Industry:      Manufacturer-Residential Wood Windows

Size:            220 employees; 300,000 sq. ft. facility

Entity:          Non-public corporation within a holding company.

Situation:    $1.5 million in losses over previous 5 years; $235,000 loss in current year.

Findings:     Virtually no management team.

                    Inventory and cost systems non-existent.

                    Unlimited product offerings and prices.

                    6% gross profit margins.

                    No defined shipping schedule.

                    No control over credit or collections.

                    Poor cash flow and irate suppliers.

Action:         Restructured management team.

                    Standardized product line, reducing product offerings, simplifying manufacturing, and decreasing inventories.

                    Reduced cut stock from 144 different rip widths to 22 rip widths.

                    Reduced manufacturing throughput from 8 weeks to 3 weeks.

                    Implemented a cost system.

                    Simplified pricing.

                    Implemented an MRP system utilizing “pseudo” end component levels to forecast sales, manufacturing, and material requirements.

Results:       Reduced labor force 33% while maintaining production volumes, and decreasing inventories.

                    Doubled gross profit margins within 12 months.

                    Achieved break-even the next year.

        There after, consistently achieved 15.5% pretax profit margins while growing sales to  $150 million.


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