Your product is solid; your track record good; and your name well-marketed. Everything should be humming, except for that crushing debt load that exceeds half your total worth. And worst of all, that debt is the only part of your company that’s growing. So, how do you winch yourself back into the black?

What Solo Cup Inc. did in 2007 was to call on AlixPartners, which in turn sent out managing director David Garfield and a small team of assistants. In nine months they helped Solo become a sleek, profitable operation. To explain the details of this amazing recovery, the NJ chapter of the Association for Corporate Growth has invited Garfield to speak on “The Turnaround of the Solo Cup Company” at its monthly breakfast meeting on Tuesday, April 21, at 7:15 a.m. at the Hilton Woodbridge. Cost: $75. Visit www.acg.org/nj.

Garfield has spent 20 years helping major firms find their way back on track. A native of Long Island, Garfield attended Williams College, graduating in 1989 with a bachelor’s in psychology — a degree he says is a major business asset. He then took his MBA in finance and marketing from Northwestern University. Garfield plied his fiscal and managerial skills with several companies, including PricewaterhouseCoopers as global relationship partner, and then as president of Encore Development. He has worked as managing director with AlixPartners since 2003.

Solo Cup Inc., based in Highland Park, Illinois, holds a major market share in the industry of disposable products on which we serve food and beverages — paper cups, straws, cutlery, plates, and containers, for both consumers and industrial food companies. It demands an immense volume of production for a vast number of items. Although a $2.5 billion, 70-year-old corporation, by 2007 it faced major crises on several fronts.

The challenges. “The real blessing here,” says Garfield, “was that the board and senior staff knew things were wrong, and they pretty well knew what the problems were.” The initial turmoil had come from Solo’s recent acquisition of Sweetheart Cup, a fellow, competitive giant whose synergy was supposed to give a great competitive edge to Solo. Instead, it had only added to the complexity, involving more lines, more clients, and more shipping destinations. The integration had gone poorly; wasteful duplication of energies were occurring at all levels.

Secondly, unprecedented run-ups in raw materials costs were crushing Solo. Resin prices had jumped 44 percent in one year. Since materials make up 60 percent of the total cost, for manufacturers like Solo Cup, the company was forced into increasing debt. “The standard solution of passing this cost on to customers was not so easy here,” says Garfield. “They were dealing with very sophisticated buyers — Cisco and huge restaurant chains. On the consumer end, it’s Walmart and supermarket chains.” These were buyers with price leverage who kept Solo tightly squeezed. With that, the company’s debt grew to $1.2 billion.

Solutions on the floor. “There is no silver bullet fix,” says Garfield. “The dollars are always in the details.” Working with Solo’s employees and managers, AlixPartners’ small, high-level team operated a wave-upon-wave review of each manufacturing plant. By moving the floor structure, deleting the percentage of scrap, increasing machine speed, and reducing worker involvement, the team developed a model that meant more productivity for less cost.

At the same time Garfield’s crew tackled the inherent inventory problems. Solo Cup runs massive batches of very high-volume, ever-changing product lines. It deals in multi-million unit orders for major clients. “Think of storing $1,000 worth of plastic salad containers, versus $1,000 worth of microchips,” explains Garfield. By working in conjunction with the manufacturing divisions, managers were able to coordinate and greatly reduce the numbers and very expensive cost of inventory.

Solutions in the office. While Garfield’s team might not be able to budge Solo Cup’s major clients, they could create a more sensible pricing structure. As with any company that brings out a growing number of products to a growing number of clients, pricing gets fragmented. Each customer gets his own deal, many of which inadvertently fall below market prices. By laying out and assessing the full pricing schedule, Solo Cup executives were able to consolidate prices based on actual cost, and to whittle away extra price points.

If the AlixPartners group faced any major contention with Solo Cup management, it was in organizational restructuring. In the process of streamlining the company’s several-million-square-foot manufacturing plants, the duplication of executive efforts became more apparent. “I don’t believe in stacking up a body count to create supposed savings,” says Garfield.

From the time AlixPartners team began its first diagnostics to the time it finally walked out the door Solo Cup’s debt had been reduced by $460 million — nearly one half its peak. The efficiency model worked so well in the plants that Solo Cup’s own managers transported it to the skeptical managers of its European plants and met year-end targets by July.

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