PAPCO

PAPCO is one of the pre-eminent auto parts distributors in Northern California. The company purchases, warehouses and delivers over 50,000 different Ford and General Motors part numbers to auto dealers and after-market independent repair shops.

PAPCO's current ownership acquired the company in 1997. At the time of purchase, PAPCO was struggling, given the narrow margins associated with the industry and heavy competition within their trading area. The lack of management best practices, a relatively inexperienced management team, and tight cash flow placed the business in a difficult situation.

• Employed a new organizational structure with clarified responsibilities and authorities
• Introduced financial controls and cash flow forecasting tools
• Developed a hiring process to support growth
• Designed a more formal route scheduling system
• Designed well-structured financial statements to give "management information"
• Introduced specific productivity measurements to track improvements and control costs
• Developed the management team through financial training and supervisory skill development
• Acted as an interim CFO for 24 months, helping negotiate a competitive operating line despite unfavorable financial ratios
• Continued participation in strategic planning and business valuation

• PAPCO grew from $5 million in sales in 2001 (when MRSI became involved) to a run rate of over $20 million in 2006
• A financially-trained and informed management team is in place
• Prominent auto part OEMs awarded PAPCO two new territories
• Net profit percentage doubled over the period 1998–2005
• The company acquired a small local affiliate in a Southern market to secure a new geographic area