Manufacturing

Over the past several decades our team has been at the forefront of manufacturing best practices. For many years our consulting practice helped manufacturers improve their financial performance through operational deployment of good and best practices.

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Over the past several decades our team has been at the forefront of manufacturing best practices.  For many years our consulting practice helped manufacturers improve their financial performance through operational deployment of good and best practices.  More recently a lot of best practices have been defined in a more granular sense by specific philosophies / frameworks such as Lean, Six Sigma, and TPS.

Our consultants are highly experienced in these frameworks and we have customized and deployed these in the interest of operational effectiveness in many environments and industries.  Every manufacturing operation can benefit from improving disciplines and business processes.

Certitude Group has developed a way to couple the operations (cost) with market intelligence (revenue/profit) to further prioritize scheduling and manage reliability issues.  With currently available computing power and data from any ERP system we can build models of entire product portfolios or businesses that show bottom line profitability of customer, products, and transactions.  Bottom line means EBITDA.  We call this approach Enterprise Performance Optimization (EPO).  EPO is very interesting to our clients because it adds a new layer of economic reason to operations.  Read more about EPO here (hyperlink).

Project Examples

Aftermarket Parts Manufacturer:  As with most parts businesses, this one had been highly profitable for a number of years, but more recently profit growth had stagnated.  CG utilized our Enterprise Performance Optimization (EPO) approach and determined that less than 5% of the parts were generating 90% of the profit and at the EBITDA level, 48% of parts were losers.  The implementation project focused on SKU rationalization, kitting policies, improved dealer partnerships and pricing.  Within 12 months the business had improved performance at the EBITDA line by 18%.

Performance Glass Manufacturer:  A $15B coatings and specialty products company wanted to improve the performance of it’s performance glazing division.  A deep recession along with incomplete cost data and methods of understanding profitability drove this division to inadvertently destroy value in it’s more complex market segments.  The Enterprise Performance Optimization (EPO) approach delivered by Certitude pinpointed actionable improvements in sales, pricing, and supply chain.  The Certitude EPO Management Operating System was installed to create a sustainable improvement program with critical information flowing up and down through the organization.  The business enjoyed a bottom line (EBITDA) profit improvement of $70M/year along with a 300% increase in ROIC in year two.

 Automotive Refinish Systems:  Developed customer segmentation model that defined strategic customers and service level requirements resulting in $20 Million (15%) revenue growth.  Customer order fill rate was abysmal at 79%.  Implementation allowed company to predictably deliver complete shipments to customers.  Delivery consistency and increased customer satisfaction led to revenue growth in a static market with no additional investment.

Polymer Sheet Manufacturer:  This division of a $1B global plastics manufacturer was consistently losing money.  In fact, sheet was the most unprofitable business in an enterprise that was struggling to breakeven and grow the top and bottom lines.  Built through acquisition, the enterprise had never been properly integrated.  The Sheet business was unprofitable to the point of dragging down the entire company.  Our Enterprise Performance Optimization (EPO) approach was deployed to develop a granular understanding of the profitability issues.  The sales team was focused (and rewarded) primarily on price and volume but had no visibility of profitability related to their activities.  Implementation of new procedures and metrics supported by our Management Operating System allowed the business to smartly reduce the complexity of the product mix, channels, and production scheduling.  The business became highly profitable with a new Sales culture that refused to take unprofitable business.  The EBITDA was increased over 150% in year one and the market value of the enterprise increased 60% in 18 months.

Global Pharmaceuticals:  The company was trying to digest several major acquisitions and was falling short in R&D laboratory practices.  There were no globally recognized best practices for management of R&D and the lab assets.  A comprehensive effort was launched to define global best practice standards for controlling variables in laboratory management.  After pilots were completed, a complete rollout of improved practices was conducted along with classroom and hands-on training.  Once lab operations were stabilized a global R&D turnaround was launched, the main highlight of which was a disciplined approach to stage gate management of development and rigorous review of result and plans at each gate.

Contract Manufacturing:  Client was transitioning from pilot production to “scale up”.  Delivered manufacturing operations improvement program resulting in ten-fold throughput capacity increase and $47 Million (7%) cost reduction with no new capital or facilities investments.  Redesigned operations procedures, material flow, and work centers.

Consumer Products Manufacturing:  Designed and delivered rebalanced manufacturing layout with flexible packaging lines that could accommodate more product lines at higher speeds.  Improvements resulted in revenue increase of $32 Million (29%).  Capital initially planned for facility expansion was redirected to other projects.

MoD Naval Dockyard:  The Ministry of Defense had contracted with a private sector defense industry firm to operate the largest dockyard in Western Europe.  Developed hands-on consulting approach to helping first line supervisors plan and execute work.  Dockyard utilized the capability to estimate, budget, schedule, and then deliver as promised to acquire sole source status for refit of frigates and nuclear submarines from the Ministry of Defense (MOD).  Two competing dockyards were later decertified by MOD due to redundancy.