Transforming Your Supply Chain

Situation

An $8 billion consumer products company was facing intense price pressure passed up the supply chain. The company had been operating in a decentralized structure and lacked a rigorous improvement framework. Over the past 18 months it had become clear to the executive team that their existing model was no longer appropriate for driving the magnitude of cost reductions that were being demanded by their customers.

"This company cannot continue to be the high quality industry supplier and remain price competitive."
Industry Expert's Report

Complications

After decades in a decentralized structure where independent thinking had been encouraged and rewarded, implementing a corporate-driven improvement program was going to meet fierce resistance. Creating buy-in across the enterprise would be critical, but the sheer number of facilities (in the triple digits) would pose an additional challenge.

One of the downsides of the decentralization was that many plants had started their own improvement process. There was an "alphabet soup" of initiatives across the enterprise from Lean, to Six Sigma, to TPS, to TPM, to Lean Sigma. Pulling all of these initiatives together into a cohesive improvement framework for the entire organization would require a unique approach. The executive team had their hands full restructuring the organization, and they turned to Stroud for help in implementing an enduring framework for improvement.

Results

Starting from a small pilot project Stroud slowly built buy-in across the organization and over the next 2 years helped the company:

• Close 16 plants
• Generate $90 million in labor savings
• Reduce raw material spend by $20 million
• Avoid large capital spending

"The Stroud team brought a concept of structure and accountability to our organization that is helping us take our business to the next level. The result is an action-based culture that is committed to continuous process improvement in all our operations."
Director of Operations