Our client was a multibillion-dollar global manufacturer of performance materials for laminated glass, aftermarket window films, protective barrier and conductive films and rubber processing chemicals. Its products are used in architectural, automotive, alternative energy, electronic devices, consumer and industrial applications. The company is in a highly-complex global market.
Overburdened with the legacy liabilities of its former parent company, our client and its 14 subsidiaries had been beleaguered by a protracted four-year bankruptcy that included multiple lawsuits involving shareholders and lenders, repeated revisions of its reorganization plan and millions of dollars in attorneys’ fees. Leadership recognized they needed assistance to rapidly exit this situation.
Maine Pointe was initially engaged to work with one of the subsidiaries in the US. This led to an additional 12 separate initiatives across four divisions in the US, Europe and Asia. Our challenge was to release ‘fast cash’ for self-funding momentum, infuse a culture of operational excellence across all business units and help develop the supply chain capabilities to successfully transition from a domestic US customer base to a more complex worldwide demand base.
Maine Pointe’s Total Value Optimization™ approach included:
Leader and Organization Improvement (LOI)
Sales and Operations Planning (S&OP)
Case Study 1: A multibillion-dollar nylon manufacturer (US)
Maine Pointe was engaged to work with the manufacturer and its rail, road and ocean carriers to help them respond to market changes. Our solution involved implementing a radical new way of approaching the market place with a reconfigured distribution network built on strong, collaborative relationships. This led to a dramatic shift in the company’s products and the markets it served. As a result, through a consolidation of carriers, the client’s carriers benefited from an 80% growth in volumes and a 22% margin enhancement. At the same time, our client, the nylon shipper, transformed its procurement and logistics operations to improve product transit times from 7-12 days to less than 24 hours for internal shipments while improving global deliveries to intermediaries and end-customers by two to three weeks. This enabled the company to grow from $1.8bn to $2.3bn within two years. In addition, our client was able to reduce working capital by $30M annually.
Case Study 2: Manufacturer responsible for 40% of laminated architectural and automotive glass worldwide (USA/EU/Asia)
This division had two plants with higher operating costs per unit compared to the third, despite having similar functions and operations. The client’s plans included opening a new plant in China which was expected to have even lower operating costs. Maine Pointe was engaged to improve overall equipment effectiveness (OEE), reduce waste and energy costs and implement a standardized management operating system (MOS), reporting system and set of KPIs to track performance in all four plants.
Maine Pointe’s multi-disciplined teams deployed OEE, lean and fundamental supervision tools to drive throughput performance and lower total costs. We developed and implemented a Management Operating System (MOS) that identified operating problems in real time, identified, categorized, and determined root cause for major process losses and implemented solutions to eliminate them. In addition, we introduced a maintenance management process that incorporated operational intelligence into the S&OP and manufacturing planning process to ensure reliable delivery.
As a result, the plants in this division realized more than $29M in annualized profitability, including savings of $24M in yield and throughput, $2M in annualized energy savings. In addition, overtime was reduced from 30% to 15%, yielding annualized labor cost savings of $2.6M, dormant projects on the ‘active’ list were reduced by 40% and overall equipment effectiveness (OEE) reached >80%.
Case Study 3: The world’s largest manufacturer of solar control and safety window film for automotive and building applications (UK/US)
Maine Pointe was engaged to improve the quality for customers and strengthen various assets for improved profitability. The division had a healthy business performance of $220M in revenue and 25% EBITDA but wanted to grow by 15% per annum over the next 5 years. The client’s market was seasonal and, historically, had limited annual growth of only 2%. Our TVO™ approach included implementing a Sales and Operations Planning (S&OP) process, lean methodology including remapping layout with a focus on SMED (single minute exchange dyes) to reduce changeover time and a real-time Management Operating System (MOS). We introduced an inventory management control process linked to the S&OP to remove slow-moving inventory and reduce inventory levels enterprise wide. Maine Pointe also helped renegotiate the company’s agreement with its long-term LTL carrier.
As a result, the client realized a 35% improvement in productivity, a 48% reduction in inventory and a 49% reduction in transportation cost. The overall financial impact was in excess of $30M, including $11M in improved EBITDA, and $18M decreased working capital requirement.
Case Study 4: Leading manufacturer and supplier of chemicals for rubber processing and related industries (USA/EU/Asia)
This division operated at 11 locations worldwide. Leadership was taking a ‘one size fits all’ approach to communication, regardless of country and culture. This, combined with unclear management objectives, reduced the effectiveness, efficiency, and quality of the product. In addition, maintenance work was reactively rather than proactively planned and executed, and annual overtime was at 19%. Maine Pointe implemented leadership focus and alignment (F&A) and rolled those goals down to the supervisory level through the ORCI (Owner, Responsible, Consulted, Informed) accountability process across all locations. We developed and implemented a Management Operating System (MOS) with continuity and relevant key performance indicators (KPIs) as well as disciplines, meetings, procedures and behaviors required to effectively turn data into information and information into action. We introduced a Maintenance Management Operating System which increased proactive maintenance work by 67% and decreased annualized contractor spend by over $500K.