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.
