Consumer goods product manufacturer and distributor
Primary channels: Regional and national brick and mortar stores
Secondary channel: On-line
|
|
Year 1 |
Year 2 (YOY) |
Year 3 (YOY) |
|
Sales % |
100% |
-2% |
-14% |
|
EBITDA % |
100% |
+31% |
-161% |
Year 1
- Outsource high labor cost finished goods to China
- ERP implementation to manage supply chain
Year 2
- Realize standard cost reductions
- Reduction in force
- Lead times for finished goods nearly triple
- Minimum order quantity necessitates increasing and using more of line of credit
- Acquire more warehouse space
- Defective product is found as large lots are broken down for packaging and shipment
- Customers begin reducing their purchase split as On-Time-In-Full (OTIF) performance declines
Year 3
- Obsolete and Slow-Moving Inventory (OSMI) increases
- Warehouse labor increases
- In house manufacturing ramps up to fulfill order shortages
- Overall labor costs have increased to over original base case
- Warehouse space increases
- Debt increasing
- OTIF performance decreases
- Bankruptcy
Year 4
- Business sold to multi-national conglomerate for the complimentary brands
- Final reduction in force and asset liquidation
- You can buy these products now, probably have some of them in your house today, and never knew the story
- Was all this worth it?
If you would like to request a listening session for your business, you can contact me, Bob Jeske, by email at bjeske@sbtimail.com.