Turn Works, LLC is a company that focuses on leading operational turn around efforts and crisis and interim management engagements. Turn Works enlisted the support of Amelioration Incorporated to support a mid-sized manufacturing company in achieving its goals for achieving a new balanced plant layout that incorporates additional operational efficiencies through the application of Kaizen/Lean process improvement. The target company consisted of 74 employees and had roughly $25M in gross annual sales.
Prior to engaging Amelioration Incorporated, Turn Works had been tasked by a private equity firm to evaluate the necessity of acquiring additional facilities (at a significant cost) in order for the target company to expand to meet their increasing demand. Such expansion, if not warranted, would represent an unnecessary capital expenditure and adverse impact to shareholder equity. Therefore, the private equity firm sought to fully explore maximizing the efficiency of operations within the current facility in order to maximize business value. Demand for the target company’s products was growing at a constant 13% per year and the current demand had already outpaced the current production capability by 9%.
Amelioration Incorporated’s recommendations identified how the target company could meet increasing demand within the current facility and dramatically reduce inventory, labor, and scrap costs.
Conservatively, Amelioration Incorporated’s recommendations were worth in excess of $2.3M per year in additional net revenue to the target company, representing an annual return on total fees and expenses paid in excess of 4,850%.