The challenges
The plastic components supplier to the automotive industry had fallen well behind the competition both in terms of sales and profit margin. The gross profit margin and the personnel cost ratio in particular were uncompetitive. The causes were to be found in the extremely complex nature of the products and customer requirements as well as organizational inefficiencies replete with duplication. The low level of capacity utilization and the high rejection rate increased the financial pressure on the components manufacturer.
Our approach
Following an in-depth analysis of the current situation as well as the internal processes and performance indicators, short and medium-term areas of action were defined and quantified in conjunction with the management team. The aim was to significantly improve the company's earnings situation in two to three years.
The areas of activity were then prioritized and defined in greater detail to establish concrete corrective measures. This was achieved by developing a top-down objective for each functional area backed up with concrete bottom-up measures. A wide range of digital tools from the Horváth toolbox guaranteed rapid and well-grounded success.
The solution
The comprehensive earnings improvement program represented a potential EBIT improvement of almost 4 percentage points for the components supplier. This extended across a variety of areas: structural changes, portfolio optimization and excellence in manufacturing. A total of well over 200 individual action items were prepared which will take effect over the next three years. In addition to pure earnings improvement measures, a new management concept for the customer was also developed. The new organization can therefore be managed with even greater efficiency in the future.
Learn how your company can also benefit from a sustained improvement in efficiency.
Your Contact
Stefan Roeske