What went wrong?
The UK toy / model manufacturer was in a downward spiral, a disparate group of acquired brands slowly demising in value as digital eroded its traditional customer base.
The answer was to embark on a back office and supply chain transformation programme, embrace global manufacturing to help innovate the products whilst reducing the cost and shift to new central warehouse, in short a total rework and optimisation of the supply chain.
Sounds great doesn’t it, what could go wrong?
Well it sent them into a Scaletrix (it’s one of theirs) style spin, with Hornby style wheels falling off and ending up held together by Airfix glue…..
But seriously it hurt them, they nearly went under, needed additional capital investment which should have been spent on product / brand innovation and in the end the CEO departed with a serious loss of reputation.
Why did wheels come off Hornby transformation?
Lets break it down into set of failure themes
Too small to sustain such a large endeavor – ERP based transformation don’t come cheap, you need to back fill your key business resources, pay for business change management, invest in short term resource to mitigate the operational impact and finally pay for a consulting partner system integrator.
This leads to Institutional Optimism, don’t worry my friend Rupert from the Army is a terribly nice chap and reckons he can do it for a fraction of the price, how many times have we seen that one play out well….. Budget v benefit case, is there a better way ? see what 180Advisory would do ….
Operational readiness, Digital ERP based transformation programmes always cause operational waves, you can either manage the impact or get wiped out by the tsunami you unleash, why didn’t the system integrator / consultants get them ready – it was reported to be at least two month’s operational impact / carnage.
Business Benefits Blown, Hornby reported 45% drop a in turn over during the initial first few months of the new operating model, that blew the benefits case and meant the leadership team had to seek emergency cash investment .
The Consulting gene pool at that level, to deliver complex transformation you need to have the scars from the Fortune 1,000 shared industry sector transformation …. sometimes Tier 2 consultancies lack the depth of expertise to provide the level of advisory required to save the customer from themselves.
Quite simply, the desperate need to transform to address their declining fortunes linked to a lack of advisory and governance support ultimately led to this transformation failure, yes they survived (just!) but at a significant cost.
What was the impact? Cash, Jobs and Loss of reputation
- Significant impact to turn over and profitability
- Jobs, people suffered due to institutional optimism
- Retailers and customers were alienated
- Heads did role
How could One Eighty Advisory have helped save this programme?
With One Eighty Advisory you get Big 4 global expertise distilled to offer best of class advisory to mid-size organisations with global aspirations and help them rescue their failing transformation programmes.
Our Turnaround Assessments would have identified and developed a plan for Hornby to deal with the over optimism and serious operational risk they were about to unleash.
We would have focused the leadership team on the 15 key themes that ensure successful business transformation.
It’s all about the TOM: We would have focused the team on linking target operating model change to benefit realisation and carving the project into sustainable bite size chunks of transformation, easier for the business to sustain and embed.
Keep it simple: We would have focused on plug and play supply chain outsource optimisation such as 3PL warehouse management, get someone else to invest in establishing the service, pay as you go supply chain……..
Don’t break the business: And finally we would have focused on operational readiness. China is a long way to go for manufacturing so get the timing right.
If you would like more information on how One Eighty Advisory can help your Business Transformation Programme you can contact us here.