About this Presentation
Allied Healthcare Products, a long-standing medical product manufacturer, was facing closure, employee layoffs, and minimal recovery for creditors. However, through effective leadership, critical TOC thinking, investment banking, restructuring attorneys, and liquidity support, the company managed to retain most employees, continue manufacturing important products, and provide substantial payouts to unsecured creditors. Overcoming challenges such as market demand analysis, environmental issues, labor shortages, supply limitations, and medical regulatory hurdles, the professionals successfully executed a turnaround using TOC and a 363 bankruptcy sale. Previously experiencing macroeconomic challenges and operational inefficiencies, the company utilized a TOC demand-pull simulation to identify additional value and cash flow. Collaborating with its advisors, Allied retained 70 employees and secured a $2.5M loan. This new liquidity allowed them to restart operations, negotiate with vendors, and streamline production. Despite retaining only 33 union workers out of 82, Allied achieved significantly higher monthly production per worker post-WARN notice. In May 2023, they secured a stalking horse bidder, Flexicare, for over $8.5M, resulting in over four times the projected liquidation return. The bankruptcy court approved the sale on June 30th, 2023, ensuring job retention, minimum lease payments to the landlord, substantial repayment to trade vendors, and continued availability of key life-saving products in the marketplace. Allied Healthcare's success demonstrates how a detailed demand-pull supply chain simulation can generate significant cash flow, either preventing bankruptcy or facilitating career advancement.
What Will You Learn
To help you get the most value from this session, we’ve highlighted a few key points. These takeaways capture the main ideas and practical insights from the presentation, making it easier for you to review, reflect, and apply what you’ve learned.
Allied Healthcare Products, a company in distress due to declining sales, antiquated systems, and ineffective management, was able to turn around by addressing key issues such as overpurchasing, labor turnover, and backlog management.
The company filed for bankruptcy, which allowed it to restructure and eliminate liabilities, providing a fresh start.
Through effective inventory management and a focus on demand, the company was able to reduce its inventory from $14 million to $6.5 million, freeing up significant capital.
Instructor(s)
Akash Amin
Akash Amin, CTP, is a Director at MorrisAnderson and holds the positions of CRO and President at Allied Healthcare Products. With an extensive background in mergers & acquisitions, transaction advisory services, and restructuring, he delivers structured an pragmatic solutions through comprehensive financial analysis. Akash's representative work experience includes successfully managing divestitures and implementing cost-cutting measures to prevent bankruptcy filing for one of New York's largest solar developers and equipment suppliers. He has also excelled in negotiating workout arrangements, recovering over $30M of impairment loss for a Fortune 100 client. Additionally, Akash showcased his management expertise in leading the operational wind-down and RCM of a publicly traded US healthcare company with hospitals and surgical centers in Texas and Arizona. Furthermore, his proficiency in preparing statistical models for successful bankruptcy litigation resulted in significant savings of approximately $1M for the client.
Ms Alka Wadhwa
Alka Wadhwa is an experienced consultant and process improvement expert with over 24 years of expertise in the Theory of Constraints (TOC), Lean Six Sigma, and organizational performance optimization. She has successfully led projects in healthcare, financial services, and manufacturing, driving significant improvements such as a 67% boost in hospital operations and a 140% increase in outpatient visits.
Previously, Alka Wadhwa spent 17+ years at GE Global Research Center, where she led initiatives to enhance various GE businesses through advanced technologies, process redesign, and system optimization. Founder of Better Solutions Consulting, LLC, she specializes in using TOC, Six Sigma, and data analytics to streamline operations and build high-performance teams.
Her work has earned her multiple accolades, including the Empire State Award of Excellence in healthcare.
Kobus van der Zel
Kobus van der Zel a senior consultant at MorrisAnderson, operating as a Certified Turnaround Professional (CTP) in companies facing liquidity or transition challenges. Kobus holds mechanical engineering and MBA degrees, and is a qualified TOC Jonah (1999). Since 1999 he has tied his turnaround fees to monthly profitability or cash flow results, in order to create a pull system for truly understanding the obstacles for higher business and people performance. Coaching and interim CEO engagements over a span of 16 years in South Africa, Canada and the USA has enabled him to summarize the forces preventing higher performance in his book The Forces of Progress (www.lulu.com/spotlight/globalturnarounds). “When I engage with a new underperforming company I am always surprised at how so many weak people could have gathered in one company” Kobus says. “Eli helped me to understand that people are inherently good, and that it was the company that made the people weak – which is great news, because it means the process can be reversed to make them strong again!” Kobus’ system for people development is at the root of his turnaround strategies by using the online accelerator www.YourSensei.org – which combine the best of TOC, lean manufacturing and people development processes to ensure optimal cash flow generation when it is needed most.