In 2015, Kessler Consulting began working with a manufacturer of precision machined parts for original equipment manufacturers (OEMs) in the aerospace, medical, defense, and energy markets. After being in business for over 30 years, the company became employee-owned and sought high level financial guidance, analysis, and reporting to manage the demands that come with being an ESOP (employee stock ownership plan) company.
Strategy & Tactics
Kessler Consulting deployed a two-person team consisting of a fractional controller and CFO. The controller dug deep into the client’s accounting and costing methodology, and analyzed each segment of the total operation. Using detailed reports from the controller, Kessler’s CFO interpreted the newly uncovered data and provided executive leadership with a path forward.
Financial Analysis & Reporting
The machine show was working with JobBOSS, a manufacturing management software program. This software allows the controller to track each work project in real time, from quoting to labor costs. Kessler Consulting maximized the software’s existing capabilities by building in-depth reporting. As a result, Kessler Consulting was able to clearly demonstrate which projects were profitable and which ones were not. One of the most crucial reports analyzed profit margin by part number.
Communication & Transparency
Using highly detailed information, Kessler’s fractional CFO regularly and consistently informed the company’s board of directors and CEO as to the business’ progress and projected future. Kessler Consulting also used these reports to update the client’s bank on a regular basis. This communication helped build trust with the client’s lender, and allowed the executive board to be more proactive.
Per the client’s CEO, Kessler Consulting is “rockstar talent for a reasonable cost.” Kessler Consulting provided the manufacturer with a solid financial plan. Improved financial reporting and job costing resulted in a dramatic turnaround in the company’s sustainability. Under Kessler Consulting’s continued guidance, the machine shop is also on track to perform even better than budgeted for 2019.
Change in Sales Strategy
Kessler Consulting determined that the machine shop was pursuing too many low value customers. Prototyping costs were high and incremental sales were low. Pursuing fewer, yet higher quality customers reduced overhead and made the business more cost effective. The client retargeted their marketing and business development tactics to match these findings.
Better Banking Relationships
The client’s lender always had more than enough information to demonstrate the company’s potential. The lender had this to say about Kessler Consulting’s CFO: “He operated as if he was an owner. He was invested in the company, and this built trust with our bank.”
Over time, Kessler’s assistance reverted the manufacture from financial loss to financial profit in line with the company’s resources. The results are particularly striking because the client had worked with a fractional CFO before, yet Kessler Consulting was able to find several ways to make a measurable difference at the company.
Through their team based approach and expansive capabilities, Kessler Consulting completely changed the financial outlook for the company. A member of their executive board said ““We greatly appreciated [Kessler Consulting’s] full understanding of the business, and ability to provide a financial roadmap for the company.”
When the client needed to find a new CEO at the end of 2018, they enlisted their fractional CFO from Kessler Consulting to serve as interim CEO. Kessler Consulting was also asked to advise the company’s HR department. Neither role is typical for a CFO, but Kessler Consulting’s business acumen transcends finances.
Their new CEO said the transition was seamless, and Kessler Consulting was perceptive, logical, and supportive without micromanaging.
Overall, the machined parts manufacturer is highly satisfied with Kessler Consulting’s performance and appreciates their team approach. For more information on how Kessler Consulting can help, contact a team member here.