Our Client Case Studies

Case Study 1

Issue:

The business unit leader was frustrated. Sales volumes were growing while profitability was lagging. The leader’s direct reports complained of heavy workloads and frequently referred to industry indicators that suggested the unit was doing better than its competitors.

Findings:

• The organization was reactive with a structure that did not support the required level of productivity.
• Business processes were poorly defined and inefficient. Team members believed they had neither the time nor the political will to do the necessary root-cause analysis to make the significant improvements needed. As a result, they were addressing the same problems multiple times.
• Measurements no longer reflected the current customer environment and rewarded poor decision making.
• Supplier costs were rising quickly, and, in most cases, were accepted readily.
• Team members counted on leadership to resolve their differences, failing to take ownership of their own shortfalls.

Solutions:

William W. Rutherford & Associates collaborated with management and employees to:

• Improve collaboration within and across functions, which led to better problem solving, issue resolution, and proactive planning and scheduling. This resulted in higher quality and lower costs. “Variance reporting” methods significantly reduced ongoing examples of noncompliance.
• Design improved core business processes. Clear roles and responsibilities helped the staff become more efficient and effective at reaching business objectives.
• Establish goals for significant cost savings and customer quality/delivery improvements, and build employee buy-in for their achievement.
• Establish effective performance management practices and create a more active dialog for further improvement.
• Reduce the political and emotional barriers for improved business practices.
• Implement improved metrics, which tracked actions that created the most value.
• Instill the organization with a proactive, can-do attitude for continuous improvement.

Results:

The company team reduced unit cost 40% and total operating cost 20%, and on-spec quality and on-time delivery improved from 90% to 100% and 99.8%, respectively.

Case Study 2

Issue:

The CEO was dissatisfied with division performance. The parent corporation believed the division’s contribution to corporate profitability should improve. The division was a third-quartile performer compared with its peers.
Findings:

• Team members viewed their most significant issues as too difficult to address and, therefore, they were not responsible or accountable for their actions.
• Operating strategies were largely ineffective or nonexistent.
• Roles and responsibilities were poorly defined, making the organization feel bureaucratic.
• The structure was heavily siloed, which minimized horizontal communication.
• Valuable time was lost in too many meetings, and there was little accountability or follow-up.
• Measurements no longer reflected the economic environment, were mostly records of activity, and rewarded poor performance and poor decision making.
• The culture was risk averse and prone to “analysis paralysis.”
• Capital projects were budgeted but not completed on time or within cost estimates.
• Process disconnects resulted in higher cost and lower quality.

There was no plan for improvement, while 14 key areas were found to be benefit rich.

Solutions:

William W. Rutherford & Associates collaborated with management and employees to:

• Mobilize the organization to address the 14 key area opportunities, focusing on improved outcomes. Outside-the-industry views were encouraged.
• Establish more effective goal setting, set targets to “beat the budget” and reward organizational elements for improved business-plan execution.
• Clarify process outcomes and roles and responsibilities.
• Implement a capital project management process, which reduced costs and improved project completion times.
• Redesign the performance management system with greater weighting of results.
• Reduce meeting frequency and duration, which created a substantial productivity increase from the existing workforce and improved morale.

Results:

During the first nine months of working with Rutherford, the division achieved first-quartile performance compared with its peers. The company reduced operating costs $25 million and improved product quality 25%.

Case Study 3

Issue:

The CFO of a public company wanted a financial-closing process that included time for results analysis prior to public disclosure of the information. The company needed better reporting quality and less time and involvement by high-level CPAs.

Findings:

• Most team members did not understand the installed Enterprise Resource Planning (ERP) software system and its accounting implications.
• The operating units submitted inaccurate results, which led to extensive follow-up.
• Out-of-period adjustments skewed monthly measures, limiting accountability.
• The accounting staff was overburdened for two weeks each month.
• The professional team could not complete critical analytical work due to a lack of time and the difficulties posed by out-of-period adjustments.
• The finance staff felt they were at odds with the operating units, and vice versa.

Solutions:

William W. Rutherford & Associates collaborated with management and employees to:

• Design an improved financial-closing process, including the reallocation of workloads.
• Reset closing expectations, and initiate training and problem solving.
• Reduce inaccuracies from operating units, and improve parallelism via improvements in data definition and simplification.
• Eliminate accounting inconsistencies that previously resulted in skewed analyses.
• Define roles and responsibilities, more effective timing and clear accountabilities through cross-functional collaboration among team members.
• Reduce delays and depersonalize failures.
• Enhance the operating units’ perception of finance and accounting staffers as team members who contribute greater value creation.
• Implement extensive operational analysis capability, which led to improved operating unit performance.

Results:

Team members reduced the financial-closing process cycle time nearly 40% and eliminated the need for most CPA support and involvement.

Case Study 4

Issue:

The CEO of a company wanted to reduce costs while delivering more products and services in a timely manner.

Findings:

• Supplier costs were rising faster than revenues.
• In some cases, there were more than 50 suppliers for the same product or service, which escalated cost.
• There was limited access to some materials and supplies, an issue that was largely ignored.
• Engineers spent more time on administration and data management than project design.
• The culture was highly risk averse, which added cost.
• The purchasing methodology was dysfunctional.
• Company specs and a risk-averse culture contributed significantly to “single source” materials and suppliers, which dramatically increased their cost and limited their availability.

Solutions:

William W. Rutherford & Associates collaborated with management and employees to:

• Set goals linked to the company cost structure, which enabled measurement of benefit improvement.
• Enable cross-functional, multi-regional teams to identify opportunities that would improve sourcing of strategic products and services.
• Improve collaboration with suppliers, which led to greater acquisition innovation than internal brainstorming. Entrepreneurial gains spurred cultural improvements.
• Implement internal and external training in supply-chain strategy, relationship building and performance management, which provided a broadened perspective of benefits that could be achieved by participating team members.
• Increase operational revenue as the speed of “asset monetization” improved.
• Identify and utilize access to supplier technology and improved reliability.
• Improve team member collaboration across the support groups and operational units.
• Create additional operational strategy possibilities with each supply-chain success.

Results:

The client formalized supply-chain management into an organizational role. Annual cost savings were more than 10% of spend. Product and service acquisition improved as the economy improved. Contract administration was streamlined.

Case Study 5

Issue:

The president of a U.S. division wanted solutions to issues that caused the last major project to be significantly over budget and fraught with operational inefficiencies and conflict.

Findings:

• Four reasons were identified by management and staff as significant barriers to improvement:
• Unclear and conflicting roles and responsibilities.
• Poor communication.
• Organizational structure that was siloed and not well defined.
• Business processes that were inefficient and poorly understood.
• The strategy and “nature of past problems” were perceived differently at the executive, middle management and professional ranks.
• There was a general lack of agreement on the desired path forward.
• Emotional and political barriers made perceived improvements difficult to contemplate.

Solutions:

William W. Rutherford & Associates collaborated with management and employees to:

• Design and implement an improved strategy communication and execution process.
• Establish goals aligned with the strategy across departments.
• Improve the acquisition business process.
• Redesign the business core process, and realign the organizational structure to support the new core process.
• Implement the new organizational structure with redefined roles and responsibilities.
• Design and implement a performance management process that supported fair assessments of individuals working on multiple teams.

Results:

Management has clearly defined handoffs at project milestones, decision making is clarified, and team members are empowered to make recommendations. Team members see the link between their individual performance and goals, roles and responsibilities, and their annual performance review and bonus.