aUSTRALIA
Fuel and Lubrication Industry
The backstory
Family owned business dealing with rapid growth which required stabilisation and the implementation of more sophisticated systems, processes and procedures. There were no policies and procedures in place and a new system was implemented with the transfer of data not reconciled. The system was not used to its full potential either, as old processes were still being used. The company’s ambition was to achieve accelerated growth for product related work, particularly OEM equipment and services. They had identified some opportunities for growth but did not have the on-ground support to execute change, monitor progress and train internal staff. Client privacy is important to us therefore full information and actual results have not been disclosed.
01
The challenge
- Absence of structure – organisational, financial, operational.
- Lack of strategic clarity and alignment.
- New System with the use of old processes.
- Operational inefficiencies and lack of consistency with processes.
- Focus on low GP customers.
- Lack of internal controls, policies and procedures.
- Low employee productivity due to lack of monitoring and clear organisational leadership.
- Certain skills were missing from various areas of the business.
- Financials required greater sophistication for analysis, reporting, risk mitigation and control.
- Financial reporting was basic and did not provide enough information to make informed decisions promptly or with confidence.
- Sales Reps were given unrealistic targets and were not monitored with specific KPIs or ROI analysis.
- Manufactured equipment sales projects were unclear during production causing customer issues with the lack of interpretation of job builds. Stock was also not held for production purposes which would cause the completion of works to be delayed.
- Warranty for inventory was rarely recouped or monitored with the supplier which costed the business money.
- Manual based processes creating inefficiencies. Day to day operations were unproductive and objectives everchanging. Unclear marketing messages with outdated branding
02
Our Solution
Formal assessment of entire company
A formal assessment on the entire business was conducted to identify areas of risk, opportunities and improvement.
We interviewed all personnel, held workshops and on the ground reviews to see the business for what it was.
We collaborated with employees to share risks exposure, inefficiencies identified and formulated solutions to address them. Employees were steered towards best practice solutions making them feel part of the solution and holding greater acceptance and ownership for changes required. Training was also held to fast track adaption for change.
Created clear mission, vision, values, to grow the business
Created clear mission, vision, values, with strategies to grow the business in a workshop forum with the Head Office team. This was monitored monthly and realigned every 6 months as required.
Clarifying the company’s core competencies and determining which services / products would be financially beneficial to pursue more strategically.
Created detailed sales budgets
Created detailed sales budgets per customer, per state, per product / service. Full analysis was performed on history with forecasting predictions. This was monitored monthly and action was taken to improve numbers or reward the team. Data and insights were reported for supporting evidence for Management to highlight financial impact if changes were not made. Some examples included creating a minimum order value for customer orders, creating strategies for stock obsolescence to reduce slow moving stock.
Established Key Performance Indicators
Established Key Performance Indicators for key processes with clear deliverables – keeping them simple for recording purposes, reporting and monitoring. Created dashboard reporting highlight financial and non-financial data in summary and detailed format and holding monthly management meetings. Identify quality business opportunities that served the company’s vision and goals. Improved sales quotations, follow up procedures and closing deals – resulting in higher sales conversion ratios and the achievement of sales budgets.
Improved stock control
Improved stock control through stock policies and procedures, creating an automated warranty claim system and assessment process
Warranty procedure allowed for stricter warranty assessment – and more rejected claims. Monitoring of warranty claims assisted with obtaining credit notes or cash back from suppliers. The warranty claims process was also automated delegating the task to the customer rather than the Administrator.
Leadership training
Managers received leadership training to gain an understanding of their leadership style, were given methods and tools to improve overall employee performance wellbeing and productivity.
03
Results
$350M
SALE CONTRIBUTION
100%
RETENTION RATE
- Expanded branches in other states and created 3PL opportunity to test the market.
- Provided real live data allowed Management to take action instantly and deal with issues proactively.
- Improved customer service and satisfaction through systemised and consistent processes that were streamlined across Divisions.
- Confirmed with customer feedback, reviews and increased sales.
- Structured systematic approach to operations with a positive financial impact.
- Greater productivity due to clearly defined roles, responsibilities and accountability through KPI reporting and performance appraisal reviews.
- Faster delivery of customer orders with improved process efficiencies
- Clearer leadership approach for the Management team.
- Improved employee performance and engagement with nurturing leadership and a constructive culture.
- Launched a new website with clearer messaging, cleaner branding and newsletters to promote sales.
- Growth accelerated with strong foundations and confidence to continue on their journey with the team well equipped to achiever great heights.
- 100% retention rate of all new hires. Conducted rigorous interviews and on the spot testing.
- Increased 4x Net Profits under 18 month period. Wages inflated against market were not normalised along with Director expenses. If excluded, the result would have been greater.
- Provided real live data allowed Management to take action instantly and deal with issues proactively.
- Increased gross profit margins to targeted budget and more.
- Product rationalisation and inventory analysis allowed for 50% plus GP for most products.
- Reduced direct costs by 30% and indirect costs by 15%.
- Reduced debt by 11% through refinancing bank facilities.
- Restructured FBT impact and saved $50k through various methods.
- Sold products into new markets and targeted customers more strategically with greater Gross Profit margin per product and customer.
- Sold part of a business to an international buyer – which was no longer part of the clearly defined business strategy.
- Acquired and merged a company which aligned to the core company vision and product offering.