Caught in a cycle of declining profits and constant firefighting, an automotive accessory manufacturing facility was stuck – unable to break free from day-to-day operational challenges. With costs rising and productivity falling, the business slipped to a negative 2% EBITDA. L.E.K.’s Operations and Supply Chain team helped the facility regain control and achieve an 8% EBITDA run rate in less than one quarter.
Challenge
- Post-COVID sales normalization revealed inefficiencies that were previously masked by a sales surge.
- The company’s operational costs remained high while sales returned to normal, leading to declining productivity and negative profitability.
- Stuck in firefighting mode, the client couldn’t pinpoint the root causes of their profit leakage or operational inefficiencies.
Approach
L.E.K. implemented a rapid, hands-on diagnostic and improvement cycle, combining real-time problem-solving with immediate action to deliver quick wins:
- End-to-end diagnostic: Analyzed the entire supply chain, from procurement through distribution, identifying key points of productivity leakage.
- High-velocity iteration: Diagnosed, piloted and iterated on solutions quickly – focusing on takt time analysis, materials requirements planning (MRP) and workflow balancing – delivering results week by week.
- On-the-ground implementation: The team worked alongside client staff on the factory floor, integrating changes in real-time to ensure seamless adjustments and improvements without disrupting operations.
Results
This hands-on, collaborative approach delivered immediate and measurable results (see Figure 1):
- Achieved 5+ percentage points of EBIT improvement in less than a quarter.
- Identified a path to 13+ percentage points of EBIT uplift for the following year, with ~70% of this gain attributed to enhanced manufacturing productivity.
The L.E.K. team tracked weekly metrics during the project to ensure continuous improvement and minimize defects. The client was also provided with a weekly scorecard, a comprehensive playbook outlining the full methodology, and an implementation roadmap to sustain and replicate these improvements.
Conclusion
L.E.K.’s methodology of rapid diagnostics and hands-on implementation broke the client out of their operational gridlock, delivering fast and lasting results. If your business is stuck in firefighting mode and unable to reach its full potential, our Operations and Supply Chain team can help you achieve similar transformative outcomes. Contact us to learn how we can drive sustainable improvements for your organization.
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