The Problem: A $300 million division of a company that manufactured alumina was sold to an investment bank whose objective was to improve operations over a 3-5 year period and then resell the company. The previous owners had managed the business to a return on asset measure. The new owners wanted to hold the team accountable to profit and cash flow measures; however, the team did not know how to manage the business to those metrics.
The Solution: We were brought in to help the team understand how to manage the company to improve profitability and cash flow and get them engaged in helping the new owners improve the overall operation. We delivered our standard Financial Training program to help the team understand financial basics. We then added our Process Map activity to brake down their costs and help them identify key areas of waste in their process. After identifying areas of improvement, the teams presented proposals to their plant manager suggesting how to improve their process, reduce waste and use utilities more efficiently in their location. In addition, teams learned every aspect of the business and how much cash was tied up in each aspect of the production process. This helped them think strategically about how they can make improvements and increase cash flow.
The Result: After our Financial Training, the team learned how to manage profit and cash flow and was able to change behavior in how the business was managed. Our program and process facilitated out-of-the-box thinking that helped the team improve revenue streams while reducing the costs of handling and storing materials. Following our program, the company saved over $15 million per year over a three-year period. The team also dramatically increased their bonuses making both the team and the company better off.