Lean Diagnostic Study for Profitability
A diagnostic study was taken at the largest steel producing company in Oman, aiming to seal the profit leakages that the company suffered with
Capacity, manpower allocation, raw material prices and the process failures were looked into to bring forth the key area of failure for the company
Numerous potential outcomes had surfaced that promised results if treated in the structured approach that Lean dictates
Situation – deep dive
Among the largest companies in Oman, MNO Steel manufacturers processed raw steel they procured from GCC as well as from Asia.
Their biggest quandary was the decision of buying the raw steel. Local supplies & abroad supplies had their pros and cons which resulted either in major losses or meagre profits.
In an attempt to turn the company’s profitability over, they hired SSA to implement a series of tests to diagnose the root cause for the problems that arose in the company.
With a scientific mindset, SSA deployed Lean tools to gauge the health of the capacity assessment, RM procurement and a handful of other vital areas that could have led to profit leakages.
Actions Taken – deep dive
Throughout the diagnostic, we tested several areas of their activities to draw out the culprit of the major losses that the company dealt with. Some of them are:
- Timeliness of order processing & delivering
- Analysis of products demanded
- Predictability of demand based on historical data
- Customer returns analysis
- Inventory analysis
- Analysis of rated vs actual capacity
- Identification of the most lucrative product mix
- Breakdowns & Idle times
- Customer Voice
The above data points threw light on the primary pain areas that MNO suffered from.
Results – deep dive
- SSA garnered eulogies from the client on the outcome of the detailed diagnostic study
- The lucidity of the report and the crystal-clear action points slated to arrest the profit leaks were appraised
- Client expressed satisfaction on the list of action points, which enabled them to go on with an improving stride of excellence