14% Cost Reduction for a Manufacturer

Margins under pressure, cost drivers unclear

A mid-sized industrial manufacturer was watching its margins erode as input prices climbed and customers pushed back on price. Leadership knew cost was the problem but not where it lived — reporting rolled everything up to the plant level, so no one could see which products, lines or shifts were actually losing money. Previous cost-cutting had been across-the-board and had quietly hurt service and quality.

Find the real cost, then fix it deliberately

We started on the shop floor, not in the boardroom. Over a few weeks we rebuilt a bottom-up cost model across three plants — down to the product-line and shift level — and mapped the true drivers of cost and waste. That gave leadership, for the first time, a clear view of where money was being lost.

From there we prioritised a short list of moves with the clearest payback: rebalancing production across lines, tightening changeover and scheduling, renegotiating a handful of key supply contracts, and retiring a small tail of unprofitable SKUs. Each was sized, owned and sequenced so the operation kept running throughout.

Roughly 14% out of unit cost, and it stuck

Within about five months the first savings were landing, and the full program took an estimated 14% out of unit cost across the three plants — while service levels held and quality metrics improved slightly. Because the cost model and the discipline behind it stayed with the client's own teams, the gains held into the following year rather than drifting back. The same model now underpins how the business prices new work.