Improving Value Chain Sales As The Industry Collapsed

Summary: Grew EBITDA 9% as customers demanded annual 3-5% price reductions

Problem: I was brought in to turn around a 3 year sales and EBITDA decline. As a second-tier supplier to the automobile industry the mandated 3-5% cost savings per year were eroding profits and sales. We supplied pigments to the worldwide automotive paint industry with $150 million in international sales so the pressure was global and not just in the US.

Approach: My approach was to determine our paint manufacturing customer's value chain in the automotive and industrial sectors so we could expand our market and develop products and services. The goal was to provide guidance so we could retain and grow our profits above the mandated cost reductions. Any wins in North America would then give us worldwide benefits.

Results:

	Reversed a 3 year sales decline
	Grew overall market share 3% in a flat to declining market while increasing spot market sales by 31%
	In the face of automotive industry demands for annual 3-5% cost reductions, implemented strategies that grew overall EBITDA by 9%
	73% of the time we were able to show value rather than take a price reduction
	Put $153 million in new product opportunities in the pipeline

How we did it:

	I revitalized and expanded the sales strategy to focus on near term opportunities while developing new line extension products for main part of business which had 3-5 year selling cycle.
	Grew overall market share 3% by segmenting customer account areas into large and small sales.
	Emphasized equivalent-value-benefits to retain the pricing such as on-site warehousing and more accurate quality specifications in the face of automotive industry demands for annual 3-5% cost reductions.

A major issue was poor technical value-in-use presentations forcing all issues to price and not performance. Performed a value chain analysis (from our raw materials to final consumer sales) that identified new opportunities and identified the measurable points in customer ERP systems to revise selling approaches and redefine major R&D projects to capture value and improve margins.

We achieved first-ever customer product acceptance based only on our data without additional customer testing, under strict QS-9000 criteria, by directing improvements in our technical labs to better match customer processes. This opened a deadlock on $7 million in sales and reduced time to market by 60%.

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