Almasy Consulting: Case Experience
Operations Restructuring

















The following case descriptions provide details of key questions, issues and challenges that faced our clients. The level of the sponsoring client is indicated. Specific outcomes are provided where possible and when not in conflict with client confidentiality.

Dairy Cooperative – CEO and CFO
How did the second largest turkey processor and marketer in the U.S. limit market risk and overcapacity cycles? How would alignment of growers’ contracts, chick placement, delivery systems, and production schedules permit flexibility while maximizing shareholder profits? Outcome: The project developed a new approach for managing contracts and matched it to an early warning planning system that allowed for rapid changes. Volatile swings in pricing were eliminated.

Forest Products Firm – Group President, VP, Sales & Marketing
Could a century-old West Coast forest products company remake itself from a regional, production-driven forest products company into a national, marketing-driven consumer products company? Outcome: Over a fourteen year period, provided strategic planning services to the company's Flexible Packaging, Non-Woven Fibers, Canadian, Chemicals, and White Papers divisions. Work consisted of strategy development, executive training, market research, pricing projects, new product development, and operations reviews.

Recycling Company – EVP, Operations
Could the world’s largest recycling company redesign its factories to improve productivity and throughput? How would a semi-literate workforce respond to major changes in production layout? What was required of suppliers to ensure that supply chain and production worked together efficiently? Outcome: The project created a new production system incorporating altered layout, visual tools, and new performance measures. Supplier material flows were moderated by new planning tools and logistics programs. Both throughput and output increased 15-25% over the next eighteen months.

Graphics Firm – EVP, Printing Operations
How could diverse printing operations assembled through acquisition be rationalized and made more cost-efficient? Was there any benefit to national scale in printing to justify size? Outcome: The project identified several elements including sales, marketing, equipment purchase, and distribution that lent themselves to scale. At the same time, the project showed that individual printing plants required focus on customers and print type to be most successful.

Family Investment Firm – CEO, Controls Division
How would an Italian family venture business in North America and the United Kingdom rationalize its industrial and aircraft components business and establish key strategic positions with different distribution channels? Outcome: The project investigated tradeoffs between manufacture, importing, and distribution/resale to determine which fit best with overall family objectives, risk profile, and corporate strengths. Parts of the business were divested as a result of the work effort.

Fertilizer Cooperative – CEO
Could the largest fertilizer production company west of the Mississippi restructure itself and rebuild its production and distribution operations? Outcome: The project allowed VNP to come out of bankruptcy with an intact business by downsizing the company’s plants from five to two and increased the number of distributors by 250 percent.

Industrial Gas Company – Division Executive
Were there economies of scale in each customer call? Could revenue per sales be maximized or distribution expense dollar be reduced by providing the broadest range products/services with each delivery? Could the "drop ship" load be considered a key element of logistical strategy and distribution profitability? Outcome: The project developed a set of optimum drop shipment sizes for different customer segments. It also designed a new set of customer tankage and distribution vehicles. A new marketing and sales approach was developed for multi-product customers.

Abrasives Company – Division Executive, Coated Abrasives
How could the world’s largest supplier of coated abrasives (i.e., sandpaper) repel both large and small competitors who were undercutting its prices? What would be needed to keep channels of distribution loyal? Outcome: The project analyzed product costs and determined that average costing was responsible for the competitive pricing successes. A new pricing scheme based on actual costs was implemented which counteracted the problem. Also, as a result of the work, 8,000 products (out of 14,000) were dropped as uneconomical. Profitability and market share were restored.

Turbine Manufacturer – VP, Procurement and Purchasing
Would the second largest manufacturer of utility turbines in the United States be able to determine whether pricing had been competitive from the suppliers of its rotor castings (the largest cost component in turbine generators)? Was there a way to benchmark pricing for similar products and enforce market discipline? Outcome: The study created a system for checking castings prices against both similar products and industry cost trends. This system helped the company select the best supplier for each generator built.

Process Controls Company – VP, Sales
Would the second largest supplier of industrial process controls for refineries, power, manufacturing, and paper plants be able to displace its primary competitor? How could a new sales organization support this effort? Outcome: The project included an evaluation of distribution and selling methods for both companies and recommended organizational changes. The company was able to reestablish itself as the number one supplier of process controls.

Canadian Bank – EVP, Marketing and VP, MasterCard Division
How could one of Canada’s largest issuers of MasterCard credit cards create a closer and more profitable relationship with its customers? What were the tradeoffs between annual fees and interest rates in determining customer value? What changes in card processing, direct mail campaigns, and customer service were needed to support an enhanced CRM program? Outcome: The project generated detailed information on differences in customer segments and their respective cost/value. Targeted direct mail solicitations were tested with different combinations of offers until the core set of "products" was developed. During these tests, the processing and service operations were taken through change management programs until they were comfortable with the new approach. Card profitability increased by over 25%.

Newspaper Publisher – EVP, Financial Services
How could the world’s most successful financial news organization grow its computer software business, expanding both the number of products carried and customers served? What new product areas would be most profitable? How could the firm develop the necessary infrastructure to serve a broader set of customers? Outcome: The project team structured and negotiated a strategic alliance with a software developer who was also able to offer a new channel of distribution for consumer financial and information products. This organization was contracted to build a high level PC accounting software package. A set of 5 accounting products was developed, tested, and delivered. Although the software was completed on schedule and well received in customer tests, the company abandoned its investment in software.

Financial Conglomerate – Executive, Commercial Credit
How could one of the largest chains of credit offices determine whether there were economies of scale in commercial lending? Would it be able to create a strategy for its distribution network of branch offices, leveraging cost advantages that better geographic market share provided? Outcome: The project provided a careful cost analysis of branch economics. It determined the advantages of scale by expense category and function. It also laid out a plan for trimming non-performing branches and focusing geographic growth plans.

Paper Distributor – VP, Industrial Packaging Division
How could one of the leading distributors of paper broaden its market definition to include packaging supplies and equipment? Assuming a dominant share position was possible, what new logistics organization was necessary to link five quasi-independent merchant houses? Would a single brand name help centralize sourcing and distribution functions and increase overall margins? Outcome: The project identified substantial cost savings that had been missed when each branch purchased on its own. Consolidated purchasing produced an increase in gross margin from 18% to 19%. The reorganization of the branches under a single name yielded additional cost savings in overhead, distribution, and marketing costs.

Food Company – Division Executive, Processed Foods Division
Could a logistics system designed in the nineteenth century and built around old shipping concepts be redesigned to take advantage of new transportation flows and systems? Would the freight-adjusted pricing system that created competitive disadvantage on the East Coast reflect actual cost structure? Would customers accept the new pricing system or switch to competitors? Outcome: The project created a new structure of pricing regions and an algorithm for setting terms, conditions, and shipping charges. The impact on all major customers’ net profitability was analyzed and their reaction to the new pricing forecast. The pricing approach was accepted by the industry at large and accounted for a significant increase in divisional profits.

Office Furniture Company – CEO
How could the world's largest office furniture company serve small business customers who wanted rapid delivery of off-the-shelf office furniture products? Could a logistics system be designed with a distribution partner that guaranteed 48-hour turnaround? What constraints, measurements, and contingencies would need to be built into such a partnership that could ensure that the company’s objectives were met and that long term strategies were not compromised? Outcome: The project included analysis, program development, pricing, and negotiation with the distribution partner, who was selected to provide national coverage for the 250 high volume products, some of which were outsourced. The launching of this initiative enabled the company to serve an entirely new set of customers with a complete different supply chain and product set.

Petro-Chemicals Firm – President
How could the integrated explosives and fertilizer operations of a large oil company be optimized for both of these diverse markets? Was the long term growth potential of both businesses worth further investment? What economies of scale were required to be successful? Outcome: The project evaluated the nitrogen/nitrate integrated production operations and recommended breakage of the integration model. The team developed a completely new way of procuring raw materials that permitted the resulting sale of the company’s ammonia plants. The company was able to remain in the top three explosives suppliers in North America.

Canadian United Way – CEO and Board of Trustees
Could the United Way buck the trend of rapidly growing designations (money contributed but designated to non-United Way agencies) by offering greater value to its donors? What was required to create an effective Donor Relationship Management (DRM) program? What would the new systems, process, and training cost? Outcome: Despite designation levels throughout the United Way system that exceeded 25%, the adopted program enabled the United Way to reduce its designation levels from 19% to the present 14%. The DRM program identified specific donor segments and established guidelines for working with each of them. Recommendations were made to the Board to increase the expense ratio from 11% to 13.5% to pay for new systems and hiring. The Board approved the increase and the program has been pronounced a singular success.

Blue Cross/Blue Shield – CIO
How would the largest non-profit health provider in Missouri deal with rapidly growing needs for information technology? Could economies of scale be achieved by linking with similar organizations in adjacent states? How would a vendor be selected if the systems function was outsourced? Outcome: A two day management session was used to determine the nature and level of capacity needed within the information systems area. Following the development of a plan, discussions were supported which included negotiations with potential outsourcing partners and other healthcare affiliates. The IT foundation helped support the organization’s creation of a for-profit status subsidiary.

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