North America’s leading distributor and processor of metals, with annual sales of $2.2B. With 50 service centers across the US, Canada, and Mexico with joint ventures in Asia, the company provides its customers the ability to order a variety of high-quality metal in economic quantities by consolidating their purchases through a single supplier.
Achieved targeted cost reductions
One-time gain from the sale of surplus assets fully offset restructuring expenses
New analytical tools and staff training to support future evaluations
The Chicago division of our client, which served as both a local service center and the primary depot for distributing slow-moving items nationwide, was struggling to meet its profitability targets.
After evaluating the scale of operations, KGM worked to optimize the processing and warehousing equipment to reduce costs while maintaining delivery schedules and enhancing customer service.
We assessed the required types and quantities of processing and warehousing equipment, designed improved material flow plans, and relocated equipment to streamline workflows and eliminate redundancies. Financial and virtual warehouse models were developed to guide equipment relocation and material handling adjustments. We presented twelve restructuring options based on these evaluations and collaborated with the client to implement the chosen solutions. Additionally, we advised on potential gains or losses from asset sales.
KGM successfully guided the client through the necessary restructuring to achieve their targeted cost savings. We secured $12M in recurring annual savings across manufacturing, staffing, and leases, and facilitated a one-time gain from the sale of surplus assets that fully offset the restructuring costs. New analytical tools were developed to determine optimal inventory levels, processing capabilities, and staffing requirements for future business changes. The client’s team was trained to use these tools, ensuring they can conduct similar assessments at other large service centers moving forward.
