SITUATION
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- $650 million business resulted from acquisition of animal health units
of five global pharmaceutical companies over four years
- Operations consisted
of 21 manufacturing plants in ten countries, six R&D
operations in four countries and country businesses operated independently
- Strong
brand equity was offset by lack of strategy, improper investment decisions,
fiefdom culture and generally weak management
- After significant losses versus
profit projections for three consecutive years, parent inserted a new CEO
charged to turn company around
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RESULTS
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- In 100 days operations and organization blueprints were agreed upon
and implemented
- 15% of total employees were reduced
- A $50 million new manufacturing
site (emerging technology not commercially viable) was closed prior to
its completion and commissioning
- Over the next nine months the balance of
the rationalization plan was implemented resulting in the closure of 13
manufacturing sites, seven distribution centers and five R&D centers,
and a reduction of an additional 20% of the workforce
- Annual revenues dropped
to $600 MM, but pre-tax profits of $55 MM in the first year and $65 MM
in the second year were achieved
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ACTION TAKEN
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- Streamlined product offering and rationalized customer base
- Developed
and implemented regional shared-service support functions to replace inefficient
country structures
- Consolidated R&D and structured capabilities around
a focused product development strategy and project management process.
Implemented multiple plant productivity initiatives requiring no capital
investment
- Consolidated manufacturing into eight best-practice facilities
organized by core competency, with each serving global demand. Outsourced
manufacturing of non-core products
- Rationalized distribution facilities
maintaining and/or improving customer service levels
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