$1.8M EBITDA Improvement And 34 Week Lead Time Reduction For Industrial Manufacturer2024-04-19T10:46:44-06:00

$1.8M EBITDA Improvement And 34 Week Lead Time Reduction For Industrial Manufacturer

$1.8M EBITDA Improvement and 34 Week Lead Time Reduction for Industrial Manufacturer

At A Glance

$1.8 Million

EBITDA Improvement

34 Week

Lead Time Reduction

$172,000

Cash Improvement

$550,000

Working Capital Cost Reduction

The Challenge

Following the integration of two subsidiaries into an automation equipment company (“The Company”), a prompt need arose to identify synergies and optimize the supply chain within these previously independent entities to ensure a seamless integration.

Recognizing the complexities involved, the Private Equity ownership engaged Forsyth Advisors to assist after retaining our services from a successful collaboration a year prior.

Approach and execution

The Company granted unfettered access to crucial data and information. Forsyth Advisor’s team leveraged this access to meticulously analyzed various categories and processes to pinpoint opportunities for significant improvement. Notably, identifying numerous opportunities for vendor diversification and streamlining downstream processes; each presenting potential savings, cash flow enhancements, or inventory reductions.

After successful qualification of new vendors through sample development, Forsyth Advisors used the new benchmark pricing to negotiate $800K+ in savings with an incumbent. Forsyth Advisors then moved several processes away from the current incumbents to erase bottlenecks that opened up capacity and sharply reduced lead times. Unilaterally, working with the incumbent to implement a stocking program that further reduced lead times from 6-months to two weeks, and utilized the same distribution network as the sister company to allow another 10% cost savings, enhanced data visibility, ERP integration, and claims management.

Following the implementation of several initiatives, Forsyth Advisors was able to revisit the data and identify additional opportunities for cost reduction and EBITDA improvement. It became evident that inefficiencies persisted within the production process, hindering the company’s ability to fulfill its commitments. Recognizing the potential for further optimization, we embarked on a thorough analysis and, within one month, established a clear roadmap for finalizing the flagship product. Through the elimination of antiquated and unnecessary quality checks as well as the strategic outsourcing of processes, another 75% reduction in freight costs were realized while simultaneously enhancing capacity within incumbent operations.

Results

Combined defensible EBITDA amounted to $1.8M. Aside from cutting costs, Forsyth Advisors was able to overhaul the production process. These new operations efficiencies sharply improved lead times by 34 weeks, $172k cash in hand, time to cash in hand, and other cash flow improvements that have since led to an optimized pre-exit state.

$1.8 Million

EBITDA Improvement

34 Week

Lead Time Reduction

$172,000

Cash Improvement

$550,000

Working Capital Cost Reduction

“The work we accomplished really proved that sourcing and supply chain can be a strategic value creation lever within Private Equity. What used to be an afterthought can now become a strategic differentiator – I have had a terrific experience with Forsyth and look forward to our continued partnership. Please send over anyone who would like to use me as a reference for your services.”

C.S.
Functional Ops
Private Equity Sponsor

Download The Full Case Study

A leading private equity sponsor was planning a merger of two global companies with a well-known industrial manufacturer. Forsyth Advisors was engaged to reduce risk, cut costs, and identify synergies.

$1.8M EBITDA Improvement And 34 Week Lead Time Reduction For Industrial Manufacturer

Our Leadership

James Pratt

Managing Partner

Nathan Overboe

Managing Partner

Matt Gieseking

Partner, Business Development

Sonja Hordvik

Chief Operating Officer

Oscar Owens

Vice President, Diligence

First Phase Cost Savings

100 Days Of Works + $100,000 Investment = $1,000,000 Execution-Ready Savings

Take the next step toward 10x ROI by scheduling a short consultation today. Our results are proven and worth a 15 minute conversation with one of our strategic sourcing advisors.

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