Monday, September 26, 2022
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Quality Problems, Late Deliveries, Lost Customers

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Portfolio companies often run into complex situations that drain resources and stifle performance.  In this case, a packaging company saw scrap levels quadruple, late deliveries skyrocket and good customers leave.  The management team was doing the best they could, but had limited bandwidth and experience with similar situations.  The sponsor could not afford the current level of performance, and the costs and risks of replacing the management team were high.  ProAction became, on a variable cost basis, their operating partner.

Background:

  • $250k negative monthly variances ($1.7m per year in total)
  • 5 GM’s in 5 years
  • Customer Attrition

Actions Taken:

  • 2-day operational assessment found root causes and were immediately transitioned into execution
  • Implemented a tiered management system
  • Conducted quick change over improvements
  • Managed COVID situation

Activities as the interim GM:

  • Started a daily operator autonomous maintenance process for Presses and Converting
  • Started a weekly maintenance PM process for both Press and Converting
  • Implemented a tool crib min/max for critical replacement tooling parts in Converting
  • Set up a converting staging area for all machine lines
  • Started problem solving tools with supervisors and leads in both Print and Converting
  • Relaunched the Safety Committee
    • Added First Responders on each shift
    • Action plans developed for each area from opportunities and tracked weekly on the Tier Board

After operational stabilization was achieved, we began implementing tools and training internal leaders to maintain the new level of performance.

Impact

  • Output improved between 50% and 70% depending on the line
  • Reduced scrap and rework levels by 50% in 8 weeks, demonstrating a 90% decline in 12 weeks
  • Hit customer service target levels and eliminated the backlog

About The ProAction Group

ProAction is an operational consulting firm that works with Private Equity to do three things:

  1. Help you win good deals (and avoid bad ones!) through our pre-close Operational Diligence.
  2. Help your management teams as they transition from an entrepreneurial approach to a scalable, process driven leadership path.
  3. Help you maximize the value of your portfolio companies through the implementation of operational excellence.

We focus on three sectors: consumer products, manufacturing and distribution. We have experts in Lean Manufacturing, Six Sigma, Sales and Operations Planning, Inventory Strategy, Sourcing, Logistics and Human Capital Development. We were founded in 1995 and are headquartered in Chicago.

For Further Information:
Timothy Van Mieghem
tvm@proactiongroup.com
The ProAction Group, LLC
Tel: (312) 371-8323
http://www.proactiongroup.com

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