Case Study: Operational Transformation – Uncover Key Drivers to Enhance Your Operations

Manufacturer Achieved Sustainable Operations and Supply Chain Improvements and Cost Savings

The founders of a protein bar and snack manufacturing company started out as a small garage-based operation and soon became one of the first in the sector to not only hit the market but explode onto it.

With a heavy prioritization of top line revenue, the owners lacked the operational knowledge needed on the manufacturing and distribution side to make effective business decisions and minimize costs. With an end-goal to look appealing towards investors and to support growth, the owners knew they needed additional capital if they wanted to better position the company for acquisition.

The battle of an overly saturated market

While the manufacturer was one of the original and fastest growing companies in the protein bar and snack sector, soon copycats sprung up and the market quickly became over saturated with lower cost products.

With low-cost brands flooding the market, the manufacturer was experiencing a decline in demand and market share, resulting in excessive inventory and shrinking margins.

In addition, the founders faced inefficiencies, such as eliminating indirect and administrative tasks within their operations and struggled to prioritize improvement projects and effectively see them through to completion. Since the owners had limited experience with foundational operational excellence, they knew outside knowledge was needed to help them overcome these barriers.

Core solutions that drove operational transformation

To overcome the challenges surrounding their lack of sufficient manufacturing experience to drive operational improvements, our team developed a multi-phased approach where we:

• Implemented operational metrics, management tools/training, and facilitated a culture of continuous improvement.
• Eliminated non-value activities and optimized operating standards, including machine speeds, crewing, and indirect activities.
• Created playbooks and visual boards for all SKU’s
• Analyzed demand trends and executed a SKU rationalization to eliminate loss leaders.
• Strategically-sourced key raw materials reducing inventory cost, switched vendors, and negotiated contracts creating a great opportunity to save money.

ROI wins and sustainable operational improvements

After the implementation of operational solutions tailored to the manufacturer’s specific needs, the client:

• Achieved a total labor and material annualized cost savings of $12 million in nine months with an 18:1 ROI.
• Increased production throughput by 25%, while decreasing labor cost per unit by 150%.

The owners were so impressed with the initial results and chose to extend their engagement supporting the outsourcing of all production to regionally beneficial contract manufacturers that greatly reduced cost of goods (COGS), logistical cost, and customer lead time.

The success of this engagement serves as a testament to the power of operational transformation to drive efficiency and enterprise value. 

Contact us to learn how Aprio’s Operations and Supply Chain Advisory Services can help you take your operations to the next level.