Office Supplies Manufacturer
Efficiency Improvement & Organizational Restructuring of Corporate Groups
Situation and Challenge
A manufacturer of office filing and furniture systems believed that their corporate overhead groups were costly and inefficient. We undertook a project to evaluate and identify process improvement and cost reduction opportunities within the finance and accounting, marketing and sales, and information technology functions.
As part of our analysis, we developed an activity-based costing model and functional view of the organization. We found a number of similar functions being performed throughout the organization, inadequate internal communications, narrow spans of control, inconsistent and loosely enforced policies and procedures, and inefficient processes.
We recommended consolidating similar functions, centralizing support activities, and expanding management’s span of control, as well as revising work flows and eliminating or revising marginally useful management reports.
We identified significant opportunities to reduce costs while increasing focus on corporate objectives and improving overall efficiency and accountability.
Our work resulted in improved product profitability and operational efficiency. Internal communication was enhanced, consistent policies and procedures were established, and the overall effectiveness of the organization was elevated. The company realized annual cost savings of $2.5 – $3.0 million (1.5% – 2.0% of revenue).