Case Study: Allied Building Products Corp.

Description:
Allied Building Products is one of the largest building products distributors in the US.  Following a period of significant growth fueled by acquisitions and the opening of new branches, the credit and collections organization had become both cumbersome and costly.  Further, an embezzlement by a branch manager uncovered a weakness in the company’s internal control systems that led to a change in leadership within the head office credit management team.  Since a major portion of Allied’s business came from undercapitalized contractors, an efficient and effective credit and collections function was considered a critical success factor for the company.   We were retained to help reorganize the credit and collections function in order to a) maximize effectiveness as a business facilitator, b) reduce costs, c) improve efficiencies, d) strengthen internal controls, and e) provide for significant future growth.

Process:
Working collaboratively with the new head of corporate credit and collections, existing functions, costs, policies and workflow procedures were analyzed.  Inefficient and ineffective home office functions were identified and significant revisions to workflow procedures and internal reporting were designed to shift analysis and accountability to the branch network.  Improved control mechanisms were designed and implemented, and extensive training was provided so that the organization would take ownership of the new procedures.  Headquarter costs were reduced without a commensurate increase in costs within branch operations.

Results:
All assignment objectives were met.  The head of corporate credit and collections became a well-respected business facilitator and the company resumed its rapid expansion program.  Subsequently, we were retained to provide advice on other cost savings/best practices initiatives within the headquarters operation.