Manufacturing & Distribution
Situation
Primary revenue driver was aftermarket automotive parts with secondary revenue source being chemical additive products. Cost margins on aftermarket parts shrinking due to Chinese ‘knock-off’ manufacturing.
Task
Analyze the option to offshore key parts to regain cost margin advantage. Include in-country full quality control process to ensure customer satisfaction.
Action
On-site evaluation of 5 Chinese manufacturers. Quality control and inspection processes in country defined and priced. Full financial pro forma projections of three paths; full offshoring of parts, partial offshoring of parts, salvage through sale of the parts division.
Result
Over the course of 12 months the parts catalog, with intellectual property, sold to Chinese up market automotive parts manufacturers. One time capital from the sale used to expand additives catalog and distribution channels. Berryman Products increased net profit margins by 21% the following year.
