Our Spanish client established a lift design and production company within its international division in Mexico. The object of the aforementioned factory was to produce special lifts for the American market according to ANSI standards and sell products manufactured in Spain in the Mexican market. The general manager of the Mexican company was a shareholder with 25% of its share capital and is extremely sales oriented.
Although the company had been audited, DT was engaged to carry out a diagnostic of the company’s situation to more accurately reveal the company’s real state of affairs and provide precise financial and economic projections through to the end of the following year.
The diagnostics lasted one and a half months and entailed two managers relocating to Mexico and one Partner Manager working in Madrid.
After the diagnostic was completed, it was concluded that there was a significant imbalance in inventories which left practically the entire company bankrupt. However, during the diagnostic they also analysed the margins, as well as the backlog and the company’s hiring capacity, and presented an action plan which guaranteed the company’s viability with a moderate investment for employee terminations and working capital.
DT was engaged to lead this turnaround process. In order to do so, it relocated an Interim Manager who acted as the company’s General Manager for 13 months and structured the project around three phases:
PHASE 1) Workforce adjustment and internal reorganisation of duties and departments: this phase lasted four months and, for the first time, in a long time, put the monthly income statement back in the black.
PHASE 2) Consolidation of the new organisational chart and increase in sales capacity: over the following six months, efforts were focused on continuing to drive down costs by increasing productivity and the one-off hiring of new talent for the organisation.
PHASE 3) Replacement of the Managing Director was scheduled for the final three months. A support and training plan was prepared for the new managers (a new Managing Director and CFO) who replaced him.
The company ended the following year in the black and its viability going forward was proven by the new management team who kept it profitable through to its sale two years later.