Discordia overcomes growing pains, increases EBITDA by 20% (surpassing the industry standard of 12-15%), and lays groundwork for European expansion.
Based in Sofia, Bulgaria, Discordia operates transportation routes in almost every country in continental Europe, as well as to/from Turkey, Ukraine, Russia, and the UK. In addition to truck transport, which accounts for more than 80% of the company’s revenues, it also provides rail, air cargo, container, and freight forwarding services.
Challenge: After six years of steady growth in fleet size and revenues, there was a drop in average daily mileage and driver utilisation, as well as a reactive, fire-fighting management culture.
From 2013 to 2018 Discordia achieved steady year-over-year growth in fleet size, revenues, and EBITDA. In 2019, however, they hit a speed bump. Average daily mileage and driver utilisation declined for the first time in years. The organisational culture was reactive. Margins fell as well, prompting leaders to reach out to TBM for solutions.
Growth hiccoughs happen in many rapidly growing businesses. Companies reach an inflection point when they’ve outgrown the systems and processes that worked fine when they were smaller. Once they reach a certain size and complexity those systems no longer function efficiently, growth stalls, and financial performance suffers.
Solution: TBM support included implementation of a new daily management system, visible dashboards with live results and daily management meetings.
The disconnect reflected a general lack of understanding of how daily work and performance supported Discordia’s overall strategy and vision. Our initial go-forward plan mapped core business processes, set improvement priorities, and narrowed the focus on the critical KPIs that spanned the company’s value stream: daily mileage and driver utilisation.
To implement these and other changes, a TBM consultant worked almost full-time with various teams at Discordia throughout 2020. He provided project support, formal and informal training, and daily coaching at all levels of the organisation.
Results: By applying the principles to optimise our processes, Discordia has achieved record efficiency levels in their industry in extremely difficult business conditions.
Through these efforts, Discordia was able to achieve multiple improvements:
- EBITDA boosted to 20% compared to an industry standard of 12-15%
- 15% increase in daily mileage
- 5% improvement in driver utilisation within 9 months
- Invoice turnaround times from 15 to 2 days
- Reduced overdue debt by 6%
- Automation and better processes reduced the time required to communicate route instructions to drivers by 30%
- Route map errors reduced by 50%