CASE STUDY - CONTRACT MANUFACTURING STRATEGIES

The Challenge:

Team WBC undertook the transformation of contract manufacturing operations for a North American company, facing a multitude of complexities. The existing contract manufacturing setup resembled a mysterious black box with 26 sites, lacking key performance indicators (KPIs), controls over costs, losses, or variances, and plagued by inconsistent contract terms and quality standards.

Our Strategic Approach:

To bring clarity and efficiency to this intricate web, our team embarked on a mission to enhance transparency within the business. A comprehensive database of current co-manufacturing capabilities was established, enabling a meticulous evaluation of each site. This process allowed Team WBC to discern between useful and obsolete redundancies within the extensive co-manufacturing network.

The Tailored Solution:

The co-manufacturing sites underwent a thorough evaluation, benchmarked against internal factories. Remarkably, in several instances, these external sites not only met but exceeded the levels of performance set by internal operations. Simultaneously, a database of external co-manufacturers was curated, and a streamlined innovation process was implemented.

In a strategic move, we consolidated the number of co-manufacturing sites from 26 to 10, introducing KPIs with regular reporting and developing a variance analysis. The team retained useful redundancies for specific co-packing operations and key sites. All sites were brought under a continuous improvement protocol, resulting in an impressive 2-4% annual cost reduction and substantial savings of $1-2 million.

The Transformation:

The results spoke volumes about the effectiveness of our strategic interventions. Beyond the consolidation of co-manufacturing sites, the establishment of KPIs, and the introduction of variance analysis, the continuous improvement protocol became a catalyst for ongoing success. The North American company not only experienced enhanced operational efficiency but also realized significant annual cost savings, underscoring the triumph of a tailored and strategic approach by Team WBC.