A company in the food industry was no longer able to make a profit. Increasing competition, changing customer wishes and high fluctuations in raw material prices had led to structural losses.
One of the banks had asked us to perform an analysis and to help management prepare the desired improvement program.
Activities and results
Firstly, we have stabilized the costs of raw materials. By bringing in experts who were able to better predict and fix the currency and raw material prices. Furthermore, the various locations were found to have overcapacity. This partly due to lower demand but also to an unclear market focus. The company tried to combine low series, high margin products with high volume, low priced products.
Based on “Overall Equipment Effectiveness” and “Portfolio Analysis” tools, we advised to consolidate production lines, focus on specific market segments, rationalize customers and product portfolio.