Getting to the Root of the Problem
Survival in a shrinking industry requires being efficient, economical, and responsive to customers. With a product lead-time of two to three days from receipt of order, the client, a leading paper converting company, was struggling to meet their customer deliveries.
The company had already restructured in an attempt to reduce overhead and was once again on the verge of bankruptcy. Smaller local manufacturing plants had been combined into larger regional plants. In an attempt to reduce overhead, order processing and customer service had been centralized.
The regional operations were under pressure to integrate the remaining staff and equipment from the closed plants, meet customer demand, and reduce inventory. In effect, to do more with less and get better results.
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Teaching and Old Dog New Habits
Time changes all things, and business is no exception. For manufacturing firms, adapting to change can be costly. Equipment is expensive and often there is a difficult choice between specialty machines that do a limited set of functions well, and less efficient but more flexible multi-function machines. Even under the best circumstances, the “right choice” is valid only for the current moment.
For a leading paper converting company, they faced a massive change in their industry. New communication technologies had made the use of paper envelopes appear relics of a bygone era. With the core of its business a fraction of what it had been, the company was in process of remaking itself as a supplier of more customized products. But they were still running it on the old equipment, and with profits down, there were no resources available for new capital expenditures.
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Moving from Chaos to Order
For 60 years, a national paper converting company had been viewed as an industry leader. Changes in customer demands, competitive pressures, recent site consolidations, financing changes and market cycles were wreaking havoc on site performance and the company’s overall profitability. Company leaders turned to Empowered Performance to help them improve their core business processes through formalizing their Sales, Inventory and Operations (SIOP) Planning.
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