Operational turnaround of a factory

The challenge

The client was a textile group supported by a US investment fund. They had a factory in Asia with 800 employees and 11,000m2 of production space and generated a turnover of

€17m with a negative Ebitda of €1m. The factory had been without a director for two years and had outsourced a significant part of its production to the detriment of internal capacities. The Group had tried unsuccessfully to sell the factory in its current state and wanted to make a final effort to turn around its operation and profitability before deciding whether to sell it or retain it within its industrial network, if the turnaround revealed potential. Globalise was briefed to restore Ebidta to 0, halve the number of indirect employees (from 30% to 15%) and bring outsourced volumes back in-house to restore the factory’s workload.

The solution

An initial audit conducted three weeks into the assignment revealed an insufficient structure in terms of resources and industrial processes with wide scope for improvement. A seven-month action plan was defined and immediately implemented. This included actions relating to delivery times, supplier quality, supplier management, production methods (introduction of Lean manufacturing), improvement in skills, working methods and staff motivation. The assignment was made more complicated by a powerful and demanding union.

The results

In just one month, the Globalise manager had understood the challenges, proposed an action plan and set to work. Radical transformation of the production methods in the sewing workshop rapidly generated improved productivity with a positive impact on Ebitda of €1.2m: 20% above than the initial target. This allowed the factory to be retained within the Group and to become a base for Asian operations.

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