Consumer Products
SITUATION
Major manufacturer of exercise equipment engaged The Highland Group to develop and execute a plan to increase earnings and reduce costs.
DRIVER GOAL
- Generate $5 million in additional earnings, net of fees for the North American division of the business by year end.
- Double current inventory turns to 5.8.
RESULT
- Generated $5 million in additional earnings and doubled inventory turns.
- Recognized savings of more than $1 million.
- Achieved a 6:1 return on investment.
Case Study
Improve Customer Service & Optimize Margins
Issue
A major manufacturer of exercise equipment engaged The Highland Group to develop and execute a plan to increase earnings and reduce costs.
Highland Approach
The Highland Group’s Discovery and Design process revealed declining margins due to poor customer service, ineffective new product introductions, severe quality issues, and out-of control distribution costs. The team designed a plan to target each of these issues, launching cross-functional teams armed with process improvement techniques and implementing work management systems to measure project gains and ongoing performance.
Actions Taken
- Consolidated satellite facilities and closed three facilities entirely.
- Initiated operational improvements which provided for reduction in labor force (and cost), overtime charges and heavy equipment expense.
- Installed process performance metrics in all departments.
- Moved the product refurbishing operation to free up warehousing space.
