Military Defense Contractor Realizes $4M in Direct Savings from Infrastructure Improvements

A recognized leader in contracted airborne flight and electronic systems training.

$4.4M

annual direct savings realized

45%

increase in productivity

60%

increase in inventory accuracy

Challenge

Our client’s firm was facing significant growth challenges as they had not invested in the required business infrastructure to scale the business to benefit from significant opportunities in the near future.

TPG was engaged by the PE firm to provide a complete transformation plan and to execute solutions align the team and integrate the strategy with people, technology and operations.

Discovery

TPG’s team of business consultants engaged over 80% of the organization during an eight-week diagnostic, identified over 1000 pain points across all departments and multiple sites. Through the evaluation process, TPG identified the following programs for business process improvements that were necessary to allow the business to scale as required:

IT Infrastructure & Strategy to migrate the legacy platform to a new supported system with upgrades contributing $167K in direct savings
Logistics & Technical Services – identified major roadblocks in the maintenance and inventory areas of the business that had grounded 7 planes for 4+ months. TPG resolved the roadblocks, freeing up the planes increasing capacity through 1,200 additional billable hours equalling $1.15M/yr.
Travel and Expense program designed to build structure and controls around travel expenses reducing the annual spend by $1.0M
Communications and Change Management Strategy required to ensure buy-in and retain human resources
Process Infrastructure developed to standardize and document operating procedures across the business

To capitalize on these opportunities, TPG implemented these business process improvements and others over a two-year engagement to build the required infrastructure necessary for the client to sustain existing operations and grow at scale.

Value Created

As a result of this cross-functional implementation, our client realized an immediate financial benefit and a solid scalable infrastructure to support current and projected growth objectives. A summary of key results included:

Realized $4.4M in direct savings over 2 years, with savings continuing year over year (a business cost reduction of 45% of their shared service infrastructure)
Recognized $3.2M in indirect savings, addressing 79% of pain points identified during the diagnostic
Improved inventory accuracy by 60% through data cleansing, ERP migration, and KPI reporting