The company had grown through acquisition, bolting on new product lines without integrating operations or rationalizing the portfolio. They were manufacturing 200+ SKUs across three facilities, many generating razor-thin margins that disappeared once overhead was properly allocated. Nobody could say with confidence which products or customers were actually profitable.
Production was chaos masked as activity. Rush orders disrupted schedules daily. Setup times consumed 40% of available capacity because frequent changeovers between low-volume products created constant inefficiency. Quality issues and rework ate another 15% of production time. The team was working harder than ever while falling further behind.
Leadership had tried to cut their way to profitability through headcount reductions and deferred maintenance, which only accelerated the decline. Equipment breakdowns increased. Experienced workers who understood the processes left and weren't replaced. The problems were systemic, not budgetary—cost cuts without operational improvement were digging the hole deeper.
