Feb. 6, 2013
Castle Restructuring, to Close 5 Warehouses
A.M. Castle & Co., Oak Brook, Ill., plans a major organizational restructuring this year, including the closure of five warehouses, as it seeks to improve efficiencies and profitability. The measures are expected to increase annualized operating profit by $33 million once fully implemented.
"This broad, performance-enhancing plan will enable us to better serve our customers by organizing our operations around them and their needs," says Scott Dolan, president and CEO. "Our goals are to simplify how we do business, optimize inventory levels, reduce waste and improve on-time performance, which we expect will help us increase revenue while reducing costs. It is a critical step in improving our operating results, positioning Castle for greater long-term growth and creating increased value for our shareholders."
The organizational restructuring will eliminate the current decentralized commercial unit structure. Instead of three independent commercial units that include sales, operations, procurement and other support functions, Castle will centralize the support functions and dedicate three vertical sales teams.
As part of the restructuring, the company has appointed four individuals to its new commercial leadership team. Blain Tiffany, formerly president of the company’s Industrial unit, was named to the new position of chief commercial officer, with responsibility for overseeing the vertical sales teams, leveraging best practices across industries and executing the commercial go-to-market strategy for the company as a whole. James Callan was named vice president of sales, Aerospace; Mark Fagert, vice president of sales, Oil and Gas; and Jim Joyce, vice president of sales, Industrial.
"We believe that the operating and financial targets we have established are achievable, and we believe that the three end markets we target offer attractive long-term growth potential," Dolan says. "Our entire organization will be focused on implementing this plan."
As part of its branch fulfillment network realignment, the company plans to consolidate five warehouses into its existing network of 30 metals segment branches in North America, Europe and Asia. After the closures, Castle will maintain sales offices to continue serving local customers. The company declined to specify which facilities will be closed.