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Plant Turnaround: How to Address Underperforming Manufacturing Issues

February 14, 2024

 by David Collins III

Workers inspecting at industrial site

In the dynamic world of manufacturing, facing periods of underperformance is not uncommon. Yet the journey from recognizing issues to implementing a successful plant turnaround can be challenging but rewarding. Underperformance in a factory arises from several sources: changing external market conditions, supply chain disruptions, personnel changes, and technological shifts. With the latest manufacturing trends pointing to volatility and uncertainty, manufacturers must find ways to adapt to these market changes and ensure that their performance is proper where needed.  

 

What is a Plant Turnaround?

Plant turnaround, also called operational turnaround or factory turnaround, refers to the comprehensive process of diagnosing, planning, and implementing changes within underperforming manufacturing operations to improve productivity, efficiency, and profitability significantly. An analogy to plant turnaround is navigating a ship through stormy seas to reach calmer waters through decisive action and strategic planning. 

 

The 4 Key Phases of a Successful Plant Turnaround 

A plant turnaround involves a structured approach to revitalizing manufacturing operations, typically encompassing several key phases: 

1. Diagnostic Phase

Like a seasoned auto mechanic peering under the hood, this phase involves a thorough analysis of the manufacturing unit to identify inefficiencies, bottlenecks, and areas of waste. At MTG, we call this an initial assessment. This phase lays the foundation for a successful factory turnaround by pinpointing the specific challenges and opportunities within the manufacturing process. Understanding these areas allows for developing targeted strategies to improve efficiency, reduce costs, and enhance overall production performance, which drives the factory's revitalization.

2. Strategic Planning

Drawing from our repository of experiences, including those of our clients, we craft a tailored plan that addresses identified issues, setting clear objectives and measurable goals. The client’s management typically approves these plans based on their budgetary processes, capital budget, and organizational priorities. This phase is crucial for aligning the turnaround efforts with the company’s strategic vision and resources. By setting a clear roadmap with specific milestones, we ensure that the turnaround efforts are effective and sustainable, leading to long-term operational efficiency and profitability improvements.

3. Implementation

This phase is where the rubber meets the road. Initiatives may range from process and factory layout optimization to technological upgrades to enhance operational efficiency. The solution must solve the factory’s challenges, not force the wrong solution at the wrong location. Successful implementation is crucial in translating the identified solutions into tangible results. By meticulously executing the planned initiatives, we can directly address the root causes of inefficiencies, leading to substantial improvements in productivity, quality, and, ultimately, the factory's competitiveness in the market.

4. Monitoring and Adjustment

A vital step often underscored by our encounters in the field, where continuous evaluation helps fine-tune strategies, ensuring the turnaround plan remains on course towards its objectives. This phase involves regularly assessing the progress against the set goals and making necessary adjustments to the plan based on real-time feedback and changing circumstances. It is crucial for maintaining the momentum of the turnaround efforts and ensuring their relevance and effectiveness. By actively monitoring and adapting strategies, we can address unforeseen challenges promptly, keeping the factory's improvement trajectory aligned with its ultimate goals of increased efficiency and enhanced profitability.

 

MTG’s Experience with Plant Turnaround 

Reflecting on our journey, an example that comes to mind was when our client Fontaine Trailers' production line was significantly underperforming due to outdated processes and a disengaged workforce. Through a meticulous operational assessment, we identified critical areas for improvement, which led to the integration of lean manufacturing principles and a comprehensive employee training program.

What this looks like in practice was an over 100% increase in output and an increased sales volume of $10M for Fontaine Trailers. The employees and products were good, yet the processes prevented them from reaching their full potential. There was no need to change technology or personnel, just the underlying process and organization.  

 

Plant Turnaround: The Start of Something New for Your Factory

Addressing underperforming manufacturing issues through a plant turnaround is not about applying a set of formulaic steps; it's about diagnosing with precision, planning with insight, executing with determination, and adjusting with agility. The turnaround journey is a testament to a manufacturer’s resilience and adaptability, showcasing how strategic interventions can breathe new life into operations, propelling them towards sustainable growth and success. 

In every anecdote shared and every strategy implemented, the underlying message is clear: underperforming manufacturing units can be transformed into beacons of efficiency and productivity with the right approach. The path to operational excellence is within reach, navigated through the lens of experience and guided by a commitment to improvement.  


Have you ever turned around your plant before? How did it go? Let us know in the comments below.

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Topics: Manufacturing Consulting, PE Manufacturing

David Collins III

David Collins III

David was a Senior Strategy Consultant for Deloitte, served in Iraq as a Special Operations Civil Affairs soldier, and as a Governance Advisor to the Afghan Government with the Department of State. At CMC, David advises clients on strategy and investments.

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