Growth and profitability to a new track

Vera Waltari

GROWTH AND PROFITABILITY TO A NEW TRACK FACILITATED BY SPRING

n today’s competitive market, operational efficiency is key when companies strive to improve their competitiveness and develop their business. Our cooperation with one of our customers in the industrial sector provides a good example of how clearly structured and targeted improvements can produce significant financial benefits.

Challenge

Our client’s growth had stagnated. The foundation was good, but the focus on growth caused an increase in the cost level, which led to a significant drop in profitability. As a result, the company fell behind its competitors. On its own, the company was unable to identify hidden problem areas or new opportunities to improve efficiency and profitability. Our mission was to help guide the company back to the path of growth and profitability by providing the right structure to their change program.

Diagnosis

The scope and complexity of the change program required a systematic approach. We thoroughly analysed their operating model and helped them create a concrete plan focusing especially on optimising the operational efficiency of production and the product portfolio. We support program management in the PMO model and organise project implementation. Our role was both strategic and very practical – we gathered insights from employees and converted these into measures that brought tangible financial benefits.

Defining the solution

Our goal was to double profitability during the program with targeted efficiency measures in four key areas – production, sales, fixed costs and raw material procurement:

In production, we improved the yield of refining processes by 6%, which increased production capacity and made operations significantly more efficient on certain production lines. Shifting the focus to ownership and optimising handling processes raised quality results and increased efficiency by 7%, while developing automation and daily routines reduced the need for shifts and strengthened a culture of continuous improvement.
During the program, sales were adapted to rapidly changing market requirements by simplifying product structures and replacing unprofitable products with more profitable ones. The focus was shifted to products with a higher margin, which were not trusted enough before conducting a separate analysis.
Cost awareness was systematically increased at all levels of the organisation and fixed costs were reduced in several different areas. We ensured that budget targets were realistically set and followed.
In the procurement of raw materials, contract management was enhanced, and processes were streamlined through active communication and automation updates. With these measures, the deliveries of materials could be better adapted to production needs and market conditions.

Results

The program made excellent progress and after 1.5 years and 132 procedures, 80% of the goal had already been realised and overall, the expected results were almost 30% better than the original goal. During the project, very significant and surprising challenges came up in sales, which weakened the overall results of the program. However, the problems were tackled systematically, and corrective measures were taken for the future.

Spring approach

Our facilitation helped our client to take over a complex and extensive change program, where sudden situation turns could also be considered. Thanks to the PMO model, we were able to gather valuable insights from within the organisation and translate them into actions that produced significant financial benefits. A structured approach and the ability to facilitate change play a crucial role when companies strive to optimise their operations and achieve tangible results in today’s competitive market.

At Spring, we are committed to helping companies utilise their full potential in a constantly changing operating environment.