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Turning around a distressed company and securing OPEX (CS276)



This story is for CEOs who

  1. Need to realign their plan-make-buy-move supply chain to match changes in demand
  2. Want to rein in costs without alienating customers
  3. Need another approach to labor shortages and productivity problems


The Challenges

A die casting and machining company came out of bankruptcy with a new management team, nervous Private Equity investors, and customers ready to sue because of missed delivery targets. The already distressed company then faced a huge drop in demand from a major customer. The company thought their problems would be temporary and they could ride through out or solve them with a 5S program in die casting.


Aligning supply and demand and ensuring that changes stick

SGS Maine Pointe:

  • Revamped and coordinated scheduling between maintenance and operations
  • Closed the communications gap with customers
  • Removed bottlenecks, optimized uptime and plant flow, and reduced defects and scrap
  • Gained a 25% increase in throughput in the CNC machining area
  • Coached teams in effective use of a management operating system and established KPIs
  • Pivoted team leaders toward planning, rather than reacting
  • Aligned resources with falling demand and made sure changes were sustainable even after demand returned


Lessons learned for other executives

  • Operational excellence and footprint optimization are key to improving productivity and quality
  • Improvements require clear communications with customers and between teams
  • Finding root causes and bottlenecks requires in-depth, boots-on-the-ground analysis

The Results

  • $7.5M annualized savings
  • 40% uptime improvement
  • 25% increase in throughput
  • 20% quality improvement
  • Trained and mentored teams and leaders
  • Ensured changes were sustainable despite demand fluctuations

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