Growth had outpaced the operating infrastructure
Blue Stream Fiber is a Florida-based provider of internet, TV and phone products delivered over a fiber network it built itself. The company was growing fast and preparing for private equity investment and, ultimately, an IPO.
Operations were siloed, systems were not integrated, and inventory costs had ballooned by 150% with limited controls and no defined procurement or inventory management processes. Heading into diligence, that combination is both a cost problem and a credibility problem. The second one is harder to fix under time pressure.
Cost and process at the same time
In a scaling business neither holds without the other. The work tested pricing that had never been tested, consolidated the supplier base from 12 to 7, renegotiated purchase order values with distributors, developed standard bills of materials so design and construction could order consistently, and changed the sales process to use inventory already on hand.
The result was $2.75M out of material and subcontractor cost, inventory value down 30%, and working capital released that growth had tied up.
What made it stick
Process changes ran through the teams doing the work: a tighter sales and operations planning process, better communication between design, construction and the warehouse, and inventory data accurate enough that decisions were made against real numbers.
Blue Stream came out of the engagement with lower costs and, more importantly for its next stage, defined procurement and inventory processes an investor or acquirer can see working.
The full write-up is on the project page.