Top Defense Electronics Company Transforms Business, Saves Money
Client:Defense Electronics Company
- Cut costs by improving business efficiency
- Create a new, enhanced supply chain operation in response to intense competitive pressure
- Identify and implement a business transformation project that improves processes, reduces costs and facilitates organizational change
- Organize the transformation project according to a commercially innovative incentive-based commercial model that allows vendor and client to share the rewards of bottom-line savings
- £9 million in operating income savings expected over 4 years
- Created a supply-chain organization aligned to growth ambitions
- Received a rapid return on investment
Transforming Operations in Pursuit of Global Expansion
Aerospace and defense companies are looking beyond their traditional markets as profit margins are squeezed. A leading provider of defense electronics was operating in this tough market and constantly under significant cost and revenue pressure. It needed to improve operational efficiency in order to expand successfully on a global scale.
CSC proposed an innovative, incentive-based commercial model in which both companies shared the rewards of savings that could be achieved by the project. This self-funded approach will enable a considerable return on investment for the client once the project has paid for itself.
Working Closely to Identify and Demonstrate Savings
CSC's team applied its extensive experience in the aerospace and defense sector with technology and supply chain logistics expertise. Business optimization diagnostic consulting identified where business improvements, cost savings and organizational change could be made to generate potential improvements to operating income of £9 million over 4 years.
Working closely alongside the client, CSC’s experts in SAP, data analytics, supply chain, organizational change and design demonstrated these financial benefits by analyzing data already produced by the client in innovative new ways that quantified the level of savings and demonstrated the positive operational impact they would have on the client’s operations. This included cash saved by removing process inefficiencies, for example, cash traps where money was tied up in inventory held several months in advance of actual requirements and by removing manual processes in the supply chain.
Sharing Objectives Ensures Transparency, Trust and Clarity
Having analyzed the client’s current operating model CSC then set out recommendations and a clear roadmap of actions to meet them. With full commitment at a senior Board level, work began immediately on the 18-month implementation.
This close, collaborative approach with the client ensured transparency, trust and clarity in meeting the shared objectives.
Supporting a Constantly Changing Business Environment
As part of the solution, the client was keen to design and deploy a new supply chain organization that would better support a constantly changing and highly challenging business environment.
"By introducing standard products and processes, our operations are well positioned to expand into new geographies and markets," according to the company's Supply Chain manager.
Improved operational efficiency is possible with more consistent ways of working across planning, procurement and operational functions together with new rules and responsibilities in supply chain operations.
Working collaboratively as ‘one team’ meant CSC ensured knowledge transfer to the client was straightforward and long-lasting, enabling it to continue to make future efficiency improvements.