Improve Return on Invested Capital by Radically Improving Capacity Utilization

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1 Manufacturing and Industrial Operations Improve Return on Invested Capital by Radically Improving Capacity Utilization What if you could Increase top line growth without increased capital expenditure by improving capacity utilization? remove bottlenecks by rapidly improving efficiency, availability and quality at process trouble points? Improve labor productivity, and reduce unit costs by optimizing Sales & Operations Planning (S&OP) disciplines? build leadership capability and employee skills while also improving retention? develop an agile culture that adapts to market changes ahead of your competitors? With Proudfoot, you can. As the cost of capital is set to rise in 2018 and the USD further depreciates against the Yuan and other competitor currencies, arbitrage opportunities from offshoring production will dissipate. Many industrial operations carry excessive debt and underutilized assets on their balance sheets. Now is the time to reexamine and transform the balance sheet and your operations. Within manufacturing, Proudfoot has realized approximately US $3.5 billion in benefits for our clients, and typically achieves an ROI of between 4 and 10 times the cost of our programs. We have completed thousands of successful transformation projects over 72 years and our engagements our often cost/benefit neutral before completion. Proudfoot can sustainably transform your organization to improve operational performance, reduce risk, maximize your return on invested capital by exercising our core competency in realizing people transformation. Of Proudfoot s last 1000 engagements 621 were results based, delivering $5.6B in annualized benefits; 110% of results delivered

2 Combining aspiration with implementation brings transformation Proudfoot designs, implements, and accelerates operational and digital transformation through people. Realizing tomorrow s results, today. Enabling People to Transform Organizations. Proudfoot works with organizations to solve strategically important problems that impede top-line growth, or bottom-line results, by bringing people to the forefront of the solution. Boots on the Ground: We collaborate with front line employees and supervision, middle management and senior executives where the work gets done, using our industry expertise, to implement change. Measurable Benefits. We create and implement solutions that generate a significant return on investment. A return seen in the P&L within the life of an engagement and typically fully realized in the first year. Importantly, we focus on developing and building the capability of our client s people, so they can do it themselves, next time. In short, we help people change the way they work to change their business for the better. They change their outcomes. We help them realize tomorrows results, today. Financial, operational and cultural What if you could Create an agile, change-capable business and harness the power of your people to do it? With Proudfoot, you can.

3 Our breadth of Manufacturing/Operational experience Across the value chain Research & development Sales & commercial Purchasing & procurement Production Warehousing & distribution common challenges Controlling new product development funnels Producing effective business cases for new products Project plan and critical path synchronization Effective use of people within R&D Ineffective and/ or poorly used sales management tools and systems Inconsistent management and coaching of sales staff Achieving physical ROI Lack of success metrics Blurred accountability and governance Accurately defining specifications Lack of leverage impacting purchasing costs Suitable management tools Efficient production plan Effective resource management Waste management Capacity constraints and bottlenecks Excessive material utilization and or excessive rework Changeover management Shutdown/turnaround overrun Effective resource management Capacity constraints and bottlenecks Shift change management Conformance to service level agreements Quality control Poor logistics planning, scheduling and order management proudfoot solutions Project management transparency Improved cycle times R&D stage gate mgmt. Cost avoidance Risk reduction Time to market Sales organizational realignment Channel management Key account management Sales productivity Customer investment Discount/ net price management Cost and margin improvement Optimizing call center operations Service level agreements Cost avoidance Purchasing process mgmt. Best practice skills and training programs Sourcing waves Unit cost reduction Improve saleable yield Effective execution of production plans Short term planning and variance analysis Bottle neck identification and rectification Supervisor effectiveness Forecast translation into effective resource requirements Improved use of availability Capacity utilization Labor efficiency Management operating information system Reverse logistics Reliable, predictable operation Impact areas supply chain Supply chain leadership skills Demand planning and forecasting Supply chain process controls Tendering processes Project management skills and tools SKU rationalization Cost and margin improvement energy Reducing energy costs and consumption rates Stabilizing peaks Raise energy awareness Improve cost of capital investments maintenance Equipment reliability programs Downtime root cause analysis remedial action programs Optimization of maintenance scheduling Supervisor effectiveness Employee alignment programs health & safety Cultures for safety, reliability and predictability Motivation for change Organizational leadership, structure and alignment Effective communication systems supply chain Leadership engagement at all levels Organizational alignment Cultures for continuous improvement Change readiness Coaching and training (e.g. agile, lean, six sigma, certification, etc.) Service-oriented teams

4 We have a world of experience (600+ quantifiable projects worldwide) A LARGE HIGH-SPEED, INJECTION- MOLDING PLASTICS manufacturer had grown through acquisitions resulting in inconsistent operating processes. The CEO wanted to reduce total costs while improving delivery capabilities through plant consolidation, improved capacity utilization, supply chain redesign with emphasis on fixed operating and transportation costs across the network. 1. The consolidation plan was completed within the 150- day timeline and the manufacturing footprint was reduced from 8 plants to % increase in machine utilization 3. 20% increase in throughput 4. 20% reduction in freight costs 5. $20M achieved in annualized benefits THE CEO OF THE MEDICAL DEVICE manufacturer implemented a cost reduction initiative to combat squeezed margins through internal lean working teams. He soon realized the initiative could not deliver targeted savings. Scope included wall-to-wall production, maintenance, planning, procurement, product & packaging, labor & material across 3 manufacturing plants in 3 countries, & 4 of 20 distribution centers % increase in productivity 2. 80% reduction in overtime 3. 21% increase in overall equipment effectiveness 4. 18% improvement in packaging cycle time % reduction in purchase price through contract renegotiations International leader in the manufacture of PAPER PRODUCTS had stripped out operating costs but the President was determined to find ways to sell more products in new channels as well as improve gross margins. Scope included the redesign of the distributor and end user sales processes to maximize seller productivity. 1. Increased top line growth by 7% 2. Number of sales calls per seller increased 48% 3. Sales conversion rates increased 33% 4. Improved mix of products being sold resulting in increased margins

5 Manufacturing fast facts Improved productive working hours by 30% Increased top-line growth 12% 31% Improvement in productivity Improved plant efficiency 19% 48% Reduction in rework in the manufacturing processes Improved throughput 35% Reduced overtime 55% Reduced scrap and waste 44%

6 Our Scorecard According to Source Global Research, only 38% of clients agree that consulting firms add more in value than they charge in fees. At Proudfoot, we have consistently overachieved, delivering an average ROI of over 400% within the first year. 621 IMPROVEMENT PROGRAMS Of our last 1000 engagements, 621 had specific targeted financial benefits. The remaining were milestone measurements. $5.6bn YEAR 1 BENEFITS REALIZED $16bn within 3 years. Learn from our experience 110% 400% RESULTS DELIVERED Financial benefits achieved compared to targeted benefits at the beginning of the project. YEAR 1 RETURN ON INVESTMENT Average ROI gained by clients within the first year. BEST INTERNATIONAL PROJECT Proudfoot and Rio Tinto s partnership on the Oyu Tolgoi project has been recognized by the Management Consultancies Association and selected as finalist for the award of Best International Project 2017 SERVICE PROVIDER OF THE YEAR Proudfoot received Service Provider of the Year for completing a comprehensive revamp of all areas of operations for the company, resulting in many operational changes, improving efficiencies and profitability across the board.