Improving Productivity and Profitability Within a Newly Acquired Division
After a recent acquisition of the Recovery Services business line and facing increasing industry competition,
D+H’s management recognized the need to conduct a thorough operational review. Interested in Carpedia’s methodology and wanting to conduct a holistic review of the division, D+H invited Carpedia to conduct an analysis in order to determine the opportunity for improvement. Initial studies identified opportunities to increase revenue, streamline key processes and improve overall management techniques.
Before the project, Recovery Services staff had a structured, fragmented process where each step or ‘task’ within the recovery of an asset was shared from a common pool. This approach caused significant lost time and errors, as communication of updates between employees was cumbersome and inefficient. Task completion was highly monitored and measured, making the business culture focused on task completion and not with the processing of the entire file from start to finish. In contrast to this rigor, the critical decisions that associates were making (Should the asset be recovered? Where should it be sold? What price should it be sold at?) were relatively unstructured and had high variation by individual.
The sales department was also struggling with how to maximize the value they were providing to clients. Sales was responsible for managing the entire supply chain on behalf of these clients, balancing the importance of maximizing value on their behalf, while ensuring the entire process was as timely as possible. The project was designed to simplify these processes, better empower staff to make key decisions, improve communication throughout the chain of command. In addition, specific focus was also given to better serving clients throughout the value chain, while improving turn-time and overall profitability.
- At project end, the improvements implemented have resulted in financial results tracking 22% greater than originally forecasted at project start. Cost savings, through the streamlining of processes and reduction of rework have resulted in significant savings, and projected revenue improvement has also been substantial.
- Post project, Recovery Services employees are now empowered to ‘own’ client files from start to finish, managing all required steps. This has resulted in greater efficiency, a reduction in the opportunity for errors, and a more direct chain of command.
- Significant work was also targeted at improving decision making at all stages of the value chain. Specific tools were introduced at each step to ensure employees are making the correct business decisions and maximizing client value.
- Visibility to employee performance was improved with the introduction of improved management techniques and a customized quality management tool. Meaningful training opportunities have been identified as a result of these changes.
- A set of standardized procedures and a strategic shift was introduced to the sales department in order to better manage the asset appraisal and selling process. These changes resulted in a 1-3% increase in overall revenue and a reduction in overall selling time.
- Finally, a revamped management operating system was implemented. These tools provided all levels of management with greater visibility to key metrics required to properly manage the business. Tools were tailored to ensure accurate information was always at hand in order to action critical decisions.
The Client Experience:
“ We selected Carpedia as a process improvement partner because of your hands-on approach (“Results not Reports”) and your local presence making the engagement more cost- effective. The result of the engagement met my expectations…Your approach to process improvement is solid and extends beyond a traditional methodology by anchoring itself around the profit drivers to ensure we are improving the things that matter, emphasizing planning, and covering the leadership and active management behaviors required to sustain results.”
EVP, Operations, D+H