How a portfolio company achieved operational excellence & expansion

The Struggle: Navigating Multiple Challenges Simultaneously

A portfolio company was undergoing a significant transition—moving to new ownership, merging with another business, and expanding its facilities. The leadership needed to maintain operational continuity while managing integration challenges. Meanwhile, labor and overhead costs were increasing, straining profitability. The company was dealing with the following challenges:

• They had recently been acquired by a private equity (PE) firm and were merging with another portfolio company, requiring seamless operational integration.
• Rapid growth demanded a facility expansion, but inefficiencies in labor structure and inventory management threatened to escalate costs.
• A $4 million automation investment was under evaluation to boost productivity, but the return on investment (ROI) for various options remained unclear.

The company lacked a structured approach to facility design, staffing, and inventory flow. Without a clear strategy, inefficiencies would persist, limiting scalability. They needed a way to “wipe the slate clean” and rebuild operations in a more structured and scalable manner.

The Turning Point: A Data-Driven Approach

Recognizing the challenges, the company engaged the Elliott Davis advisory team to develop a data-driven operational plan. The focus shifted to facility redesign, process improvement, and integration of automation with labor strategies. Elliott Davis’s approach addressed each challenge with detailed guidance, including the following action steps:

Facility Expansion & Optimization

• Oversaw a large-scale facility expansion, tripling the company’s operational footprint.
• Designed new layouts using AutoCAD to maximize space utilization and workflow efficiency.
• Introduced process improvements to streamline production and reduce manual inefficiencies.

Cost Reduction & Staffing Efficiency

• Addressed labor inefficiencies by introducing process improvements and alternative staffing models.
• Provided oversight on vendor selection, guiding cost-effective and scalable solutions.

Seamless Integration with New Ownership

• Supported the management team post-acquisition to align operations with the new merger partner.
• Standardized inventory tracking and pick paths within the enterprise resource planning (ERP) system.

The Resolution: A Scalable, Efficient, and Future-Ready Operational Model

By implementing operational best practices, the company successfully scaled while reducing inefficiencies. Labor costs stabilized and automation was fully integrated into daily operations. Achievements included:

• Implemented bespoke inventory strategy, reducing order fulfillment times.
• Streamlined ERP processes to improve inventory management and procurement strategy.
• Reduced overtime year-over-year as a percentage of sales due to operational improvements.
• Improved facility design, supporting long-term growth and operational scalability.

The Elliott Davis team helped streamline operations while supporting the integration process, resulting in a seamless strategic transition. With an enhanced operational structure, the client was well-positioned for sustained growth and success under new ownership.

The information provided in this communication is of a general nature and should not be considered professional advice. You should not act upon the information provided without obtaining specific professional advice. The information above is subject to change.