A Return to Profitability: Improving the Supply Chain Strategy

CLIENT INDUSTRY: Specialties Chemical Manufacturer

SOLUTION: Operational Excellence

A Fortune 500 company requested assistance improving the profitability of a recently acquired chemical company. The company was previously family-owned and marginally successful in their region. The company lacked a supply chain strategy and standard work in their operations.

Business Challenge

Our primary goal was to quickly return the business to profitability. Our business assessment pointed out several challenges:
The business was not profitable
They lacked a clear product/customer strategy
No supply chain strategy
No standard, repeatable processes in their day-to-day operations
This was a family owned business that lacked standards and a culture of continuous improvement. One of our key deliverables was to improve their ability to identify and improve business processes after we left.

Solution

• Conducted a site-wide baseline analysis of the company’s operations and practices.
• Conducted in-depth interviews with the leadership and workforce to understand their business and current challenges
• Evaluated their product line and corresponding inventory strategies
• Performed direct observation of key processes – measuring cycle time and process waste
• Conducted targeted Kaizen sessions to improve key operations

Results

• Returned the business unit to profitability through product rationalization, improved inventory practices and targeted operational improvements
• Identified critical issues with their product portfolio and inventory practices.
• Recommended they discontinue the production of several high-volume, commodity product lines and focus on profitable offerings resulting in an annual savings of over $300K
• Aligned inventory policies with profitable products resulting in an annualized savings of over $100K
• Conducted several Kaizen sessions to improve product changeovers in their Reactor operations – focusing on SMED (Single Minute Exchange of Dies) and Point of Use principals. Also, led a Kaizen to develop a compliant procedure for Confined Space Rescue in their Reactors and storage spaces.