Case Studies

Operations Turnaround Improves Profitability for Pet & Garden Product Distributor

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Home·Operations Turnaround Improves Profitability for Pet & Garden Product Distributor

The Situation

Pet and Garden Product Distributor. $175 million in sales. $25 million debt. Distributing to companies in 24 states from 2 distribution facilities. Over 30,000 SKUs.

  • Family-owned company that had recently seen margins squeezed and profitability reduced.
  • The company had relocated part of the warehouse to a new facility to improve operations. Unfortunately, the change had the opposite effect, and delays had become frequent.
  • Deliveries were delayed or cancelled as a result of the warehouse issues. The inventory replenishment shuttle, which transfers products between the two distribution facilities, is inefficient and expensive.
  • Delivery routes were not optimal due to customer demands and the expansive network of customers in multiple states.
  • The owner was seeking a strong management team but had struggled to find the right individuals.

How We Advised

Our experts met with management to fully understand past decisions that were affecting profitability.

  • Hired as Interim COO to address operational issues and help implement change.
  • The warehouse layout was revamped, with high-velocity items relocated closer to the staging area to enhance efficiency.
  • Recommended adding 25% of additional racking to minimize new facility difficulties and to rearrange inventory at the new facility.
  • Reviewed operations of the warehouse, sales department, and processes, as well as trucking and logistics operations.
  • Analyzed customer and item profitability.
  • Recommended implementation of new delivery routing software to handle the complexity of distribution to multiple states with a large customer base.
  • Our team identified $5 million in cost savings.
  • Our team oversaw a layout change in the warehouse to enhance picking operations, reduce delays, and improve efficiency.
  • Identified unprofitable customers and set up minimum requirements, including delivery size and minimum margin.
  • Identified obsolete SKUs and worked with the client to eliminate SKUs to increase inventory turns, improve cash flow, and improve warehouse efficiency.
  • Determined trucking improvements that condensed routes, reduced the number of units needed, and improved efficiency in delivery.

Key Contact

Dan F. Dooley, CTP 
Senior Managing Director 
Strategic Advisory Practice 
+1 603 660 8952 
[email protected] 

Related Practice Areas

> Turnaround and Restructuring Services 
Navigating the many challenges confronting a company in transition requires an operationally focused approach that looks beyond the balance sheet to minimize further degradation and build a path to sustainable growth. Drawing upon decades of experience in the turnaround space, we help companies in transition identify practical strategies to improve profitability and liquidity for immediate relief, while concurrently developing and executing a comprehensive turnaround plan for long-term, sustainable value creation. 

 

> Chief Restructuring Officer (CRO) and Interim Management Services 
Our experienced C-suite interim executives advise and support companies in financial distress, experiencing hypergrowth, or that are challenged by critical vacancies among senior leadership. Whether the leadership void results from operating challenges, a recent officer resignation, the need for added support during busy periods, or during an extended job search for the right permanent hire, our experienced executives provide immediate relief and value. 

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