The challenge
A multinational company wanted help with a turnaround plan for their unprofitable distribution entity. The location had 15+ branches with 450+ employees and more than 100 years of trading. A turnaround strategy was required, to return the business to a profitable company.
The journey
Starting with a detailed product and client analysis, significant savings and increased profitability opportunities were identified and the following was designed and implemented:
- Sales – and margin plan per customer focusing on the priority of customers e.g. minimum order value, adding freight charges, etc.
- Restructuring costs to serve priority customers resulting in increased margin per customer e.g. delivery route efficiency, credit terms, payment behaviour, average order value, number of returns, time spent by internal resources, etc.
The result
The turnaround strategy designed and implemented resulted in:
- Profitable business within twelve months;
- Improved customer service delivery;
- Double digit revenue growth without significantly impacting cost; and
- Continued profit increase in subsequent years based on the transformed business model.
STICS Limited 