Operational Restructure for Electronic Contract Manufacturing Turnaround
McDonald Technologies (MTI) is a high-tech electronic contract manufacturer.
No formalized go-to-market processes.
We were contracted to develop and implement a formal sales process, profile and hire qualified sales individuals, restructure independent external sales individual’s agreements, create marketing strategy, determine and assist with new service offerings.
Revenue increased from $19MM to $27MM in the first year.
MTI acquired a struggling $29MM printed circuit board (PCB) manufacturing concern. It was founder run with little management structure and no delegation of responsibilities or decisions. All incoming jobs were delayed in engineering until past the committed shipment date, including for key customers Hewlett Packard and Kodak. Pricing was done by the founder based on gut. We determined that 40% of all jobs were losing money.
We were contracted to provide a fractional operations director to manage the acquisition and formalize all processes. Our plan for the turnaround of this manufacturing concern involved several immediate actions. The founder was released from all responsibilities. Leads were established in each department. Quality procedures and systems were established throughout. The previous head of engineering was removed.
Engineering: We completely restructured and appointed a new lead manager. Personnel were profiled for skills and jobs were assigned based on their skillsets. SWOT analysis and daily team meetings were instituted.
Within three weeks, all jobs were caught up and were processing on time to manufacturing 100% complete and correct with the newly instituted quality processes.
Sales: Engineering lead, fabrication factory leads (two factories), controller, and sales provided input to restructure the pricing model based on materials, time and competitive data.
- All new jobs were priced profitably.
- We analyzed costing/pricing structure and renegotiated or eliminated $7.5 million in unprofitable ongoing work.
- We reduced overstaffed national sales department resulting in annualized savings of over $350,000 with no loss of customers.
- Eliminated ineffective independent representatives and renegotiated remaining contracts resulting in no loss of customers and $460,000 in annualized savings.
Fabrication/Manufacturing: With the improvements in engineering, we immediately made adjustments in fabrication facilities to manage increased workload. With the newly assigned lead the first thing we did was formalize the quality system and processes. We created a production operations team covering both shifts to manage the jobs through the shop.
- There were no more workflow stoppages.
- Expedite jobs were accepted, with much better margins.
- With the new team, we coordinated much needed ongoing maintenance schedules for equipment without having to shut the entire line down as equipment failed.
- All key customers were met with and informed of all changes. Ongoing updates of their jobs were also instituted.
- On-time delivery went from 0% to 92% in less than 6 weeks.
Do you need an operational overhaul? To implement quality process, costing structures and improve customer communication? To turnaround manufacturing, you might need a restructured manufacturing flow and management team. Contact us at 505.805.5002.