Using data analytics, AI, and category sourcing strategies to unlock savings, operational clarity, and role definition
This story is for CEOs and PE firms who
- Are struggling with a PE Carve out or organizational and productivity issues after multiple changes in ownership and leadership
- Have failed to recognize savings opportunities due to decentralized, non-strategic procurement
- Are worried about margin erosion due to organizational and supervisory instability
The Challenge
An aerospace components manufacturer underwent several changes in ownership over the years and was then carved out from its corporate parent. Not only had the company acquired new owners but most of the senior leadership was new, including the CEO, COO, and Vice President of Supply Chain. As a result of all these challenges, the company lacked foundational capabilities in procurement, planning, and operations.
Performance drivers were misaligned. Operations focused on efficiency rather than completing productive work, and the workforce was jaded about efforts to improve productivity or reduce costs due to all the past company changes and multiple failed attempts to improve productivity. Procurement focused on material availability rather than cost optimization. With procurement managed independently at six separate sites, spend was disaggregated and the company was unable to leverage economies of scale or capture cross-site synergies, resulting in suboptimal buying and decreased service levels.
Maine Pointe’s post-acquisition analysis of operations and procurement showed the potential for cost savings and cultural change in line with the new owners’ concern to establish a stronger operating model, cost structure, and performance discipline.
Transforming supply chain with focus on risk mitigation, tariff exposure, and cost reduction
Maine Pointe:
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- Established a consolidated spend cube across all six procurement sites
- Enabled and organizational change to center-led procurement for the first time, giving the company the procurement structure it had lacked
- Implemented a Procurement Management Operating System (PMOS) to enable a center-led model and standardize processes across all client sites.
- Installed 35 sustainment and/or Kanban locations to support real-time communication and workflow management in production operations
- Implemented a baseline operations management operating system (MOS), a work center effectiveness measurement system tied to company goals, and an operational planning and reporting tool
- Established Leader Standard Work (LSW) to ensure all supervisors and managers were working in sync and created a common platform for communication, work measurement and leadership
- Trained and coached production supervisors in tools and processes and helped the company establish a skills development track
- Developed templates, standards, and accountability tools to drive execution discipline
- Fostered a cultural change that allowed for continual learning and improvement
Lessons learned for CEOs
- An experienced, hands-on partner makes all the difference in improving processes and lowering costs
- Rapid growth requires new approaches and new opportunities for sourcing, procurement, and governance
The Results
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- Up to 13% improvement in composites manufacturing productivity
- 6% improvement in operations
- $6.7 million in benefits, including 14% average savings on addressable spend
- Extended accounts payable (AP) payment from 60 to 90 days
- Drove sustainability by Implementing procurement management operating system (PMOS)