Private Label Food
SITUATION
Major manufacturer of private label food products needed to increase profitability by optimizing operational performance while improving customer satisfaction.
DRIVER GOAL
- Achieve and sustain an operating profit growth rate of 5% per year.
- Improve order fill rate to 98.7%.
- Improve on-time delivery to 92%.
- Reduce customer complaints by 50%.
RESULT
- Reduced SG&A expenses by 20%.
- Increased throughput by 22%.
- Improved management of finished goods inventory and an overall reduction in salvage materials.
Case Study
Optimize Performance & Improve Profitability
Issue
A major manufacturer of private label food products needed to increase profitability by optimizing operational performance while improving customer satisfaction.
Highland Approach
The focus of The Highland Group’s analytical team was to create a shift within the client organization towards becoming a customer-centric operation. This involved eliminating under-performing SKUs, identifying and removing process constraints and wastes, tightening up functional roles and responsibilities, and training internal teams to drive and sustain continuous improvement.
Actions Taken
- Increased output to free up capacity on constrained production lines.
- Developed self-directed work teams to continue throughput improvements on the balance of the production lines post-project.
- Improved customer service and fill rates to at or above target levels.
- Reduced quality issues.
- Increased raw material yield.
- Reduced conversion cost per case.
- Implemented a methodology for managing SKU and customer profitability that resulted in a significant net margin increase.
- Designed and implemented a company-wide reorganization, including a new Marketing function.
- Reduced the plant’s fixed cost and SG&A expense by an average of 20% through the elimination of non-value-added activities.
- Trained all managers and supervisors on the use of a management operating system.
