Unique Opportunities in Manufacturing and Distribution
Manufacturing businesses are special because of the amount of money and capital required for equipment, materials, inventory, labor, warehousing and distribution.
Most organizations have significant savings opportunities that can convert into profit and reduced capital expenditure. Those numbers hit the bottom line.
When you sell your business, the value is based on the EBITA (earnings) and a multiple of the EBITA (typically 3X - 6X). Those companies with mature systems and processes, efficient manufacturing and inventory, and high inventory turns will receive higher valuations than those who do not.
Inventory Turns
✳︎
LEAN Six Sigma
✳︎
Innovation
✳︎
Quality Systems
✳︎
Automation
✳︎
Continuous Improvement
✳︎
Inventory Turns ✳︎ LEAN Six Sigma ✳︎ Innovation ✳︎ Quality Systems ✳︎ Automation ✳︎ Continuous Improvement ✳︎
Reducing Cost Through Labor Efficiency
Employees do not intentionally perform not efficient activities. Almost all of the employees I have worked with over the years want to come to work, do a great job and be appreciated by their management.
I typically improve labor efficiency by 10% - 20% in 2 - 6 months.
I work with the manufacturing teams to develop and implement the systems improvements. The result is a reduced cost of manufacturing and increased morale from the team who feels great about the improved efficiency.
Reducing Cost Through Inventory Reduction
When we create efficient manufacturing and supply chain systems we:
1) Have what the customer needs when the need it.
2) The ability to manufacture or source before running into backorder.
3) Availability of lowest cost raw materials to supply our needs.
What is the total inventory investment in your organization? (Raw materials, WIP, Finished Goods)
When we reduce that by 1/3, what will you do with the inventory $$$ that is converted into cash?
Reducing Cost Through Improved Quality
Quality is Expensive.
Cost of defects.
Cost of customer complaints / refunds.
Cost of rework.
Cost of inspection.
By re-evaluating the manufacturing, quality and inspection processes we create systems that prevent quality costs.
Case Study of Manufacturing Transformation
Highlight Reel From
KDM Consortium Webinar
Thanks to Nel Varenas of
https://strategicvalueplus.com for hosting us.
Thanks to Nel Varenas of
https://strategicvalueplus.com for hosting us
During this podcast, I share an example of a company struggling with backorders. I was able to lead the team to streamline manufacturing, reduce inventory and reduce inventory. Moving them from about four inventory turns to about 6 turns.
Introduction to the manufacturing problem. At the end of a long sales cycle, the products required for the client solution were not available. Supply Chain Bottlenecks, Inventory & Backorders Solved.
Minimizing Finished Goods Inventory. Boost Sales_ Optimize Product Availability & Strategy.
How to reduce or eliminate backorders and reduce inventory. Free up cash flow by reducing inventory. Inventory Management_ Unlock Your Company’s Financial Potential.
Supplier Inventory Hacks_ Save Money and Avoid Backorders.
Reducing cost by implementing LEAN Six Sigma processes, improving manufacturing and right-sizing inventory. Manufacturing Efficiency_ Speed Up Product Turnaround.
Conclusion of the project. Inventory Reduction_ Lean Manufacturing Success Story.
I am a member of the Manufacturing Resource Group