| Creating integration toolkit for an international engineering company |
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Engineering company started to grow service business by acquiring local service companies in different parts of world. Challenge was to execute several integration processes simultaneously with limited number of experienced resources. We created with our client an integration toolkit that includes description of targeted situation after integration (blueprint) and detailed task list and time plan. With toolkit, our client can execute simultaneous integration processes successfully with local resources that do not necessarily have any prior experience of integrations.
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| Defining a business planning process |
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Our client wanted to replace existing, diverse planning practices with a new uniform planning process across different businesses. As an outcome, a business planning process, both meeting the diverse needs of the client’s multi-business environment and the requirements of the financial management, was defined. In the future, business areas may focus on, for example, customer or investment planning and financial forecasts will be derived from these plans. As a part of the project IT system provider for the new planning process was selected and now the project is progressing through a pilot to a final implementation.
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| Design and development of optimal personnel structure and resource planning mode |
Weakening demand had set a profitability challenge for the client company. Faced by this challenge the corporate management set a significant saving target in order to maintain profitability. The client decided to launch a project to determine the optimal personnel structure and to develop a resource planning blueprint. The objective was to ensure permanent savings.
The first phase of the project consisted of studying the current state of the personnel and cost structure and developing a resource planning blueprint for each unit under the project scope. After specifying the present situation, the central rationalization possibilities were identified and their financial impacts estimated. The rationalization possibilities were validated and prioritized with cooperation with the client company’s management as well as with the experts in the field. Based on the prioritized rationalization possibilities a new personnel structure was defined, which was concretized to new shift schedules on the unit level. A new centralized planning process was defined for the blueprint, containing both the long-time frame planning and the short-time shift scheduling. The responsibilities for centralized shift planning organization and local units were described and the follow-up process and instruments defined.
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| Design of profitability improvement guidelines for a wholesaler |
The client had chosen the rationalization of customer and product portfolio to be the approach for profit improvement project. The objective was to recognize the unprofitable businesses, to reduce complexity of the portfolio, cut down fixed costs and release working capital. Pricing was the tool to rationalize the business portfolio; unprofitable customers and products would be transformed into either profitable via price increases or removed from the portfolio.
August conducted a study of portfolio profitability to provide a solid basis for rationalization. The results were examined in-depth with the client company management. As a result, a concrete action plan was formulated, constituting of detailed guidelines e.g. for price increases, changes in the payment terms, product rationalization and fixed cost reduction. A significant profit improvement potential was recognized. In addition, tools to sustainable reduction of working capital were created. Efficient management of working capital is essential also after the economic downturn as the need to finance the growth is significantly smaller when volumes and prices start to recover.
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| Development of controlling function in an international processing industry company |
Global weakening of demand forced the management of a client company to react to the profitability decline by also cutting fixed costs. As a part of the support function streamlining project, the quality of the controlling function was decided to be improved in order to provide management with enhanced business support.
Controlling function was designed in accordance with top management to support business structure and decision making in different positions and management forums. Current controlling processes and their time requirements were thoroughly studied by demonstrating the bottlenecks and identifying the required development actions. Eliminating or streamlining non-value-adding reports and tasks enabled personnel reduction and also released controllers’ time for more crucial tasks from profitability management perspective.
Controlling organization was transformed from a line organization into a functional one. Controllers were positioned to the business organization and roles were redefined to cover the most important management dimensions. Furthermore, key competence requirements for different controlling positions were defined to give concrete guidelines for capability development.
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| Development of new inventory concepts for an international paper company |
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The project’s objective was to create actions to increase market share and profitability in core markets. The main challenge was the distance between production locations and main markets. The solution was to create a new service and inventory concept for a rationalised product offering. Concept roll-out to other markets was achieved with the customer’s own resources.
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| Expansion strategy formulation for Asian markets |
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Our client wanted to strengthen the company’s position in selected Asian markets. The project started with the screening of customer needs and competitive landscape in China and other focus countries. The next phase was the identification of alternative market entry strategies. The identified models were evaluated based on benefit potential and other qualitative / strategic considerations. Detailed business case together with a pragmatic implementation plan was developed for the selected model. Client’s Board of Directors approved the proposal and implementation was begun immediately after the project.
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| Financial steering development in a metal industry group |
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The client’s financial steering model had deficiencies that did not allow efficient operative steering of the business units, complicated the accounting process and decreased the quality of investor relations. We defined alternative structures for a new financial steering model, and modeled the effect of selected alternatives on division and business unit sales and operative results. This provided the client with a platform to use in further financial steering development.
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| Implementing multi-dimensional profitability measurement system for an international paper company |
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Customer needed more accurate profitability information to support strategic and operative decision making. We designed a costing model where actual costs and capital are assigned to products in each production phase and distributed further in chain based on material flow. Profitability is measured against external sales and can be reported by, for example, product, customer, country and mill. System enables profitability management in all relevant management dimensions and forms a backbone for business steering.
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| Production network optimization for an international chemicals company |
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Our client company was evaluating an option to invest in building new production capacity. The company board required management to present further analyses regarding the product network rationalization options the investments would enable. August developed fact based analyses and scenario models of the development options' financial potential and logistical feasibility. Based on the analyses, the investment was accepted by the company board.
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| Turnaround program of an engineering company |
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Our client company had grown rapidly through the 80's and 90's. In 2001, the market collapsed and sales and profits declined dramatically. As the market did not recover, the company was facing a heavy restructuring and rationalisation phase. The company structure and management model was renewed to improve profit responsibility. Strategy was adjusted and operative models harmonised. Today, the company is back on growth path and making good profit.
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| Vertical profitability model implementation for an international metal industry company |
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Our client’s challenge was a lack of cost and profitability understanding of its complex value chain. Vertical profitability information was required to support strategic choices. We designed a model which provided transparency to cost and capital build-up throughout the value chain. After the design phase, implementation was supported by August in several implementation areas, such as the design of continuous reporting of vertical profitability and the development of best utilization practices. Implementation aimed at early utilization of the results e.g. in strategy processes. To enable this we trained the client’s global controller community to utilize the new profitability information and supported them in on-the-job learning. These change management and competence development initiatives were critical to ensure sustainable changes in the ways of working. Once fully implemented, the vertical profitability model enabled advanced business steering, i.a. in setting of financial targets to an integrated organization.
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