Cases

Reducing Costs for a Leading Manufacturer of Aluminum Foils and Products

Challenge

The client is into manufacturing aluminium conductors used for electrical transmission and distribution. The company was facing the following issues:

  • Losses for 3 years in a row (monthly cash loss of Rs 3-5 million)
  • Lack of clearly defined direction for the division
  • Lack of awareness of plant utilisation and capability
  • Lack of fixed customer base
  • Weak marketing set up
  • Poor recovery levels and poor quality
  • High level of rejections in goods manufactured
  • Delay in the servicing client orders
  • High level of receivables (outstanding for more than 6 months)
  • Absence of any forecasting process

Our Approach

UC assisted the client in the following ways:

  • Defined the strategy for the division
  • Built an excel based model for product rationalisation, capacity planning and identifying the bottlenecks to make investment decisions
  • Initiated discussions with suppliers on renegotiations and long-term relations
  • Designed a new organisation structure
  • Implemented a 360 degree performance evaluation system
  • Initiated projects with involvement from company personnel in areas like inventory reduction, scrap reduction, AR reduction material movement, downtime analysis and training
  • Define the blue print of information requirements of the organisation
  • Prepared a layout of the plant to facilitate efficient information flow

Impact

The client achieved their highest recovery level of 80.68 per cent. Production levels increased from to 596 tons. Mechanical breakdown dropped by 60 per cent.