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Aerospace & Advanced Manufacturing

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MERU CASE STUDY

Identified 10% gross margin improvement for an industrial manufacturer

COMPANY OVERVIEW

  • $220M industrial manufacturer producing complex engineered solutions for the aviation and automotive markets in North America and Europe
  • The company lost a primary customer as lead times exceeded service levels by 3 months and quality issues increased by 40%
  • The sales team had implemented a new incentive program, however, overall profitability had declined
  • The company needed to undertake a holistic review of the Sales & Operations Planning function

OUR APPROACH

  • Assessed customer segmentation model and strategy performance
  • Assessed last 3 years sales data to ascertain SKU profitability and lead times
  • Conducted an operational assessment within marketing, sales, engineering, procurement and manufacturing to identify opportunities
  • Facilitated workshops with business unit leads and management to agree upon the sales strategy and service levels from each business unit
  • Established a centralized operational center with operational metrics

OUR IMPACT

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10% gross margin improvement identified by eliminating low-value orders.

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15% reduction in lead times for key customers identified without spending capital.

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Suspended use of S&OP software and implemented simple sales forecasting tool and review meetings to focus business units on key customers (who represent 70% of gross margin per annum).