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Background

The client, an owner of a small bespoke manufacturing company which operated primarily
within the automotive industry was planning to expand  his business to meet increased
orders from his customers. The company was generating low profit margins and the owner
was concerned that the investment required to increase capacity would not be reflected in
future ROI.

The company was recognised for the quality of its products and its superior customer
service and had grown quickly since start up and employed twenty staff. The success of the
company was mainly due to the drive and energy of the owner, and the family like structure
operating within the company. This resulted in the company being extremely client focussed
with high quality products and customer service though not particularly profitable. See also
Strategy and Operations studies.

   

Problem Definition

The roles and responsibilities of employees was poorly defined with overlaps
between different management functions and a fuzzy approach to tasks and a
lack of personal accountability

Solutions

Agreed a new organisational structure, with roles and responsibilities defined
for all managers and staff

Introduced performance management system and specific and measurable goals

Implemented bonus systems for employees and managers

Benefits

Reduced creditor days from 90 to 45 days

Reduced overtime costs by 18%

Increased turnover by 7% and net profit by 20% 

Reduced creditor days from 90 to 45 days

Reduced overtime by 18%

Increased turnover by 7% and  net profit by 23%