ABI REVAMPS BUSINESS & OPERATIONAL MODELS OF AN INDUSTRIAL MANUFACTURER
An SME engaged in manufacturing and servicing of industrial parts in India. Started by a first-generation entrepreneur, within 15 years of its existence, the Client grew impressively on the back of its high-class engineering technology and end-to-end solutions, customized to client’s specific requirements.
SCOPE OF WORK
In recent years, the company started growing slower than its industry peers. The problem was compounded by the drop in its operating profit margins.
The Client was looking to transform the company from family-run business to professionally run business and strategic overhauling to propel itself on a sustainable and much-more predictable higher growth trajectory. All these with an aim to eventually going for listing on stock exchange.
- ABI conducted a holistic and deep-dive analysis of the client’s existing business, growth strategy, product & services portfolio and technological prowess vis-à-vis the industry trends, competition and opportunities in domestic and export markets
- Put specifically, ABI designed & implemented transformation around six specific areas:
- Accelerate growth and explore international business expansion opportunities
- Productivity & cost optimization to enhance the margin profile
- IT & Digital transformation initiatives to exploit emerging growth channels and realize costs efficiencies
- Human capital transformation, with succession planning
- Effective corporate structure and incorporating the ‘Best Management Practices’ of a professionally run organization
- IPO readiness assessment and implementing necessary changes, including corporate governance framework
- ABI deployed a multi-disciplinary team of domain experts and consultants comprising:
- A strategic consultant to study existing business, competitive dynamics, growth opportunities etc. to identify and quantify various strategic options available to the company
- A financial consultant to closely work with strategic consultant, technical and HR experts to assess financial feasibility through rigorous cost-benefit analysis
- A technology transformation expert to study global best practices and visualize the key components of the proposed digital transformation in business and operational domains.
- A human capital transformation expert to understand current capabilities and the capability required for future, design and implement organizational structure, provide clarity on roles & responsibilities across levels, revamp talent management practices and create effective succession plans
- ABI team followed its five-stage business transformation framework with effective engagement
- Defined the future of the industry – industry attractiveness and profit pool across the value chain – based on key macroeconomic and technological disruptions around the industry
- Review ‘As Is’ business performance & inefficiencies thereof
- Opportunity assessment with deep-dive analysis & benchmark to identify improvement areas
- Defined “To-Be” business and finalized strategic goals and business plan for transforming the business
- Implemented – working with the company management and key stakeholders – transformation initiatives as per the prepared business plan
- Within one year, the Client was able to grow its existing business by 40%
- The Client entered into JV partnership with two international corporations – to boost export in the Middle East and North American markets, these will enable the company to become 3X in terms of revenue within 5 years
- Within one year, the operating margins improved by 12% points with much better cash conversion cycle. Ongoing transformation and automation initiatives are expected to further enhance the margins
- The Client has attracted professionals to run key strategic business functions with clear mandate and professional performance evaluation as the cornerstone
- Decentralized decision making with proper checks-and-balances means faster decision making, with positive impact on growth and margins