EGI was engaged to achieve a comprehensive company transformation of a niche ready-to-finish furniture manufacturer with nationwide distribution utilizing a dealer network serviced by a captive and co-managed transportation firm. This required addressing every line item on the P&L and Balance Sheet.
EGI implemented sweeping sales and marketing initiatives, re-launched the sales group and initiated first-time, industry-wide programs to reposition product perception from low-priced, low-cost to higher margin customizable products. This was accomplished through the addition of unique product offerings, technology accessories, additional wood species, point-of-sale programs and marketing materials to provide the Company’s dealers incremental sales. As a result of the operational efficiencies gained, the Company was also able to create a totally new product offering in just six weeks and successfully launch a test market program with a major big box retailer for nationwide distribution that would increase Company sales by over 20% in only six months.
EGI also employed an array of operational optimization techniques including its Lean Business Template; value analysis and value engineering; value stream mapping; transportation, logistics, and supply chain redetermination; systems enhancements; and business process evaluations to identify and exploit opportunities and to address struggle points. Each and every point-of-cost or inefficiency throughout the enterprise delivery system, including transportation, supply chain, and manufacturing, was examined. Based on sales analysis, marketplace considerations, and bottom-line profitability, 250 of 550 SKU’s were eliminated. The remaining products were subjected to exhaustive value engineering while considering labor costs, producibility, and customer preferences. Then the transportation and supply chain were totally reset. Nothing was left untouched or unquestioned.
All of these programs, which were implemented in under 12 months, resulted in a dramatic impact on revenue and COGS and therefore on gross profit and EBITDA in addition to liberating cash. Outcomes included:
These results not only liberated cash but also provided space for a completely new product category introduction.