Private Equity and Operational Transformation

Customer asked Elliott Davis: “Would you help us define and accelerate the operational transformation within our U.S. operations?”

Context

Leading plastics manufacturer had exposure to multiple end-markets. The customer had recently been acquired by a large private equity group that was looking to boost performance.

Customer had been struggling with poor on-time in-full (OTIF) delivery to customers and low overall equipment effectiveness (OEE), which created a significant backlog, despite 24/7 shop-floor operations. Further, the business’s cost structure was burdened with poor labor productivity ratios and high material-usage variances.

Our Approach

Elliott Davis broke the project into five work streams, leveraging DMAIC principles:

(1) Data clarity and metric optimization

• Processes for collection and cleansing of data that generated meaningful metrics to inform new metrics for management use

(2) Overall equipment effectiveness (OEE)

• Root-cause analysis of primary contributors to poor molding equipment, process performance
• Improved equipment performance enabled workforce rightsizing

(3) Maximizing customer satisfaction

• Identified drivers of OTIF issues, addressed root cause, and built ongoing monitoring tools
• Improved OTIF (and customer satisfaction) generated demand increases from customers

(4) Material variance

• Mapped material flow and addressed each waste-producing process

(5) Lean and 5S implementation

• Implemented visual management strategies to provide transparency to shop-floor performance

Customer Results

• Increased EBITDA by ~4x
• Order backlog reduced by 75%
• On-time-delivery increased from 45% to 93%
• $480K annualized savings from scrap reduction
• Plant-wide OEE increased by 41%
• Reduced inventory by ~30%

We Can Help

For more information on this and other topics, contact a member of our team.

The information provided in this communication is of a general nature and should not be considered professional advice. You should not act upon the information provided without obtaining specific professional advice. The information above is subject to change.