Background and Challenge
Escalating military conflicts resulted in an increase in defense spending and a subsequent rise in demand for a global aerospace drive systems supplier.
As a single-source supplier, L.E.K.'s client was growing revenues by double digits and generated a backlog of more than twice its annual revenue. However, poor operational practices had resulted in a double-digit decline in profitability.
We were asked to identify potential areas for improvement in manufacturing facilities and operations.
Approach and Recommendations
We developed a turnaround plan for the organization that prioritized and addressed operational and cost improvement initiatives (e.g., strategic sourcing, inventory management, manufacturing operations, capex, etc.). The plan had an immediate impact on improving operating performance, and our worked directly with functional leadership to realize savings across several key projects.
- The team identified annual cost savings driving a 33% increase in annual EBITDA
- The client was able to secure critical refinancing using a CIM created by us that described the clear plan for a return to profitability
- A key customer relationship was repaired based on improved confidence in quality processes