How to increase your EBITDA in Manufacturing;
You have tried all cost cutting measures on your shop floor and still not where you want to be?
After all initiatives taken, you feel that manufacturing floor looks and feels more chaotic than ever?
Here is why it might be so:
Every company at their very early stage of their life cycle are pretty lean. The product, the clients and process are as simple as they can be. But during the course of time the product lines, the clients increase and processes start getting complicated. It becomes hard to follow the product, catch the delivery dates etc. The cost starts building up in the parallel. It comes to a boiling point and EBITDA starts suffering. Company urges to take some actions. And most of the time, as a patient w/o seeing a specialist, looks for some shortcut cure to fix the problem. And guess what? instead of cutting the fat they start cutting from the muscle. Worse than that the lack of follow up on improvement measures due to the daily fire fighting activities starts not going hand in hand. Most of the time the improvements are the ones fall off. That’s when employee morale, trust in management that the problems will be solved starts suffering as well. People start leaving the company and know-how disappears with people leaving as it is in people brains instead of in the DNA of the company. The daily life of employees who decides to stay on board becomes even harder and heavier. So they give up and come to work just to come to work and do the job. The value they add gets limited in time.
If this sounds similar to what you are going thru or your client has been facing a similar situation let’s discuss!