Case Study: Chemical Manufacturer
This was an extensive project involving a company experiencing severe financial hardships.
As a result of negotiating a special low-priced deal with one of its national clients in order to get bragging rights to use this big company’s name, this business had cut its margins “to the bone.”
This “no-hiccup” tactic may have been acceptable for a highly efficient organization, but this firm did not have the culture to effectively make money while operating in its present manner.
This project involved a complete redesign of wages and benefits.
Additionally, we began a series of small group Continuous Improvement exercises to identify and implement changes to reduce costs and improve efficiency in all divisions of the company.
We also launched a suggestion program with monetary awards for ideas selected that resulted in:
- A revamped master production schedule to achieve a 98% order fulfillment ratio,
- A 20% reduction in inventory,
- A doubling of inventory turns through better purchasing techniques, and
- A reduction in Accounts Receivable DSO to 43 days from 55 days.
Additionally, we also installed a company-wide incentive program for all employees based on pre-tax profitability and liquidity.