Electronic Components Manufacturer - £11 million t/o

The client was part of a 34-factory worldwide electronics group. It had been established in the UK for seven years, and had failed to make a profit. The reporting was also inaccurate, largely due to failure to control stock. Northern Development (now One North East) was concerned that the Japanese parent would close the plant.

Collingwood was hired as interim CEO to assist the Japanese Vice-President for Europe to improve the commercial performance of the company. The main actions taken by Collingwood were as follows:

• Simplification of the stock control process so that stock recording only took place where it was physically transformed.
• Improved materials recording disciplines so that unused materials were back flushed to the previous transformation process.
• Implementation of works order control. Re-issued and additional parts were noted as highlighting weaknesses in the production process.
• Implementation of perpetual physical inventory that resulted in more accurate stock figures, fewer stock outs and with less effort.
• Implementation of Just in Time (JIT). With accurate stock figures and bills of material, we adjusted our IT system to monitor purchases on a just in time basis. We subsequently used JIT to reduce stock and highlight weaknesses.
• Production engineering was changed from being a maintenance function to being more concerned with process improvements.
• Sales order processing became more proactive in working with customers so that our production planning required fewer changes.

Within ten months, and after 72 days of Collingwood involvement:

• The client company moved into profit for the first time and stayed there.
• Reporting became precise to the extent that the flash result produced within seven days of year-end was confirmed through audit several months later.
• The value of the UK operation was also enhanced in that the client could produce feedback to corporate regarding local conditions and market issues.