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Growing margins while making company and its products more competitive (CS278)


This story is for CEOs who

  1. Need help finding cost savings opportunities fast that enable it to grow margins
  2. Want to secure company’s competitive position by keeping products affordable
  3. Are seeking sustainable change that continues long after consultants are gone

The Challenges

A company that provides transportation companies with operations and logistics services and provides the defense industry with command, control communications, compliance, intelligence, surveillance, and reconnaissance (C4ISR) needed to grow its margins. The company thought ahead: they wanted changes they could sustain given the right tools, methods, and models.


Improving throughput and bolstering strategic procurement for sustainable cost savings

SGS Maine Pointe:

  • Identified, piloted, and demonstrated design for excellence (DfX), focusing on design for commonality both to control complexity and drive engineer change order (ECO) improvement
  • Accelerated strategic procurement with thirteen initiatives, including a global vendor management system (VMS) and stronger negotiation tactics
  • Supported margin expansion and leveraged incremental cost savings
  • Conducted cost, capacity, and capability (C3) analysis to assess and re-orient the company’s make vs. buy identity
  • Improved throughput with reduced assembly time; overcame labor shortages with contingent labor, and used DfX to improve quality

Lessons learned for other executives

  • Cost control is cross-functional across the entire plan-make-buy-move supply chain
  • Design for excellence (DfX) is an important tool for raising quality and throughput
  • Feet-on-the-ground analysis is essential for finding savings opportunities that keep a company competitive

The Results

  • Achieved 5:1 ROI
  • Garnered $15.2M annualized savings
  • Improved production throughput/quality 120%+
  • Reduced SKU 26%
  • Created playbook to guide company in future long-term change
  • Identified and piloted procurement, engineering, vendor, and labor strategies

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