Case Study
Private Equity Owned $2.5B Flexible Packaging Producer Uses Newly Designed Order-to-Cash Process to Deliver $21M EBITDA Improvement in Economically Depressed Marketplace
$21M
EBITDA Improvement
Strategic Imperative
To create a consolidated business model and integration process that results in a performance-driven culture, increases revenue generation by 4.5%, and drives EBITDA to 15% across all business P&Ls within 12 months
Client Background
- $2.5B producer of flexible packaging for a wide variety of consumer products across multiple end markets
- North American footprint included 18 production facilities across the U.S. and Canada
- Order-to-cash performance depended on SIOP, customer portfolio quality, pricing, unit costs, and operating standards
- Three independent companies had been consolidated to create a single larger business entity
- Private investment ownership and new state-of-the-art assets increased pressure to meet ROIC objectives
- Economically depressed marketplace created urgency to improve revenue generation, EBITDA, and performance-driven culture
Key Issues & Barriers
- Cost and margin controls lacked key management components required for consistent profitability improvement
- Management had not achieved targeted EBITDA established during acquisition deal pro-forma development
- Acquired company cultures retained “mom-and-pop” lineages that conflicted with larger-company operating requirements
- Leadership team capability required significant development to manage the consolidated business model and integration agenda
- Financial unit-cost standards were not directly linked to operational standards, contributing to pricing issues
- Customer portfolio mix included lower-margin revenue contributors that weakened revenue quality and EBITDA attainment
Key Implementation Components
- Fully upgraded SIOP infrastructure to support consolidated planning, demand alignment, and performance management across facilities
- Rationalized customer portfolio toward higher-margin revenue contributors to improve revenue quality and EBITDA performance
- Linked financial unit-cost standards directly to operational standards to improve pricing discipline and margin control
- Upgraded operational standards to optimized levels across the production network and consolidated business model
- Linked operational and revenue models to drive EBITDA attainment across all business P&L facilities
Benefits & Results
$21M
EBITDA Improvement
15%
EBITDA Attainment Across 18 P&L Facilities