Operational Excellence in Precision Manufacturing

Close up of workpiece turning operation on a lathe, showcasing a metal workpiece being precision cut by a carbide tool with chips flying and coolant spraying. The spindle rotates steadily as the toolh

INDUSTRY

Metals

Opportunity

A private equity firm sought to evaluate a target company’s operational capabilities prior to acquisition. The target, a precision manufacturing business with multiple facilities, exhibited inefficiencies in maintenance, inventory management, and ERP systems. These gaps posed risks to scalability and profitability, particularly in a high-mix, low-volume production environment. The firm needed a rapid, actionable assessment to identify risks and value-creation opportunities.

Approach

A comprehensive Rapid Plant Assessment (RPA) was conducted across three facilities, focusing on production processes, equipment condition, engineering capabilities, and ERP functionality. The assessment included onsite evaluations, stakeholder interviews, and financial data analysis. Key performance indicators (KPIs) were benchmarked against industry standards to pinpoint gaps and prioritize improvements. The process was constrained by limited time and access, requiring a focused methodology to deliver actionable insights.

Solutions

Centralized Maintenance: Incorporate centralized maintenance to enhance equipment uptime, consistency, and scalability.

ERP System Upgrade: Replace the outdated ERP for improved inventory tracking, job costing, and reporting.

Lean Operating System: Implement 5S (workplace organization method designed to improve efficiency, safety, and visual control), Visual Management, Standard Work, and Kaizen events in high-volume areas to reduce waste and overtime.

In-Process Quality Control: Establish early quality checks in production to minimize scrap and rework.

Results

Operational improvements focused on high manufacturing overhead rates were identified as a key area for cost reduction. Target could achieve significant cost savings by reducing overtime and indirect costs through lean practices. Enhanced scalability with improved ERP and maintenance systems, and quality improvements lower costs, positioning the Target for sustainable growth and higher margins, which informed the private equity firm’s acquisition strategy.

Let’s connect and work together

If your business or a business in your portfolio is facing a current challenge, our team can provide a qualified perspective and experience-based guidance toward an optimized resolution.