Turning Losses into Stability

Description
An Eastern European injection molding and assembly organization was grappling with annual losses surpassing €1 million, driven by inefficiencies, poor quality, and outdated pricing. Molding Academy stepped in with a proven onsite consultancy approach, kicking off with a 4-week analysis of their operational workflows and profit-and-loss (P&L) statements. Engaging closely with the onsite team, we uncovered critical pain points and built a tailored turnaround plan, executed with Agile tools like Sprint Planning.

Our strategy tackled multiple fronts:

• Immediate Wins: We eliminated low-value expenditures, such as overpaid, unsupervised contractors and a rented warehouse full of obsolete inventory, delivering quick cost savings.
• Quality Overhaul: Facing customer complaints and potential defections, we introduced temporary checkpoints to halt defective goods, then used Lean tools—Pareto charts, fishbone diagrams, and 5-Whys root cause analysis—to eliminate issues systematically. This slashed overtime by reducing returns and rework.
• Profitability Reset: P&L analysis revealed numerous negative-margin products. We recalculated the true Cost of Goods Sold (COGS) across the portfolio, identifying inefficiencies like long cycle times, blocked cavities, and poor planning.
• Process Innovation: We implemented SMED (Single-Minute Exchange of Die), cutting changeover times from 8 hours to 30 minutes, boosting capacity. Targeted improvements addressed equipment issues and optimized production workflows.
• Pricing Realignment: For unprofitable legacy items, we presented clients with transparent options: accept price increases or relocate production. Remarkably, 80% agreed to the adjustments, preserving relationships while restoring margins.

The Impact: In just 7 months, the firm achieved breakeven, a stark contrast to its prior €1M+ losses. Capacity surged 30%, eliminating weekend overtime, while resource needs dropped 25%—some through natural attrition, others through strategic cuts. Customer relationships strengthened, built on trust and results. This turnaround showcases Molding Academy’s integrity-driven, innovative approach to delivering measurable success. Ready to transform your operations? Request a consultation today.