The following are a few of our recent case studies that show the range and depth of Jetstream Profit’s capabilities.
Client: Major international producer of trucks
Assignment: To improve company profitability by 7% through efficiency improvements and reduction of working capital. Responsible for the working capital and operating assets work stream.
Results: An increase in profitability of 6.4% in the first year and a reduction in working capital of Euro 100 millions. The results included a restructuring of finance to introduce shared services for debtor management, a restructuring of distributor agreements and distributor financing of vehicles, more focused KPIs and fundamental process improvements to eliminate wasted time and unnecessary steps.
Client: Major government body
Assignment: To analyse the budgets of the body and the group’s other functional bodies from the year 2000 through to 2007, identify trends and issues and use this information to inform the budget committee and help them formulate questions to challenge the 2008/2009 budget submission.
Results: An informed analysis resulting in the identification of economic trends and challenges facing the organisation and its functional bodies; a set of tools for budget analysis that can be used year on year; the identification of areas for the budget committee to probe concerning the budget submission.
Client Quotes: “The observations and questions table is great – that’s the kind of high-level work we want….overall it is great – we particularly like that there are things brought out we would otherwise not have spotted, and value added to the information with the suggested questions, issues and critiques.” Scrutiny Manager
Client: Aerospace supplier
Assignment: Together with the MD, develop and initiate a sales improvement programme.
Actions: Definition of the company’s unique selling proposition; bringing structure to the targeting and pursuit of sales; development and implementation of key performance measures; development and implementation of templates and tools to assist with sales management.
Results: Improved sales management and implementation; increased sales
Client: Aerospace manufacturer
Machine Effectiveness – using ‘Lean’ improvement techniques, Jetstream Profit (JSP) has helped increase a critical machine’s productive capacity by 80%. A vacuum forming machine making quality parts for an aerospace supplier had a 3 week backlog of parts to produce and the situation was getting worse. In a three day Kaizen workshop, utilising the company’s own workforce, JSP facilitated improvements in tool and material change-over times, machine set-up and programming and parts scheduling. Effective use of the machine was increased from 50% to almost 80%, allowing the company to eliminate its backlog and reduce costs.
Seat Arm Assembly – Before the ‘Lean workshop’ this seat arm assembly cell was operated infrequently by 3 to 5 operators ahead of the main production line. The lead time was two days, with a process time of 49 minutes for each arm. The cell inventory was over £50,000 and the operators walked over 100km per year! After the workshop, operated by one person, the cell starting at the same time as the main production line. The number of parts in the process was just one (single piece flow) and walking by the operator was virtually eliminated – saving on shoe leather! The process time was improved by 39%, giving an overall productivity improvement of 56%.
Client: Electronics Designer and Manufacturer
SALES, MARKETING, AND PROFIT IMPROVEMENT – FROM LOSS TO PROFIT IN WEEKS
Our primary contact, an accountancy firm, was concerned about his client who was running unprofitably and needed a sales drive. The company had lost money for three years and the Accountant was trying to help them raise finance by re-mortgaging their factory. The company’s sales were down and we were asked to go and meet the MD with a view to doing a sales drive.
Prior to meeting the MD of the client company, we collected the latest detailed accounts from the Accountancy firm. We could see immediately that the gross profit for the last two years was unacceptably low.
At the meeting with the MD we told him that before considering ‘doing a sales drive’, we needed to know the profitability of his products. There was no point in driving sales of any unprofitable products, something we have come across in other companies.
WHAT WE DID
It was agreed we did not want to do a sales drive of products that were unprofitable. The MD did not have the information on the costings and profitability of his products, or know how to get it. We started with the production manager who was able to produce all the information on costings with some guidance and improvements to the spreadsheets. This involved including the last sales prices and showing the calculated margins. The spreadsheets were then ranked by margin. This revealed that 47% of all products sold in the previous 6 months (let alone the last 3 years) were sold at low margins, or negative gross margins. Some products were being sold at more than 100% negative gross margin, i.e less than half the direct cost of labour and materials!
The production plan on orders booked was reviewed for the next 2 to 3 months period. From this information an action plan per client and product was undertaken. Training was given to the MD and team on negotiating and raising prices, also on reviewing and changing specifications, so as to ensure no customers were lost.
In all, the costing and profitability work with the production manager took only two or three days, because most of the information was there. Customer negotiations started taking place within four of our working days in the company. Within 2 weeks the MD had achieved major price rises of some 35-40% with an international Footsie 100 company and in 3 weeks had received repeat orders from this major customer. The product was unique and the client’s customer was happy that his future supply was assured.
From that point we then reviewed the features and benefits, marketing literature, website and mail shot enclosures for the follow on work. We also worked with MD on clarifying his accounts and putting in key performance indicators.
The order book improved. The company went into profitability within weeks, and was making up for the first six months of losses for the year. Six months later at the year end the company had achieved a profit. The MD was much happier, understood the running of the business better, was more confident for the future, did not have to re-mortgage his factory, and was already investing in improvements to the factory.
And the Accountant was happy as we had saved a client for him – so satisfaction all round.