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

Written by Maine Pointe | Jan 29, 2024 4:51:39 PM

This story is for CEOs who

Want to increase EBITDA quickly and sustainably
Are concerned about the loss of confidence in customers and employees
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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