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Case Study

Viewing posts from the Case Study category

25 Jan 2020

Manufacturing Footprint Optimization: Global Expansion (ASEAN)

By Arthur Elliott

Background

Global firm needed to increase China/Asia manufacturing capacity. EWA was engaged to develop and implement an Asian Manufacturing Footprint Strategy to drive long-term profitability.

Approach

Step 1: Identifying the expansion criteria
  • Company analysis
    • Expansion criteria: labor supply/costs, government incentives, inflation rates, availability of raw materials, transport & export logistics, supply chain vendor availability
Step 2: An in-depth comparative analysis of 6 selected countries
  • Philippines, Malaysia, Indonesia, Vietnam, Thailand & China
    • Expansion recommendation: Thailand
Step 3: On the ground interaction
  • Negotiated conditions for property purchase & property management (waste removal, perimeter security, etc.)
  • Negotiated investment incentives with Secretary General of Royal Thailand Board of Investment
  • Qualified local Thai vendors to support the company’s manufacturing location
  • Met with local legal and accounting firms to identify the necessary criteria for establishing a business entity
Step 4: Hands-on implementation
  • Property was purchased and all pre-construction permits/licenses/registrations were acquired by October 2017
  • Plant designs, construction budget/timeline & all construction partner contracts were finalized in November 2017
  • Plant construction and equipment installation began in January 2018 and was completed in April 2019
  • Identification and recruitment of supply chain, distribution & logistics partners was completed in February/March 2019

Results

  • Government Incentives
    • 8 year tax holiday from CIT, 50% tax reduction for an additional 5 years
  • Cost Reduction †
    • $22.0M tax savings over 10 years
    • $4.3M annual labor savings after 5 years
    • $1.8M annual material savings after 5 years
    • $120/unit average freight savings
  • Company Growth †
    • 42% increase in sales over 5 years
    • 53% increase in revenue over 5 years

† Company Forecast

25 Jan 2020

Manufacturing Footprint Optimization: Plant Closure

By Arthur Elliott

Background

  • As part of a global restructuring of business units, a multinational chemical company was closing one of their Chinese production facilities.
  • EWA engaged as Project Leader with responsibility for closure implementation.

Approach

Six months prior to plant closure
  • Closure strategy (budget, timing, expenditures, government relations, etc.)
  • Defined implementation team (Operations, HR, Legal, Security, IT, etc.)
  • Development of communication plans (staff, government, external, etc.)
  • Security risk assessment (employee unrest, physical & IP assets theft, etc.)
Three months prior to plant closure
  • Implementation of operational and protective security measures
  • Finalized equipment & inventory disposition, decommissioning plant, etc.
  • External stakeholder negotiations (governmental agencies, landlord, etc.)
  • Obtain approvals from business zone, governmental authorities, etc.
  • Identification of compliance and payment issues, severance packages
Upon plant closure and after
  • Finalization of equipment disposition and plant demobilization
  • Filing government documentation in keeping with the registration, business license, board resolutions
  • Filing of all necessary financials, bank accounts, tax, VAT rebates, registered capital and customs documentation
  • Competition of all de-registration and governmental documentation and plant turnover to the landlord

Results

  • No theft of IP assets, physical violence or governmental authority repercussions
  • 100% of employees signed employment forms
25 Jan 2020

Manufacturing Footprint Optimization: Site Selection

By Arthur Elliott

Background

  • German-owned chemical company with an ageing facility was being pressured by local authorities to relocate to an “official” chemical processing zone, as part of the Chinese government’s initiative to combat industrial pollution
  • EWA was engaged to conduct a comprehensive site selection process and provide the client with quantified site recommendations

Approach

Step 1: Create functional definition of plant
  • Purpose for expansion, customers, supply chain, products, capital equipment, etc.
  • Definition of the site requirements & specifications:
  • Size of plant, land requirements, structural requirements, utilities and consumption, logistics, labor force requirements, ground compaction, water table, number of employees, manufacturing space, office space, employee facilities, etc.
Step 2: Analysis of company performance influencers
  • Logistics, location of customer base, location of suppliers, location of business partners, freight & transportation costs, current property costs, current operational costs, government incentives, etc.
Step 3: On the ground interaction
  • Identification of 7 business/chemical parks for further exploration based upon site & company criteria
  • Personal site visits, face-to-face negotiations, meetings with other companies located in the individual business parks & interaction with local government officials
  • Tours with company executives
  • Negotiations and confirmations of land price and tax incentives
  • Analysis of the impact on startup and operational costs
Step 4: Recommendation of the 3 quantified location options with full analysis

Results

  • Significant tax and land incentives were attained by EWA negotiations
  • Client approved EWA recommendation and final negotiations are currently in process.
  • Client has engaged EWA in the role of “Owners Representative” for follow-on activities including coordinating design and overseeing construction
25 Jan 2020

Supply Chain Optimization: Global Expansion (Mexico)

By Arthur Elliott

Background

  • EWA was engaged to develop and implement a Mexican supply chain footprint strategy
    • (identify and qualify local suppliers, evaluate options for assembly operations, identify 3rd party logistics providers, negotiate tax incentives, hire local senior management and evaluate existing DCs)

Approach

Step 1: Define Project Objectives and Requirements
  • Align on opportunities, volume requirements, cost targets
Step 2: Deploy Formal Process & Develop Core Elements for Analysis
  • Identify Products to be outsourced – one product was 48% supplied from China to US
  • 80% of component spend can be supplied from Mexico
  • Labor & Logistics savings favored Product Assembly in Mexico – faster than In-House
Step 3: ID Potential Suppliers and Obtain Analytical Data
  • Identified component suppliers within Mexico
  • Interviews and factory visits to develop supplier “short list”
  • Suppliers provided detailed proposals with pricing, QC control plans, price breaks for increased volumes, samples for performance testing
  • Same process for identifying & qualifying Assembly and Packaging contractors
Step 4: Hands-On Implementation
  • Negotiations conducted with suppliers to finalize
    • Cost, payment terms, projected productivity improvements, forecasting lead times
    • Sharing of productivity/volume benefits, Inventory stocking requirements
  • Negotiations conducted with contractors to finalize cost and value-added services:
    • Provide incoming QA inspection and manage supplier returns
    • Monitor and expedite deliveries from suppliers
    • Assemble and Package product & shipment to customers or distribution centers

Results (Outsourced Product Line)

  • Cost Reduction
    • Reduced inventory vs China ($21MM cash) and shorter lead times, better cash flow
    • Cost reduced 5% ($6MM) vs sourcing from USA, with potential for additional reductions
    • Eliminated tariff impact
  • Other Benefits
    • Quick set-up
    • Low cost to implement
    • Good access to suppliers for USA-based QA and technical staff
    • Good quality outsourced assembly and packaging
    • Elimination of 2 DC’s from proximity to Western USA customers
    • Stable trade environment
25 Jan 2020

Supply Chain Optimization: Supply Chain Assessment

By Arthur Elliott

Background

  • Asia-Pacific manufacturing operations of a global chemical company was struggling to make on-time deliveries, carried excessive inventories, and had excessive freight and logistics expenses (primarily from expedited shipments)
  • EWA was engaged to identify operational problems and to develop/implement corrective actions to improve logistics & supply chain processes

Approach

Step 1: Onboarding & Alignment
  • Gain thorough understanding of client’s overall business, markets, manufacturing operations, current supply chain, and logistics network
Step 2: Model current state of client’s supply chain and logistics operations
  • Current logistics network
  • Process assessment
  • Determine customer requirements
  • Organization structure analysis
Step 3: Analysis to identify required changes and potential opportunities
  • Performance
  • Voice of Customer
  • Processes
  • Organization Design
Step 4: Develop recommendations and action plan
  • Short term actions
  • Medium term actions
Step 5: Hands-on implementation
  • Interim Supply Chain Manager
  • Develop RFP for logistics services
  • Implemented significant organizational changes
  • Support transition of new organization & process (bi-weekly project implementation meetings)

Results (Outsourced Product Line)

  • Savings achieved through rate negotiation & reduction in expedited shipments
    • Carriers were consolidated & outbound logistics processes were improved, with 15% reduction in freight costs
  • Improvements were made to forecasting & planning generated the expected results
    • Inventories were reduced by nearly half, generating US$MM cash
  • Customer service levels improved dramatically
    • On-time deliveries improved to > 90%
  • Organization stabilized & capabilities improved
25 Jan 2020

Performance Improvement: Growth Development

By Arthur Elliott

Background

A manufacturer of returnable packaging materials for the automotive industry with stagnating sales engaged EWA to identify and qualify sources of business growth potential.

Approach

Step 1: 360° Opportunity Assessment
  • An extensive review with the client of the construction and technical aspects of the current product portfolio, the market, adjacent verticals, competitor products & customer base.
Step 2: Opportunity Identification
  • Identification and validation of 12 key industries as qualified verticals for expansion – based upon ease of adaptation, market size, growth potential and profit margin
  • Total of 1300+ potential new customers
Step 3: Short-listing of 5 core industries of focus for a deep dive analysis
  • Off Road Vehicles, HVAC, Outdoor Power Equipment, Pharmaceuticals, Consumer Electronics
  • Total of 370 potential new customers
Step 4: Opportunity Leveraging
  • EWA prioritized the top 10-12 companies per sector (sales channels, geographical location, etc.)
  • EWA conducted an in-depth investigation of each company & senior management and then delivered a biographical summary and contact information for 63 companies

Results

  • The client signed contracts with 9 new business partners
  • 13% increase in sales within 18 months
25 Jan 2020

HR & Executive Recruitment: Interim General Manager & Recruitment of a Permanent General Manager

By Arthur Elliott

Background

  • A metal fabrication WOFE located in Changzhou with a US parent was faced with a situation involving an ineffective General Manager
  • EWA was engaged to:
    • Recruit and supervise an Interim General Manager
    • Identify, qualify and recruit a permanent General Manager

Approach

Step 1: Recruitment & Supervision of an Interim General Manager
  • Preparation & alignment
  • Selection
  • On-boarding & engagement management
Step 2: General Manager Candidate Criteria, Development & Assessment
  • Hard & soft skills definition
  • Individual interviews
  • Selection of 3 top candidates
Step 3: General Manager Candidate Due Diligence
  • Determination of scope
  • Desk-top audit & field research
  • Forensic review
  • Legal issues
Step 4: General Manager Candidate Final Report
  • Analysis, recommendation & rationale

Results

  • Successful search to find a General Manager fitting a specific set of client requirements:
    • Integrity
    • Employee relations
    • Financial
    • Operational skills
  • Six-week search resulted in:
    • 3 highly qualified referrals
    • 1 individual was hired
  • Three months after the new GM reported to work:
    • Plant productivity increased from less than 55% to over 85% and rising
    • Staff productivity increased 15% in the same time frame
    • Customer complaints reduced to less than 1 per month (vs. 7+ over the previous 12 months)
25 Jan 2020

HR & Executive Recruitment: Organizational Improvement Initiative

By Arthur Elliott

Approach

Step 1: Organizational Assessment
  • 360° assessment of factors impacting performance
  • Diagnostic individual & team structured interviews, which found:
    • Lack of trust
    • Hoarding of information
    • Lack of shared goals
    • Unacceptable individual & group meeting behavior
    • Conflicting perception of goals
Step 2: Organizational Development
  • Group behavior improvement
  • Individual behavior improvement
  • Interdependence
Step 3: Organizational Design
  • Revised organization structure & reporting processes
  • Development & implementation of a new internal communications plan

Results

  • Follow-up surveys (individuals & group) reported significant improvement:
    • Cooperation
    • Information sharing
    • General trust
  • Dramatic improvement of key performance indicators (6 months later):
    • Time to market rate improved by 50%
    • Unwanted staff turnover was decreased by 15%
    • SG&A costs were reduced by 21% on an annualized basis
    • 18% reduction of inventory costs
    • Sales costs were reduced 14% due to improved expense controls
25 Jan 2020

HR & Executive Recruitment: Organizational Development

By Arthur Elliott

Background

A US privately-owned manufacturer of semi-custom industrial conveyor accessories had experienced a severe decline in performance over the last 3 years and was also unprofitable for the last 2 years. EWA was engaged to develop solutions to improve organizational efficiency.

Approach

Step 1: Comprehensive organizational assessment
  • Structured diagnostic interviews were performed with individuals, interdependent functional teams and department teams)
  • Observations were conducted of department teams, cross-functional teams and senior management interaction and interdepartmental communication
  • Information flow and reporting processes were also monitored
Step 2: Analysis of individual and group goals
  • Assessment analysis identified several key issues which negatively affected the company’s organizational effectiveness including lack of trust, hoarding information, no shared goals, specific non-constructive meeting behaviors, and overlapping perceptions of individual roles
Step 3: Development of corrective actions f to increase performance through improved interaction
  • Supporting groups and members to develop their interactive abilities, information sharing, trust and becoming more self-aware of their impact on others
  • Working with individuals on negative behaviors, being a better observer of how others reacted to them and self-tallying instances of back sliding
  • An internal event was conducted and all stakeholder viewpoints, inputs, finding and action steps were presented and discussed with the teams, new interaction norms were established and agreed and then teams were trained

Results

  • Company attained breakeven status at the end of the year
  • Sales grew by 10%
  • Time to market decreased by 50%
  • 15% reduction in staff turnover
25 Jan 2020

Risk Management: Competitor Espionage

By Arthur Elliott

Background

A manufacturer of automotive components who had a dominate position in the market was concerned about loss of corporate assets to local competitors. The task was to review and assess company internal prevention processes & procedures, identify areas of weakness and to develop improvements to company security and asset protection programs.

Approach

Step 1: Definition of 4 core areas of investigation
  • Physical Security – offices, factories, physical access control, guard force effectiveness, etc.
  • HR Issues – clear expectations, recruiting due diligence, proper access control, leadership/”tone at the top”
  • IT Systems, laptops, and mobile devices
  • Security policies and procedures, control & monitoring
Step 2: Conducted a 2 month audit of internal processes & procedures
Step 3: Recommendations for corrective action with a particular focus upon Physical Security and Control & Monitoring
Step 4: Implementation of numerous corrective programs including
  • CCTV, IT server access control, intrusion detection, firewall and anti-spyware, vetting of vendors, visitor security, access control, data storage & disposal procedures

Results

  • No new acts of corporate espionage or theft
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