Multi-million dollar furniture manufacturer operations improvements
CompassLead was engaged by a multi-million dollar furniture manufacturer experiencing operational difficulties due to a recent explosion in sales growth over an 18 month period. The plant headcount had increased by 400% and relocated to a larger facility to support the sales growth, but the operational processes were not keeping up with the challenges of the increased demand.
Gross and net profits were not increasing with the increased revenue. Cash flow was limited and the organization was unable to meet client delivery dates due to insufficient systems for product estimating, costing, production planning and shop management.
CompassLead was able to assess and diagnose process and system requirements. They helped the organization determine “actual” and “standard” costs and determined new operational practices and systems for:
- estimating and costing
- shop floor planning
- scheduling and production management
CompassLead also implemented an exit strategy for ill-fitted products lines.
With CompassLead’s help, the organization realized a 350% increase in profits. The ill-fitted product line was successfully phased out. On-time delivery increased from 25% to 85% (and rising). Positive cash flow was regained and the available capacity was filled with profitable business.