Case Studies

Mid-Sized Food Manufacturer

Problem: Client lacked a coherent manufacturing cost management program; production department was not held accountable for productivity results, existing cost reports were viewed as inaccurate and not credible.
Solution: We formed a cross-functional team to improve the accuracy of the bill of materials in client’s cost system, established appropriate standards for yields and efficiencies, and designed cost performance reports that met client’s needs. We worked with client’s president, VP of Finance and plant managers to make them more fully aware of the cost opportunities and issues, and influenced adoption of a more performance-oriented culture, right down to the factory floor.

Smaller Scale Food Manufacturer

Problem: Client lacked understanding of costs on a product-specific basis, and could not identify which products were enhancing profitability and which were holding him back. Client also lacked a system for identifying when it was desirable to initiate price increases in light of increasing costs for his key purchased commodity, running the risk of future margin erosion.
Solution: We worked closely with client to build an accurate and easy-to-use model of costs and profitability for at least one representative product from each product family. This provided a basis for client to take action and raise prices for some products while delisting others where the gap between needed and actual pricing was insurmountable. We trained client on using this model on a continuing basis to inform future decision making as prices for his key commodity continue to be volatile.

Pallet Manufacturer

Problem: Client had extremely accurate monthly p&l statements, but wanted a deeper understanding of profitability for new, recycled and remanufactured pallets, as distinct product lines, to inform product pricing decisions and identify where to set salesman commissions.
Solution: We worked collaboratively with client to break variable and fixed manufacturing costs back to the three lines of pallets, quickly coming up with the gross profit figures that underscored the differentials for new, recycled and remanufactured pallets. Client finalized the appropriate commission structure of a newly hired salesman, assuring they were focused on the most profitable business line, on the very day our final report was reviewed.

Pre-School

Problem: Client was looking to expand their unique pre-school business to additional locations but had not been able to model the financial consequences and investment needed to do so. They had accurate monthly and quarterly financial statements for their existing operation.
Solution: We carefully studies client’s existing financial statements in order to be able to build an accurate and easy-to-use model to project the results from expanding into additional locations. Client funded the opening of their next location with greater confidence about the financial requirements, given the favorable cash flow aspects of school operations, and the inherent uncertainty concerning first year site utilization. We are continuing to work with client to use the model as the basis for future business planning.

Private equity firm – strategic plan for portfolio company

Problem: Private equity firm wanted to have strategic growth plans in place before it completed acquisition of a family-owned dairy products manufacturer with strong local share-of-market. The current owners’ growth plans for the business were not viewed as credible by the acquiring Private Equity firm, as they were not supported by syndicated market research nor by financial analysis of strategic alternatives.
Solution: We obtained the needed syndicated market research to understand the market opportunity, trends and competition in the dairy products firms’ existing and outlying markets. Store checks validated these conclusions while giving us a deeper understanding of the opportunities. We assigned dollar values to each of the strategic alternatives to support our recommendations, which were highly valued by the private equity firm, as it gave them a roadmap to enhance the value of their soon-to-be-completed acquisition.

Located in New York, doing business nationally

Rudofsky Associates - Business Consultants
David@RudofskyAssociates.com