Production near Shanghai, 300+ staff, 270 mio. revenue

 

SYMPTOMS
  • No profit for 3 years despite strong increase in the products globally.
  • Heavy investment in a new factory to attempt meeting twisted market reports.

ROOT CAUSE

  • Trusted manager, employed from startup, controls finance, HR and IT.
  • Anyone in conflict with trusted manager will be removed.
  • Investor and global management are convinced the company is 100% depending on the trusted manager.

ACTION

  • The team replaced the VP and took over purchase team for an interim period.
  • New VP assigned and permanent purchase team established.

RESULTS (selected)

  • Savings on +30% equaling RMB 15 mio. yearly, with several quality improvements.
  • Transparency and consequences of complex financing, clearly favoring personal interest.
  • Internal manager’s conflicts, and unclear responsibilities discovered and organization reorganized.
  • Lowering blue collar staff turnover of 70%, to below 30%.
  • Huge wastage from production examined and root causes identified and improved.
  • Complete turnover of logistics and external warehouse.