Industrial Distributor Multi-Site Closure
Problem
The organisation operated 14 regional trading sites specialising in buying and selling goods, with each location generating $6–9 million in annual revenue. Due to low financial returns, a strategic decision was made to close five of these locations, impacting 24 employees.
The project faced challenges due to limited travel budget, meaning Stoke was required to manage the closures remotely. The regional managers were supportive and actively sought assistance. Additionally, the executive sponsor had no prior experience in site closures, necessitating structured change management guidance.
Scope and Deliverables
Stoke provided advisory support to ensure a structured closure process with minimal impact on revenue and operations. The key elements of the scope included:
- Remote Project Execution: Developed and implemented a closure plan without onsite presence, using remote project techniques.
- Stock and Asset Management: Ensured accurate inventory tracking, optimal disposal, and redistribution of stock.
- Operational Transition: Facilitated customer transition planning to minimise revenue loss.
- HR and Employee Support: Worked with corporate HR to manage redundancy processes and personal relocations.
- Project Governance: Established a rigorous planning process, including structured meetings and progress tracking.
Outcomes
- Revenue Retention: Transitioned key customers to nearby locations, minimising revenue loss.
- Stock Optimisation: Efficient redistribution of inventory, avoiding unnecessary liquidation.
- Employee Transition: 30% of affected employees were successfully redeployed, with the remainder receiving redundancy support.
- Safety and Compliance: No injuries or industrial lost time during the process.
- Process Improvement: Identified and addressed inappropriate operational practices, improving efficiency in remaining locations.
ROI Assessment
Against program and project consultancy and management costs, the average ROI is estimated at 700% with the savings below identified:
ROI Area | Metric | Estimated Value |
Revenue Preservation | Customers retained by nearby locations (target 50%) | $15–22M revenue across 5 locations |
Stock Optimisation | Redistribution of assets instead of liquidation | $2M+ gross margin generated |
Avoided Onsite Costs | Remote execution saved travel and logistics expenses | $150K+ |
Workforce Transition | 30% redeployment reduced severance costs | $300K+ |
Risk Reduction | No injuries or industrial disputes, avoiding compliance costs | $750K+ |