Structural Steel Fabrication Company

Overview

Created in 1984, this highly respected Steel Fabrication Company has grown into one of the largest in North Texas and Southern Oklahoma serving the construction industry.

Challenges

With a change in executive leadership due to the leave of absence of the company’s president, day to day operations deteriorated. There wasn’t a strategic plan or vision for the new leadership team to follow. Gross profits dropped 9%, (21% to 12%) during a three year period while overhead increased from 15% to 28% over the same timeframe.

The key leadership roles were ill defined and as such lacked a cohesive sense of accountability. This resulted in limited control over KPI’s (Key Performance Indicators) and production metrics.

Solution

A Cash Flow Spreadsheet was created and implemented to improve the company’s cash forecasting ability, and allow the company to avoid cash shortfalls. A one-page dashboard was developed to allow the management team to better control the business. This report included: Cost of Change Orders, Daily Cash on Hand, A/R reduction goal, Retainage and Labor Efficiency. A profit plan report tied production schedules to Work In Progress, Contract Management (Start and Completion dates), and Production Forecasts. A Performance Management System measuring performance vs. job description was designed and implemented.

Results

Morale increased as employees identified with and found pride in the great improvements the company was making. Daily production productivity increases ranged from 7% to 44%, with an average increase of 20% overall. Most importantly, the company’s earnings before taxes increased 13.5%.