“We sell a commodity product. The world market has become saturated and prices have been in decline over the last number of years. While we have being cutting costs wherever we can at our 11 European plants, our margins have been eroded to such an extent, that without a further significant reduction in costs, we are likely to be looking at a loss-making operation in the near future”.
Overview of Changes
Individual Country Structures were replaced by a single corporate structure which resulted in a major reduction in the cost of both Senior and Middle Management. By focusing on production scheduling and the matching of product mix to Plant capacities, the manufacturing model was transformed from a ‘Batch Process’ to a ‘Continuous-Batch Process’ which resulted in an overall increase of 15% increase in production capacity by the end of the project; making it possible to close the three highest cost plants in the group without a loss in volume. The annualized saving was approximately £3.5M.