An Oregon-based manufacturing company was struggling with a number of issues. Competitive pressures from overseas forced the company to seek a change in strategy. The bankers were getting impatient and losing confidence in the venture. Management realized that they must take action and pursue a high-end value-added product mix.
This move precipitated a change in procurement and manufacturing practices. Although management felt that they knew the general trend to follow, they also knew that the “devil is in the details”. The all-important question that they desired to answer was: “What is the most profitable product mix?” It was clear to the group that they needed more than a spreadsheet.
The management team turned to Optware Solutions for assistance. Optware has many years of modeling experience in manufacturing environments. The Optware team quickly determined what data was needed to populate the Optware System which is driven by linear programming technology (LP). Within a matter of weeks the system was giving valuable direction as to what mix of components should be purchased and which products are most profitable to manufacture. The sales team made a determined effort to seek buyers for the new products. Initial results showed a dramatic financial improvement. Red ink turned to black as the LP model acted like a compass pinpointing out hidden profits. Cost savings were dramatic, exceeding three hundred thousand dollars per month.
Steve Killgore, President, McKenzie Forest Products
“We picked up well over 35% savings in our manufacturing costs in a one year period”
Michael McCollum, President Procurement, Georgia-Pacific Corporation
“We saved 1.5-2% of total fiber costs in transportation savings alone using Optware”
Mark Shuholm, Manager, Containerboard Division, Willamette Industries
“Optimization allowed us to substantially improve our paper machine utilization across the Division”
Richard Dutchak, Engineering Manager, Loewen
“We documented wood cost savings of just under $1,000,000 in the first year of using the software”