Client is a Beverage Products Manufacturer, now in its fourth generation, serving institutional, specialty, and large grocery customers. They were experiencing a decline in net income due to restructuring the ownership and negotiating financing.
Our client was profitable, but after feedback from consultants, leadership concluded the company was underperforming. Costs were increasing due to quality defects, mechanical failures, and a customer-mandated pack size change from 12 to 6 units per case, resulting in a repack of existing units. The 2-million-bottle repack effort was labor-intensive and had to be completed in 3-phases. Additionally, the process disrupted new production, reducing new pallet output down to 2 pallets per hour from the previous 12 pallets. Unplanned line stoppages were costing the company 13 hours of production and 94,000 bottles monthly. The company approached machine maintenance by using a fire alarm approach, which resulted in a high number of repeat failures as issues were never fully resolved.
Cascade Partners’ Restructuring Team was engaged to initiate Quick Response Teams (QRT) with the objective of embedding business fundamentals and enhancing company profitability through quality and uptime improvement.
We established a cross-functional team that was responsible for defining an effective and efficient customer return/repack layout, process, and schedule. Additionally, we implemented Standard Work, Quality Alerts, and Visual Aids to support temporary workforce training.
To address customer-reported defects, we developed a Quality Alert System that included a standardized complaint handling process, defect codes, and visual alerts. This system ensures efficient communication of defects reported by customers across departments, allowing for swift issue resolution.
Furthermore, we created an Equipment Reliability Program that included equipment improvement roadmaps, downtime recording, root-cause analysis, preventive maintenance, and a maintenance management system. This program helps to return equipment to OEM condition and specification, address and prevent chronic failures, and improve overall reliability.
The Cascade Advantage
With changes to their processes, Cascade’s Restructuring Team was able to help significantly increase efficiency. Repack duration has been reduced from about 2,000 hours to roughly 700 hours, a vast improvement of 300% in throughput. Improved maintenance processes reduced downtime by 73%. More reliable systems resulted in overall uptime increasing by 12% resulting in an increased throughput of 816,000 bottles per year and $3 million annually.