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Efficiency Improvement

"The increased Enterprise Value at sale has been worth twenty five times the project costs. This is a very worthwhile Project!" - Investment Director

Industry:

Packaging for fresh food (Private Equity)

Turnover:

£85 million

Profit:

£1.4 million

Support Level:

2 Consultants, 9 months

Objective: 

A threefold increase in profit prior to the business sale

Results:

  • Profit tripled to £4.1 million
  • Increase in Enterprise Value of £12.7 million

Why did this private equity firm bring chartwell on board?

The client already had a substantial share of the UK market, not expected to grow significantly.  The Private Equity owner wanted to achieve maximum enterprise value and was looking to improve profit margins.  An opportunity assessment was carried and £2.7 million of cost savings were identified in areas including manufacturing efficiency and material usage – the client’s objective was to realise these cost savings within 9 months.

Results of the 9 month project

The team achieved an increase of 46 % in thermoforming efficiency, £2.7 million in cost savings, making the business three times as profitable for no capital expenditure.  The business was sold shortly after the project.  The increased Enterprise Value as a result of the improvement work was £12.7 million.

Examples of project work

 

What was the biggest lever in realising the improvements?

FOCUS AREA:

The factory had 18 lines, one of which was significantly larger than the others and could run higher proportions of recycled plastic.  Improving this line would have significant impact on the overall efficiency.

PROBLEM:

The speed of the biggest line was deemed to be limited to 16 cycles per minute, assumed to be constrained by the diameter of the main cooling calendar roll – a new roll would involve significant CAPEX.

The speed of the line was perceived to be at the maximum; how did you break this constraint?

ACTION:

The project team carried out trials and uncovered the underlying reasons for the perceived speed limitation of the roll.  It was observed that their were quality issues with the material exiting the roll – one of these issues was a diagonal ripple on the right side of the plastic.

METHOD:

  1. Forensic examination of the problem showed the time between groups of diagonal ripples matched time it took the middle and bottom rollers rotate

  2. A key parameter in controlling the amount of ripple was the force applied to the sheet between the middle & top rollers

  3. Adjusting the angle between the top and middle rollers adjusted these forces and we were able to reduce this ripple to allow us to increase speed to 18 cycles per minute

What were the results of eliminating this problem?

RESULTS:

After solving this problem, and removing other quality problems through root cause analysis, the team were able to increase the line speed from 16 cycles per minute to 25 cycles per minute.


In addition the team:

  • Improved changeovers and reduced scrap levels
  • Reduced tool change time from 7 hours to 45 minutes

They increased thermoforming efficiency by 46 %.

Learn more about what we do:

What We Do

We embedded ourselves in your team to help your business achieve more than you believe is possible.

Methodology

See our best practive problem solving methodology in action at Medica, a pharmeceutical packaging manufacturer.

training

Join us at CATCH - we will be running hands on problem solving training in a real life factory setting.

Graduates

Find out more about how to apply, in Germany and the UK.