Challenge
This company was facing significant financial challenges following a $4.2B net loss on revenues of $15.4B. The newly placed CEO had to take immediate steps to implement a turnaround plan.
Global sourcing lacked robust demand planning, contract negotiation, and vendor management processes and skills. More than 25 large client contracts were underperforming and had to be fixed or cut.
Global overhead cost structure benchmarked significantly higher than the Company’s peers as a result of more than 13 management layers across the organization. This was further compounded by poor spans of control.
Solution
Synergetics established a Project Management Office (PMO) and the tools to track cost take-out actions and cost savings across all business units. The team supported the CEO’s bi-weekly status updates with cost take-out progress.
- The Supply Chain teams developed and led global sourcing programs across more than ten purchasing categories, resulting in over $600M of cost reduction on $5.9B of spend
- Cost benchmarking across five overhead functions (Finance, IT, Human Resources, Supply Chain, and Legal) identified over $0.5B of cost take-out ($2.5B of cost)
- Synergetics then supported the organizational delayering and restructuring
