Cases

Improving Operations and Reducing Costs for an International Manufacturer of Glass

Challenge

The client, an international manufacturer of glass packaging for pharmaceutical, liquor, food and cosmetic products is a subsidiary of UC’s client based in India. UC had conducted a six month engagement with the Indian client and defined opportunities to reduce costs by Rs 9 crore annually in the area of materials, logistics and energy management. The top management in India turned to UC to evaluate the possibility of replicating the initiatives at the international location and transfer the learning to the new team.

Our Approach 

After discussion with the top management, the following areas were decided for review:

  • Materials (Raw Material, Packing Material, Engineering Spares and Moulds and Accessories)
  • Logistics (Inbound and Outbound)
  • Energy (Power and Fuel)
  • Customer Management

To identify the opportunities in the above areas, UC adopted the following approach:

  • Opportunities in Materials

    1) Reduction in the sourcing price of a key raw material

    2) Batch mix optimisation – usage of alternate material to reduce batch cost

    3) Reduction in batch cost by reducing rejections in processed sand

    4) Revision in packing material specification and improvement in pack configuration

    5) Reduction in packing material consumption

    6) Reduction in mould procurement cost through alternate sourcing

  • Opportunities in Energy Management

    1) Controlling compressed air system leakages

    2) Option for waste heat recovery

    3) Running equipment on variable load instead of constant full load

  • Opportunities in Logistics

    1) Reduction in freight cost using 40’ and 40’ high cube (HC) containers

  • Opportunities in Customer Management

    1) Revisited the current metric for customer profitability and revised it by adding the element of production bottleneck

    2) Defined the pocket-margin framework for customer profitability

  • Established a better communication channel between the international and the Indian teams
  • Defined action plan and responsibilities for implementing the various initiatives.

Impact

The client received a business model to implement the various initiatives in the area of materials, logistics, energy and customer management.