Manufacturing and Office Site Closure

Problem

The site, established in 1961, was a high-profile industrial operation with significant labor relations challenges, high cash flow, and a high-demand product. The site generated revenues of $300 million and employed 220 people from diverse cultural backgrounds, including 17 home language groups across 27 nationalities.

There was a strong rationale for consolidation into a larger facility 100km away.

The decision to close the site required careful management of customer service, industrial relations (IR), employee transitions, environmental concerns, and asset disposal. Prior to the closure announcement, the site had an average of one lost-time injury (LTI) per month, making safety a major concern.

Scope and Deliverables

Stoke was responsible for leading the closure process while maintaining business continuity. The key deliverables included:

Negotiation and Announcement: Completed closure package negotiations over 3 months and arranged the announcement.
Operational Management: Ensured continued site operations and phased cessation of production without business disruption.
Employee Transition: Managed redeployment and redundancy, with a target of reassigning at least 10% of employees.
Safety and Compliance: Maintained safety and quality certifications while preventing industrial action or further LTIs.
Environmental and Asset Strategy: Addressed owned property concerns, including environmental issues.
Project Governance: Implemented a structured PMO governance framework with aligned and consistent communication.

Outcomes

Financial Performance: Achieved the highest EBIT in four years in the final quarter of operation.
Safety and Compliance: No LTIs post-announcement; National Safety Council accreditation and quality system re-certification maintained.
Operational Excellence: No industrial action or lost time due to IR issues.
Employee Management: Only 2% of employees departed earlier than planned.

ROI Assessment

Against program and project consultancy and management costs, the average ROI is estimated at 700% with the savings below identified:

ROI Area	Metric	Estimated Value
Increased EBIT	Additional earnings due to structured closure	$8M+ in last quarter
Avoided Legal Costs	No industrial disputes, reducing legal expenses	~$1M saved
Safety Performance	Reduction in LTIs (12 incidents avoided)	$2.4M (based on avg. LTI cost of $200K per case)
Asset Management	Optimised disposal of assets & environmental compliance	Estimated $5M in cost savings
Employee Retention	Keeping key staff for smooth transition	Intangible but critical

Ken Davis

Stoke Consulting

Ken’s senior line and consulting exposure has spanned many decades in metals and automotive manufacturing and distribution, oil & gas and IT services in national and international roles. Ken has delivered direct accountability for effective change strategies, program execution and continuous improvement and innovation in Australia and internationally.