Company Overview
The Company sells lumber, building materials, and hardware store items to individual customers and contractors, from three locations.
Engagement Overview
Due to a reduction in new housing starts and new competition from “big box” competitors, revenue had declined sharply and resulting losses forced the over-leveraged Company into an over-advanced position.
The Company also experienced management turnover, accounts receivable collection problems, excess inventory, inventory shrinkage and inefficient administrative operations.
FDP implemented numerous changes in the business, resulting in an immediate, short-term profit improvement of $400,000 that eliminated the reliance on the seasonal over-advance.
These actions included:
–Operational restructuring;
–Significant downsizing of one location;
–Pricing increases; and
–Information systems implementation.
Cash flow was improved significantly through closer inventory and accounts receivable management.
Results
Over a longer period of implementation, the Company has profitably grown based upon FDP suggested changes implemented in sales force management and new sales strategies.
Fort Dearborn Partners continues to provide ongoing advice and support to management.