Case Study 3-07636
Consolidation requires an assessment of the entire business.
IET prepared a detailed and interactive model to allow a management team to assess the possibilities of business consolidation considering the affects of capacity, conversion costs, capital expenditure, working capital, sales, and all overhead categories.
A cold forging company with forty years of history in the automotive industry serving Ford, General Motors, Chrysler, Honda, Toyota and Mazda. With multiple manufacturing plants within Ohio and Michigan, the company services the companies as a tier two supplier to the world market.
"The production team was driven towards a common goal of overall business improvement and the model ensured true consensus and understanding for the managerial team."
To determine an appropriate reaction to tremendous fluctuations in customer demand while maintaining the ability to respond to future demand opportunities in a short time frame. These reactions include shift schedule variations, working capital adjustments, capital investments, and plant consolidations.
IET worked with the management team to develop an interactive business model to determine the real impact of managerial decisions. A wide range of initiatives were assessed by the model and drove a production plan that reduced overall business costs by nearly 40%, while ensuring the ability to increase production as opportunities arise. The model ensured production performance was assessed, working capital options were realistically adjusted, overhead plans were challenged, and flexibility drove a true variable cost plan.
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