Situation / Scenario –
A traditionally inferior product with a jaded reputation in the marketplace posed critical risks to the sustainability and viability of the organization during down markets.
Opportunities / Problems Identified –
The facility had historically not invested in processes and equipment to improve the overall quality of the product offered in the marketplace. Hence, during times of oversupply, the product was not readily salable or was deeply discounted. The company was slowly losing even the most faithful customers due to performance and reputation issues.
Action Development –
A comprehensive benchmarking study was undertaken to determine performance gaps and the specific shortcomings of the current product being produced. Once completed, the analysis pointed to several attributes and performance characteristics that lagged behind the other products available in the market; placing it in the last quartile for industry averages. The team specifically focused on those areas that were causing “pain points” for the customer. Potential plans were brainstormed and generated that would likely move the product up at least a quartile in terms of market acceptance. Projects were scoped out and priced. Within a couple of weeks, a clear winner emerged from the choices that would deliver the quality improvement necessary while keeping the CAPEX spend within current cash flow constraints.
Results Generated –
Overall product quality, as represented by industry standard test methodologies, improved by 27% upon project completion. More importantly, the consistency of the product improved by over 100% as a result of the quality control system that was engineered and installed. The overall uniformity of the product eliminated the majority of downtime at customers’ facilities and provided more predictable results for the finished product that was expected by the end customers and users.
Bottom Line –
In a severely down market, sales grew 55% within 6 months of completing the installation of the quality control system in the plant. Sales are expected to double from the original baseline within another 6 months. The product regained the loyalty of existing customers, while re-establishing relationships with customers that were previously lost due to inferior product quality.