Margin Building

Situation

A well-known frozen food manufacturing company in the US was experiencing a slowdown in their planned growth rate.

Problem

The organization was looking to reduce manufacturing costs for the purposes of utilizing those dollars for their new sales and marketing strategy.

Solution

I was brought in to work with the operations team on the development of that cost reduction strategy, with an initial goal or target of $3.0M within 12 months. With that team, and through the utilization of tools such as SWAT, GAP and Pareto analysis, we determined that our bang for the buck was going to come from raw material utilization or yield improvement.

Benefits

Once the program was rolled out, we were able to quickly gain margin through operational improvements, tracking, SPC tools, etc., delivering on that $3.0M target within 9 months. Ultimately the team delivered $6.5M in bottom line material savings over a 3 year period. One of the additional bi-products of this work was that we were able to reduce non-value added steps within the operation, leading to additional cost reduction in labor. A final bi-product of this work is that they saw a significant improvement in quality and product consistency.

For additional information, contact Scott Buchele at 909-747-8616 or seb@performanceenterprise.com.