Business growth means different things to different people; Increasing turnover; growing the workforce; increasing the number of items sold or product range offered, but we believe the most important criteria is increased profit, which may come about as a result of one or more of the above factors. That is why we work with our clients to increase their profitability by looking at their sales, operational costs, capability and supply chain to discover which is going to produce the best results both short term and long term. Because any kind of growth normally has a cost associated with it, we also always like to see what grant funding is available to support the growth plans as this can often make a big impact on the timing and strategies adopted.
1. Manufacturing: Supporting a Company through Rapid Growth Phase
An SME client has shown substantial growth over the last few years and to continue to grow needs to invest in larger premises and additional equipment, both of which require substantial capital investment.
Talking through the issues with the client we decided the highest priority was to relocate so we have engaged a team of commercial property consultants whom we work with to support the client in relocating to larger premises. We are supporting the client with identifying appropriate grants and funding to cover the costs.
- Following extensive property searches we are currently helping the client buy his existing (leased) premises so that the current building can be extended and modified to suite his needs.
- Various funding options identified and initial funding in place.
- Once the building has been purchased the next phase agreed is a process optimisation review to improve efficiency and reduce costs.
2. Manufacturing: Sales Team Restructuring
A heavy engineering company that produced plastic processing machinery was losing market share due to poor quality and installation delays. The primary reasons for this arose from not fully understanding their customer’s requirements and incorrect specification of equipment by the Sales Team.
A review of all Sales processes and interfaces with Engineering Design was undertaken and a change plan put in place to address the issues found. This included:
- Creating a Specification Template that ensured detailed customer requirements were captured
- Creating a set of ‘standard’ machine designs to address specific market needs that could be tailored to match the detailed requirements
- Restructuring of the Sales and Engineering functions to address the communications issues
- Product quality immediately improved as the machines specified were fit for purpose
- Both cost and time of manufacture was reduced significantly improving margin
- Engineering were involved in key presales meeting to ensure equipment design was appropriate and fit for purpose
- Sales improved from ~£3M to > £10M over three years (>300% improvement)
- Margin improved from <10% to > 25% over 18 months
3. Manufacturing: Create New Products to Restore Declining Sales
A plastics processing company had declining sales on its mainstream mature products. The product Development Team had little support from management and were demotivated so very few new products were being introduced, and those that were had low margins.
The team was restructured and a 1-year development plan was put in place that involved some capital expenditure on new equipment. This was fully backed by the Board of Directors.
- A range of new, high margin, products was developed and introduced that targeted niche markets and had a high cost of entry to deter competition
- The Development Team became far more motivated and were able to work with existing products as well to reduce costs and improve quality
- New products moved from 1% to 15% of sales within a year with virtually no loss in existing business
- The cost of poor quality for existing products was significantly reduced, scrap levels fell from >15% to < 10% within the year, improving efficiency and margins on existing products