Turnaround and Major ERP Rollout - Fast Moving Consumer Goods Company Returned To Profitability
A major FMCG company in the Far East became unprofitable. The business consisted of over 1000 unique SKUs, manufactured at 5 different sites. About 5000 employees were affected. Produce was also exported. Turnover was USD250mio.
To facilitate the turnaround, strong direction was provided. A team of about 25, consisting mostly of select employees was setup. Detailed analysis of the market place, key customers and internal operations (processes, IT systems, organization structures) were carried out in the first eight weeks.
This was followed by a design phase where the new direction of the company was charted in detail. This phase lasted about two weeks and involved all management and a larger group number of other employees.
After the design phase, implementation was initiated involving almost all employees. The business was turned around in less than a year. No employees were let go.
Users were trained to collaborate with IT vis-à-vis documenting, prototyping, implementing and testing the new processes and tools.
IT systems were modified to support new processes over the following year.
Some of the benefits included:
- 30% bottom line improvement, break even established in six months, sustained growth and profitability by 15 months
- Renewed focus on strategic and cash cow products. Unprofitable products were eliminated.
- New business channels were identified and created.
- Sales, marketing and back office functions were all heavily reorganized and wrapped around newly defined processes.
- New transportation agreements were implemented increasing delivery reliability and quality to an all time high.
- Closer working relationships were established with key suppliers and customers, facilitated by commonly agreed improvement targets and measures.
- Information systems were heavily modified to facilitate new processes. Because IT developments took longer to develop, the initial implementation was accomplished with temporary workaround tools.
- IT systems upgrade completed on time, within budget and with full employee participation and support.
- Key elements of this turnaround made such a dramatic impact that they are being replicated throughout other subsidiaries worldwide.