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Improving output while reducing labor, material, and unit costs (CS297)

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This story is for CEOs who

  1. Want to increase EBITDA quickly and sustainably

  2. Are concerned about the loss of confidence in customers and employees

  3. Need to balance supply and demand


The Challenges 

A 150-year old retail manufacturing company had zero to single-digit EBITDA, problems with maintaining quality and delivery standards, and concerns about rising costs. In a before engagement survey, 90% of employees and leaders voluntarily shared their concerns about the company, indicating widespread confusion about strategies and anxiety about the company’s future.

The company sought to improve manufacturing controls, build operations excellence, and upgrade procurement.


Raising productivity and quality, strengthening the supply chain, and reinvigorating the culture

 

SGS Maine Pointe:

  • Redesigned packaging to raise reliable of packing machine to 100%
  • Reduced manufacturing costs 8% despite antiquated equipment
  • Improved culture by directly addressing leader and employee concerns in custom LOI training
  • Established cross-functional teams to upgrade procurement and manufacturing management

Lessons learned for other executives

  • A collaborative, problem-solving culture is critical for the success of cost savings initiative
  • An objective root cause analysis leads to the right corrective actions
  • Supplier optionality builds a more resilient, cost-effective supply chain

The Results

  • Strengthened the supply chain with strategic sourcing, including supplier optionality and price transparency
  • Used leadership and organization improvement (LOI) to turn around culture from blaming to problem solving
  • Provided sales, inventory, and production planning tools
  • Reduced labor costs and downtime
  • Improved productivity, quality, and delivery
  • Reduced costs by more than $1.6M by sourcing glass from three countries
  • Reduced cost of North American packaging materials by more than $2M
  • Extended vendor payment terms for additional cash release of several million dollars
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Improving output while reducing labor, material, and unit costs (CS297)

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