A multi divisional packaging supplier to the consumer products industry faced significant business issues surrounding inventory valuation, cost of sales, inventory management and production planning. The company produced 230 million thermoformed pieces, 311 million paperboard pieces and 21.5 million contract packed items per year. They needed to address key customer requirements surrounding demand collaboration, order visibility and inventory management. In addition, the company was experiencing major financial challenges to reduce inventory levels by 50%, reduce operating costs by at least $3 million, and close a $3 million sales gap.
A E78 partner completed an operations and information technology assessment of the organization leading to the identification of a significant number of operational, financial and technology improvements.
The organization changed its focus from relying on a technology solution to adopting lean manufacturing concepts, including:
- Establishing a culture of performance to budget and KPIs
- Reducing cycle times from order receipt through production
- Eliminating customer demands for excessive inventory to minimize late shipments
- Reduction of inventory movements within and between sites
- Reduction in waste by optimizing production efficiencies