Printing and Services Company, USA-Based
CHALLENGE
Remove substantial cost from the North American manufacturing and distribution network, consisting of 19 conventional manufacturing plants, 3 digital technology plants, and 40 distribution centers. Network had substantial capacity under-utilization and the market needs were shifting from conventional to digital.
19 distribution facilities closed or consolidated in 2 years with no customer interruptions or service degradation.
SOLUTION
Analyze the North American network of manufacturing plants and distribution centers and develop a new optimized plan capable better serving customers while reducing fixed and operating costs. Also, apply Lean manufacturing concepts to drive waste out of the operations and streamline order processing.
We closed 10 conventional plants, transferring their work to the remaining facilities.
Built new digital facilities in:
- Cranbury, NJ (replacing Baltimore)
- Ontario, CA (repurposing a closed conventional plant)
- Elgin, IL
Expanded digital capabilities in:
- Columbus, OH
- Charlotte, NC
- Brennan, TX
- Atlanta, GA
- Livermore CA
Closed 19 distribution centers and built 2 new modern distribution facilities in:
- Cranbury, NJ
- Columbus, OH
The optimiized manufacturing network had enhanced digital and color capability coast-to-coast while reducing fixed costs dramatically.
IMPLEMENTATION
Planning and executing the North American network changes was completed on-time and on-budget over a 2 year period with minimal customer disruption. Result was a lower fixed cost and operating cost network with expanded capabilities in the growing technologies:
Network realignment planned, approved by board and successfully executed in 3 years
EBITDA improved from 5% on sales to 10%
Press utilization targets achieved
Manufacturing and distribution headcount reduced
Manufacturing and distribution productivity metrics improved
Dramatic improvement in digital technology capability:
Color processing across North America
East coast digital production for letter shop expanded
West coast high speed color processing added
Operating cost reduced by over $50 million
The network optimization and other operations improvements improved EDITDA margin to highest level in 5 years while enhancing capability to serve customers.
