Savings strategically reinvested...
Located in Eastern France, the client company manufactures electrical and electromagnetic access locking products. Founded in 2001, the 40-strong company will achieve sales of €10 million in 2019.
Its development is based on product innovation and a strong export dynamic, with two main flows: maritime between Malaysia and its production/storage site in eastern France, and land-rail across Europe.
Problems encountered
The company’s problem can be broken down into 3 areas:
- Transport and logistics flows lack efficiency and effectiveness. According to its CEO, logistics account for over 8% of total sales.
- Packaging suffers from an atomization of the number of packaging references allowed. This multiplicity of possible package formats results in poor optimization of container space: 50% of available volume is not used.
- Energy, gas and electricity contracts are not optimized.
Analysis & diagnosis
There is considerable potential for cost reduction in all three categories.
- 50% reduction in energy consumption costs.
- Transport and logistics costs can be reduced from 8% of sales to 6.5%, then 4.5%.
- Packaging logistics costs can be reduced by 30%.
In line with the company’s strategy based on strong growth and the prospect of a sharp increase in flows between Malaysia and Europe, the CEO can reinvest the cash flow in co-development, particularly in R&D, via local and international partnerships.
Challenges, issues & objectives
- Packaging: packaging is defined by customers. Packaging standardization made possible, while increasing customer satisfaction.
- Transport and logistics: Optimize container space and halve the number of containers.
- Energy: lower energy consumption costs and launch of the energy optimization process.
In the very short term, the challenge is to reinject the cash generated into the company’s strategic priorities and finance its growth. The aim is to sustain these cost reductions over the long term.
Solutions provided
- Reduce costs in line with corporate strategy.
- Increase service quality.
- Revision and simplification of processes (automation of package identification).
- Free up time by transferring internal operations to the supplier.
- Reduction in the number of product references.
Results
The customer company is stronger and more valuable. The cash flow freed up by cost management enables the company to finance its own growth, co-development partnerships and acquisitions. Flows are more transparent for staff, and they have better visibility of processes, which has a positive impact on company dynamics.
Key success factors
- Total commitment from the management committee and CEO.
- Constant, responsive sharing of quality information with ERA stakeholders.
- Transparency on actions taken.
- Total trust between Frédéric Midy and the CEO.
- Responsive exchanges.
- Clear identification of the company's strengths and weaknesses.
Conclusion
We work for success: no remuneration is received until there are savings. We generate value for the company. Our intervention is “resource free”, consuming little of the management committee’s time. The transformations and solutions we deliver are the result of total trust between the CEO and Frédéric Midy.