operational improvement

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Overview

Whether you are a manufacturing business that operates well-oiled machines or not, we will help you operate like one. We have helped clients in both service and manufacturing industries drive competitive advantage through operational excellence. We have experts in supply chain optimization, strategic sourcing, organization transformation, and more that will collaborate with stakeholders throughout the organization to add efficiencies without disrupting the day-to-day activities that are the lifeblood of your business.

CASE EXAMPLE

6-Week Due Diligence: Conducted operational assessment that confirmed potential 4-5% manufacturing & logistics savings opportunity for PE firm considering purchase of a franchise bottler


Situation

 

  • Client was a PE firm looking to invest in a cash flow generating business that had potential for operational improvement and re-sale
  • Target was one of the largest franchise bottlers of a global beverage company
  • Footprint of target gradually expanded into new territories, developing bottling plants both organically and through acquisitions
  • Client wanted to assess savings opportunity by optimizing bottler's manufacturing footprint and improving operational efficiency against world-class performers
  • Client wanted to conduct a 5-year capex assessment to address the future growth demand across key buckets of plant and machinery, trade and marketing assets

Approach

  • Identified the key cost buckets across the value chain and improvement levers within the buckets
  • Benchmarked target’s plants operations against world-class leaders on KPIs including:
    • Raw / packaging material yield
    • Maintenance & Repair spend (MRO)
    • Fuel and power consumption
    • Labor productivity
  • Assessed maturity of procurement and logistics function and estimated opportunity through strategic sourcing of freight and packaging material
  • Created network optimization model to identify optimal manufacturing footprint by:
    • Examining demand at major market clusters 
    • Analyzing manufacturing cost and throughput at different plants
    • Evaluating cost of transportation from plants to market clusters
  • Developed capex estimation model for line expansion, visi-coolers and other capital equipment items

Impact and Results

  • Robust framework of 100+ levers on opex improvement and 50+ levers on capex improvement
  • Identified savings of 3-4% on the total cost base (raw material procurement, conversion, outbound logistics) through operational improvements and network optimization
  • Flexible, detailed capex plan by plant that adjusted based on cluster demand growth