Computer Peripherals Study #2

Issue Faced. Structural Reorganization to improve focus and effectiveness

Industry. Computer peripherals

Location. Multiple North American locations

Size Of Company. $150,000,000

Who Brought In The Team/Individual. CEO

Goal Of Assignment. To improve operational effectiveness through teamwork and cross-functional accountability.

Actions Taken. The organizational structure grew horizontally through organic growth, acquisitions and regional expansion. Direct reports to the President peaked at 21. A functional review was performed to truncate the organization into four major areas, Administration, Commercial, Logistics, and Operations. Vice Presidents were established to lead these areas, with proper authority added to their responsibility. The new VPs became active leaders of the company with a very open communication style. The VPs worked out of three different locations, two in California and one in Massachusetts. Weekly conference calls were conducted to surface all functional issues, participation was mandatory, issues were logged and action items reviewed at each subsequent call. Participation in managing the company was encouraged. No topics were exempt from discussion. Agreements were reached with proper cross-functional inputs.

Results. Elimination of redundant structure resulted in modest savings of $500k. Redundant structure was replaced with Director level enhancements to provide specific improvements into the organizations effectiveness in procurement, quality, and process engineering. The organization became a consistent messenger of the company’s strategy. Silos slowly disappeared. Difficult decisions were understood and directions taken were communicated in a consistent fashion. This framework became the basis of total restructuring of the company that included closing four plants, converting two others into technical support centers, and developing technology specific plants in low cost labor centers. Total structural improvement, without a loss of capability, resulted in total overhead reductions of $10,000k over a two year period.

Assignment Duration. Initial structural change was effective within six months, total overhead reductions, including plant closings, took 2 years.

Resources Utilized. Existing management team

Testimonial. Parent Company Board of Directors

Submitted By. Tom Baratka