Turning Underperforming Portfolio Plants into Value Creators

Trusting your team is paramount, but the privately held companies you acquire typically lack exposure to outside expertise in operational improvement and excellence. They often rely on home-grown manufacturing and management processes, turning companies into something that resembles, but has not truly become, a thriving, functional organization. You’re left with disappointing returns, extended exit timelines, or, in the worst cases, losses.

Find Out What You’re Dealing With

You’ve completed initial due diligence but aren’t seeing expected results in your portfolio’s lifecycle. Customer backlogs are increasing, and the cash conversion cycle is extending. Your operational management team asks for patience, but patience for what? Now is the time to proactively dig deeper.

Review Critical Operations KPIs

A major red flag is a company operating without meaningful KPIs – or worse, KPIs treated merely as factory wall art. Request a thorough KPI review focusing on:

• Overall Equipment Effectiveness (OEE): This quick measure of operational health highlights improvement opportunities. Are targets accurate and benchmarked against industry leaders?
• Throughput: Are production targets being met? If not, why not, and are the targets appropriately calibrated? What’s being done to improve efficiency?
• Downtime: Are lines running as planned, or are equipment and maintenance issues going unresolved? Are changeovers increasing?
• First Pass Yield: Is the rate of defective products rising or stagnant? Have root causes been analyzed and addressed?
• Schedule Attainment: Is production aligning with the planned schedule? What’s causing deviations – poor execution or unrealistic planning?
• On-Time Delivery: The ultimate KPI. Missed deliveries directly translate into lost revenue and eroded customer trust.

If leadership isn’t addressing these issues proactively, implementing corrective actions, or adjusting measurements meaningfully, it’s time to consider outside expertise.

How Did Things Get So Far Off Track?

Loss of Critical Team Members

Losing key personnel during buyouts is common, but sometimes these departures represent the true operational backbone. Frontline managers often informally carry operations in the absence of formal leadership, and their exit can cripple performance. Resist merely rehiring former employees – focus instead on process optimization and standardization that makes operations driven by systems, not individuals.

Speaking of a Hidden Factory… You’ve Got One

Leadership and operations teams may lose focus post-acquisition, neglecting processes that initially led to success. Managers distracted by their next career step contribute to a gradual decline in operational effectiveness, a scenario perfectly suited for operational consulting intervention.

If It Ain’t Broke…

What worked in the past won’t always drive future success. You may have acquired a company at the peak of its production innovation – possibly decades ago. A primary signal of leadership neglect is allowing operations to stagnate rather than pushing for continuous improvement. Home-grown management teams often lack knowledge of current industry practices and resist new approaches with the familiar refrain: “We’ve always done it this way.”

The Future Was Clear, Just Not to You

Initial assessments and operational reviews often appear promising because sellers naturally downplay operational inefficiencies. Engaging operational experts during the LOI phase is critical to uncovering hidden risks and highlighting immediate post-acquisition improvement opportunities to accelerate returns.

Leveraging Industry Experts for Maximum ROI

When management falls short of targets or claims limited improvement potential, external operational experts become indispensable. Choose partners with proven records of on-the-ground execution and lasting process improvements – ensuring changes stick long after consultants have departed.

About Seraph

Seraph is a specialized global strategy and operational excellence consulting firm that partners with business leaders to address complex supply chain, operations, and manufacturing challenges. With extensive experience supporting private-equity, public, and family-held businesses in industries such as automotive, aerospace and defense, medical devices, manufacturing, and distribution, Seraph delivers long-term operational improvements that transform operations.

Our team combines strategic insight with hands-on expertise to ensure successful execution on the plant floor. We don’t just fix problems; we seize opportunities for growth and excellence. Seraph’s services include crisis management, restructuring and turnaround, logistics, due diligence, total cost management, project management, rapid health assessments, relocation and consolidation, and strategic development and implementation.