This expensive, time-intensive capital solution would be extremely risky in the emerging market. In a last effort to increase production before committing to the new capital, the company called in Stroud to help.
A molded plastics manufacturing company was dealing with major quality issues. Their equipment was not consistently producing good product. To compensate, employees were being moved from running production to non-value adding work to mask the quality problem by trimming flashed plastic on ready-to-ship products.
An $8 billion consumer products company was facing intense price pressure passed down through the supply chain due to increased competition from low cost manufacturers in other countries. Prices were being continually driven down and results had moved into the red. An industry expert’s report stated that “The company cannot continue to be the high quality industry supplier and remain price competitive.” Without significant cost improvements the company faced the potential for drastically reduced profits and market share.
A leading beverage producer was weeks away from cancelling their “back-to-school” product launch due to contamination in their signature product. One production line had been shut down because its cartons were consistently contaminated. Leaders felt stuck between a rock and a hard place. On one hand, now running that line meant missing “back-to-school” demand. On the other, running the line to meet demand risked contamination in a product they market to children.
Time was of the essence for a senior miner with a remote operation. After developing over 60 scenario alternatives for extending operations, the most attractive option failed to meet the investment threshold, requiring at least a 35% increase in IRR. With 4 years of initial mine life remaining, the future of the operation was in question despite a significant investment to date, a capable workforce and known developable resources.
A food and beverage company was excited about projected sales growth for one of their products and knew increased demand would soon outpace their production capabilities. They were planning a multi-million-dollar capital expansion to meet this demand which showed an attractive return. Even with this viable option on the table, leaders were curious whether an alternative existed that could meet their demand needs faster and at lower cost.
Leaders at a bio-refinery were aiming to capitalize on increasing product demand. The trouble was available feed quality was decreasing. Seeing limited opportunity to raise production with lower-quality feedstock, the leadership team was concerned that a rushed, multi-million dollar equipment upgrade may be the only option. They worried that an expensive, time-intensive capital solution would be risky if the emerging market underperformed. They brought in Stroud to help the refinery meet increased demand with their existing asset base while utilizing lower-grade input feed.