Interim General Management and Operational Restructuring of a Western-Owned Company in China
U.S. Company based in China discovered operational concerns as they related to the General Manager (GM) of a newly acquired facility that could compromise the plant.
Client learned that the Chinese GM of its manufacturing facility had a radically different operating philosophy regarding transparency and financial reporting, forecasting sales, procurement and supply chain needs, manufacturing and inventory data. The Chinese Company was also paying higher material costs for key raw materials, thus hurting cash flow and margins.
Client needed to understand the operational capabilities and weaknesses of the facility to determine how to integrate the plant into its organization. The U.S. Company did not have senior executives with operational experience in China. The facility had begun requiring regular monthly cash injections to remain solvent.
East West Associates (EWA) performed a multi-step approach including:
Conducted an Operational Audit of the existing facility to evaluate the health of the business, operational capabilities, business processes for Sales & Marketing (Supply Chain and Procurement, Manufacturing, Operations, IT), evaluation of senior executives, and financial and contractual risks.
EWA installed an Interim GM well versed in the management style of the American company. The interim GM was given full management responsibility, and immediately began improving the company's operating standards.
The interim GM also implemented numerous operational processes designed to bring greater efficiency and made changes in the sales process and distribution channels.
In 6 months, the interim GM set up a compatible system that was a good fit with the American parent company and had stopped the financial “bleeding.” The interim GM also identified and interviewed a permanent GM leaving the company well positioned for growth.