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Propelling a good company into great, with 23% increase in EBITDA (CS275)




This story is for CEOs who:

  1. Want to maximize value creation opportunities and free up working capital
  2. Lack visibility into procurement, logistics, and warehouse operations
  3. Want to de-risk their supply chain

The Challenge

When PE firm asked for due diligence on a prospective add-on to an industrial distribution and manufacturing company, SGS Maine Pointe analyzed both the platform and add on companies to determine synergies and value creation opportunities. When the acquisition fell apart, we pointed out that the platform company, operating with an excellent 18% EBITDA, still had room for improvement according to our analysis.

Finding more opportunities and freeing up working capital in an otherwise successful company

SGS Maine Pointe:

  • Optimized network and footprint with operational KPIs and tools
  • Upgraded supply chain management with supplier optionality, advanced data analytics, end-to-end supply chain visibility, and strategic negotiations
  • Revamped supplier relations, while providing a roadmap to derisk and diversify supply chain
  • Matured procurement, logistics, and warehouse functions
  • Provided the tools and insights to tap additional working capital and slash costs

Lessons learned for other executives

  • Even successful companies can be improved 
  • The time to de-risk the supply chain is before problems strike
  • Greater visibility into planning, procurement, operations, and logistics improves decision making

The Results

  • $12.5M savings
  • $30.5M case improvement
  • 57% reduction in freight unload costs
  • 23% higher EBITDA annualized
  • 15% reduction in obsolete inventory
  • Reduced lead times and overall cost-to-serve while expanding into new markets and geographies

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