High-End Custom Label Manufacturer
Performance Improvement and Operations Assessment
The Company, a provider of high-end, custom printed labels and packaging for manufacturers, distributors, and brokers in North America, was feeling economic pressures from customers. With the Company looking to expand, they wanted to analyze the production operations and make improvements prior to expanding their business. MainStream was engaged to evaluate the customer order system and evaluate the accuracy of bidding in addition to performing a high-level plant and financial operating assessment.
The Company made an acquisition in 2009 and noticed that profit margins decreased as production needs and costs continue to increase; however, margins for the acquired business were slightly higher than the organic business. In addition, one of the Company’s main customers changed from managing all labels to allowing individual brands to do their own negotiation on their prices, increasing pressures to lower price or lose the business.
When MainStream began the assignment, the Company did not have any tools in place to analyze customer data and identify trends to determine if profits were eroding. In addition, reporting wasn’t being kept real time, so meaningful metrics and data were unavailable to the Company’s management.
As a part of the plant assessment, MainStream identified production layout issues and material mismanagement, which presented significant savings opportunities for the Company. MainStream identified additional operational improvement opportunities and recommended the implementation of Lean manufacturing concepts to integrate and improve the Company’s performance.
MainStream also assessed the Company’s quoting process and gathered data to compare the quote given to the customer to the actual materials and labor costs that went into the product. This was done to test what was actually occurring in the plant, in order to provide management with data to address the linkage issues from customer service to manufacturing.
MainStream recommended that the Company go through a strategy deployment session to better align metrics with overall goals of the organization. This process would facilitate the development of financial metrics to better monitor the business and the creation of a bidding tool to evaluate jobs to take during the year. In the plant, recommendations were made on Lean training and areas of focus, such as information boards tying into the overall strategy of the organization.