Operations improvement for a portfoliocompany
Private equity

Lean manufacturing, sourcing excellence and sales-force improvement help struggling paper converter to boost EBITDA by 45%


Challenge

The client was a specialty paper converter for the medical, legal and financial professions. Its revenues were rapidly growing, but profits and margins were declining because of increased competition, supply chain inefficiencies, and operational problems. 

 

Furthermore, the client’s largest and most profitable business segment was rapidly eroding due to market-wide structural obsolescence of the entire industry.
 

Approach

The Arthur D. Little team approached this challenge in three stages: 

 

Transparency phase:

  • Detailed business audit of all manufacturing facilities
  • Comprehensive review of sales-force and CSR processes
  • Detailed examination of purchasing spend and practices
  • Lean manufacturing and sourcing excellence work plan

 

Blueprinting phase:

  • Performed value-stream mapping for entire product chain
  • Analyzed and benchmarked purchasing-spend profile
  • Analyzed ~3,000 customers and their future potential

 

Implementation phase:

  • Rapidly implemented lean manufacturing at the two plants, with 30% headcount and waste reduction
  • Renegotiated the contract with the largest vendor through formal RFP, resulting in $1m savings
  • Found additional multi-million-dollar profit opportunities through a world-class sales improvement program 
     

Value

Arthur D. Little’s business approach resulted in a multi-million-dollar profit improvement, boosting EBITDA by 45% in year 1. 


By scaling down selected plants, renegotiating specific vendor contracts and implementing a sales improvement program, the client gained breathing space to refocus away from shrinking markets toward growing segments.