profiles for outsourcing options and a business case for automation opportunities. Recommended strategy included moving high-volume assembly to Mexico, consolidating low-volume assembly in a single U.S. plant, selected automation, and outsourcing of non-core operations. Based on execution of our plan, company: captured $9MM in labor savings, eliminated $2MM in overhead, and avoided $6-7MM in capital expense.
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Creating a Fact-based, Realistic Strategy for Performance Enhancement at Leading Industrial Machinery Manufacturer
Conducted a 2-week diagnostic of current performance as a first step in helping craft and execute an operations strategy. Specific elements of the proposed strategy included: (1) outsourcing non-core activities; (2) rationalizing the vendor based and developing focused supplier partnerships; (3) segmenting operations (equipment vs. consumables) to improve supply chain management; and (4) Moving towards standard and modular system design to greatly simplify inventory and production. Short-term cost savings of $2MM successfully captures and $3+MM longer-term savings capture on track.
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