PCG has assisted leading companies in the consumer product sector to navigate both strategic and operational issues.
Through robust analysis and fact-finding processes we have supported our clients in identifying new opportunities for product growth, revitalising brands, developing new markets and addressing key resource issues.
Addressing capacity constraints
Immediate capacity constraints and cost issues were resolved by restructuring shift patterns and exiting unprofitable contracts.
Following a number of years of strong growth, a major producer of value added meat products for the QSR industry had utilised its available capacity and needed to expand its operations.
As a result, increased use of high cost production facilities and use of offsite storage were impacting profitability.
A major capital expansion plan had been developed, however the owners of the business were unsure of the risks and potential returns and were hesitant to make the investment required.
The due diligence review found that the investment case for expanding operations provided an attractive return through increased production efficiencies, decreases in indirect labour required and overhead savings.
The project also identified other options that were available to the owners that could delay or avoid capital investment.
Simplifying the product range and focusing on high value customers would create sufficient capacity while maintaining profitability, while restructuring shift patterns would create additional production time and tendering offsite storage would significantly reduce a major cost driver.
The client was able to address its immediate capacity and cost issues by restructuring shift patterns and exiting unprofitable contracts. This enabled a decision on expanding operations to be delayed until additional long term supply contracts were secured.
Further opportunities to reduce inventory levels identified as part of the project were also implemented.
Capital investment plan savings