Initial situation:
Profitability of a Swiss manufacturer of flexible packaging out of polyethylene had been badly declining for years. In addition, liquidity had been deteriorated distinctively as well. The appreciation of the CHF lead to increasing price pressure and additional foreign suppliers on the Swiss market place.
Turnaround
Actions
Results
Processes optimization in production, sales and administration
Lay off of approx. 80 FTE (-22%) as well as reduction of overhead expense by more then CHF 6 million p.a. (-13%)
Ensure stable liquidity
Reduction of net working capital by CHF 14 million (-13% total assets)
Implementation of contribution margin accounting
Creating controlling instrument to determine product pricing
Establish variance analysis (budgeted vs. actual production cost by individual production order)
Measure and control production efficiency
Actions
Processes optimization in production, sales and administration
Results
Lay off of approx. 80 FTE (-22%) as well as reduction of overhead expense by more then CHF 6 million p.a. (-13%)
Actions
Ensure stable liquidity
Results
Reduction of net working capital by CHF 14 million (-13% total assets)
Actions
Implementation of contribution margin accounting
Results
Creating controlling instrument to determine product pricing
Actions
Establish variance analysis (budgeted vs. actual production cost by individual production order)
Results
Measure and control production efficiency