Background
Our client has acquired a beverage manufacturing and distribution business in a market that has doubled in the past decade and that continues to grow at almost 10% yearly. While competition is high and leading manufacturers have been gaining share, there is an opportunity for our client to leverage its brand equity and existing production and distribution infrastructure to capture a fair share of the market.
The immediate task for the newly appointed team is to capture the lost market share and drive growth while optimizing costs to reach positive profit within the next 2 years. The longer-term vision is to double volume and revenue within the next 3 years.
While the team was confident to have the right resources and capabilities to address the growth challenge, they were looking for external support to drive product availability and manufacturing costs optimization.
Problem Being Solved
Our team was tasked to address three specific challenges:
Ensure finished goods are available to meet the increasing sales demand
Proper S&OP process
Production efficiency improvement and sustainment
Optimize packaging materials costs
Value engineering - Specifications optimization
Alternative suppliers and Commercial negotiations
Increase production capacity to address year 3 and beyond expected demand
Defining capacity needs and equipment specifications
Supplier selection and commercial negotiations
The Outcome
A MEAP partner project lead was assigned to the project for a 6-month period working on site and remotely. A comprehensive assessment was performed in partnership with the client’s team and plans developed to deliver the defined objectives. A weekly update review was set with the client's management team to share progress and address bottlenecks and barriers - which are expected as we implement the necessary cultural changes to drive performance.
While the journey was more challenging than expected due to external factors specific to the location of the project, the client, with the support of the MEAP partner, has been able to meet its key objectives.
The Manufacturing and Supply Chain teams have been able to deliver the required sales volumes which were 50% higher than previous year, and they have done so with 20% less employees.
Packaging costs were reduced by 25% through weight optimization, introduction of new suppliers, and commercial negotiations. The resulting savings contributed to the client turning profitable earlier than expected.
These very positive results enabled the client’s management to win shareholders early trust which resulted in a multi-million Dollar investment on a new production line expected to be installed in the near future to address the growing demand. The MEAP partner led the new line RFQ, negotiations and contract signature.
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