An EGI Advisor was hired by a PEG in the initial stage of investing in a building supplies business to serve as interim President and Board member of one of its portfolio companies when the incumbent President experienced health issues during the acquisition process.
EGI’s Advisor immediately focused the management team on fundamental business opportunities to improve profitability, including creating and responding to margin analysis and customer segmentation evaluation as well as taking selective price increases. The EGI Advisor also brought in an Industrial Engineer from EGI to introduce Lean manufacturing techniques, while attacking weak information systems that were placing artificial constraints on the Company. The customer service system was redesigned to be more customer-friendly, to decrease order entry and manufacturing errors, to lower process time, and, importantly, to facilitate expanded real-time pricing. The production control module was enhanced in conjunction with optimizing manufacturing layout and production flow to boost productivity and minimize throughput time. Also, the inventory control module was modified to dramatically reduce raw material and work-in-process inventory.
The EGI Advisor positioned the Company for success by sharpening its focus on sales opportunities, re-designing business systems and processes, and redirecting IT development. As a result, the Company was successfully divested to a strategic buyer in 13 months, at a triple-digit ROI.