A Leading Parcel Services Company

The Situation   Running a huge loss equal to 20% of turnover. Intense competition from other players. Very poor service levels leading to drop in turnover. Drop in turnover of core parcel service business. Lack of clarity on long term strategy - various diversifications were being tried out with limited success. Dependence on many large customers where we have low pricing power and need to offer significant credit . Lack of financial control on around 300 branches spread across India. Lack of control on cash flow as collection and payment was occurring at all locations. No control on the operations of own lorries due to rigid driver union.

The Solutions & Results   Increased service levels to best in industry. Year on year growth of 25% over the last 3 years. Established clarity throughout the organisation that the core parcel service business was highly profitable and could be expanded. Focus on small clients who are willing to pay appropriate prices and ready cash. Centralised cash collection of most branches and re-established financial control. Implemented proper monthly financial reports by the 15th of the next month from all branches. Faced down the union and re-established control on the operations of the lorry section. Closed down unviable branches and put up new branches in potential towns. As a result of these initiatives the client's profit went from -20% of turnover to +20% over a period of 6 years while turnover grew by around 100%.

A Leading Publishing Company

The Situation   Running a huge loss equal to 10% of turnover. Diversification into magazine printing was a huge loss due to high magazine returns and dependence on big agents. Huge sales outstanding of upto 12 months with large institutional clients. Intense competition from newspaper publishers who were targeting the high volume markets.

The Solutions & Results   Redefined the business model as follows - cash and carry, direct sales to retail outlets and customers, focus on low volume products etc. Converted most sales to ready cash - currently servicing 900 retail outlets. Exited from nearly all high volume institutional business while managing to maintain overall turnover by developing non-institutional business. Set up 800 small agents for distribution of magazine on ready cash basis with minimum magazine returns - offered additional profitable products through this channel. Developed and launched more than 15 low volume profitable products in the market. As a result of these initiatives the client's profitability went from -10% of turnover to 20% of turnover in 2 years.

A Small Scale Atta & Maida Manufacturer

The Situation   Highly commodity oriented business with a very low profit margin. Average sales equal to 40% of production capacity . Around 1.5 months of sales outstanding. Selling to around 200 retail/wholesale outlets in 4 districts using own salesmen and spot hired vehicles . Business running at a loss as breakeven was at 90% of production capacity. Working capital gap equal to 1 months sale Competing with very large competitors who are 10x to 20x the size of the company.

The Solutions & Results   Redefined the business model as follows - ready cash sales, direct distribution to retail outlets, focus on service, market penetration. Increased retail outlets from 200 to 1200. Expanded operations to 7 districts. Reworked breakeven point to 50% of production capacity - running at an average of 60% currently. Planning to expand operations to 10 districts and service 2000 retail outlets . Planning to forward integrate into value added products to improve profitability. As a result of these initiatives the client's profitability went up from -5% of turnover to +5%.

A Leading Door Manufacturing Company

The Situation   Selling exclusively to big distributors and builders ie institutional market. Declining margins. Intense competition from large and small competitors. High sales outstanding. Low realisation due to heavy bargaining by large customers . Imminent entry of multinational manufacturers. Heavy debt caused by investment in machinery and working capital.

The Solutions & Results   Redefined the business model - focus on retail market, set up exclusive franchisee stores, direct delivery from factory to customer site, ready cash sales, made to order doors, order to delivery cycle of 7 days, ability to service even single door order economically. Designed and implemented a unique franchise model system. Setup 70 exclusive franchisee stores mainly in North Kerala within 15 months and are in the process of putting up another 80 stores in South Kerala. Redesigned distribution system to handle even single door delivery to customer site economically. Redesigned factory system to handle even single door manufacturing within a lead time of 4 days and offer more than 60 varieties of doors to customers. As a result of these initiatives the client's turnover in the retail segment is now equal to 50% of the institutional segment, and will increase to 100% within a year.