Driving a Turnaround in Tumultuous Times

This is an excerpt of the original article. It was written for the May-June 2010 edition of Supply Chain Management Review. The full article is available to current subscribers.

May-June 2010

Spring is a time for renewal. It's a time for re-assessing the way we've been doing things and making changes in a manner that ensures forward progress. That's a recurring theme of the articles in the May/June issue of Supply Chain Management Review. With the building blocks in place and the spirit of renewal in full bloom, who knows what level of supply chain excellence can be achieved?

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Three years ago, PolyOne Corp. was weighed down by excess inventory, poor on-time performance, and over-reliance on equity earnings from commodity joint ventures. In addition, the recent economic downturn hit hard in some of the company’s key markets, including automotive and building and construction. Certain analysts and investors believed that PolyOne—a premier global provider of specialized polymer materials, services, and solutions (such as metallic-look vinyl used in home appliances, the soft-touch plastic on the handle on your razor and medical-grade polymers for tubing—might have to file for bankruptcy.

Instead, the company generated $218 million of free cash flow in 2009 and reduced net debt by$223 million. Its share price has risen about 580 percent to $8.97 from its low of $1.32 in March 2009. Some analysts are now recommending PolyOne as a buy.

How did the company increases cash flow in such a short time and during one of the worst economic recessions in history? Largely through improvements in supply chain management. This article will focus on some of the most compelling actions that led to those improvements.

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