This case study focuses a Stoke Consulting Consultant who undertook a substantial project to steer a loss making laundry towards profitability and operational excellence.
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Operational Turnaround at one of Australia’s Largest Industrial Laundries
Problems
The client was renowned for its high-efficiency laundry services across Australia. This case study focuses a Stoke Consulting Consultant who undertook a substantial project to steer a loss making laundry towards profitability and operational excellence.
Challenges:
- Financial Underperformance: The laundry was not profitable, necessitating urgent measures to improve the bottom line.
- Operational Inefficiencies: The laundry required restructuring across all departments to enhance efficiency.
- Safety Concerns: Maintaining the highest safety levels at the 9,000m2 facility was crucial.
- Client Expectations and Contract Management: The division faced issues with client satisfaction and loss-making contracts.
After a business assessment which included developing an exhaustive list of Potential Improvement Points (PIPs), several plans were put in place to turn the facility to profit.
Solution
Business Improvement Plan: A plan was developed to return the business to profitability, targeting a 28% year-over-year improvement in EBIT. Revenue Enhancement and Cost Reduction: A 10% increase in revenue was achieved, alongside a restructuring of the operations for cost efficiencies.Client Service Improvement: The focus was shifted to improving client expectations and service, including exiting unprofitable contracts and securing more lucrative long-term agreements. Enhanced Safety: Employee engagement and best practice safety behaviours were prioritised to increase safety standards. Maintenance Restructure: A new focus on preventative and predictive maintenance practices was introduced. Efficiency through LEAN Practices: LEAN methodologies and Six Sigma practitioners were engaged to create greater operational efficiencies. Employee Development: A clear and concise employee development plan was introduced, enhancing safety, morale, and productivity.
Outcomes
- Profitability Improvement: Achieved a remarkable 28% improvement in EBIT, translating to a $1 million increase.
- Revenue Growth: Successfully increased revenue by 10%.
- Enhanced Client Relations: Replaced loss-making contracts with profitable ones, positively impacting EBIT by $300k.
- Operational Efficiency: Significant improvements in operational efficiency through LEAN practices and better maintenance strategies.
- Improved Safety and Morale: Enhanced safety measures and employee development plans led to a safer and more productive workplace.
The transformation of the Industrial Laundry is a compelling example of effective turnaround management. Through strategic planning, operational restructuring, focus on client service, and employee engagement, the laundry not only returned to profitability, but also set a benchmark in operational efficiency and safety within the industrial laundry sector.
This case study demonstrates how targeted strategies and leadership commitment can drive significant improvements in both financial and operational performance in a challenging industrial environment.
If you recognise some of the challenges mentioned in this case study, we can certainly help define the problem clearly and isolate the activities that will improve performance, safety and profitability.
Osman Bahemia
Stoke Consulting
Osman works with businesses to develop and implement strategies for growth and effectiveness. Osman has worked in a variety of industrial sectors including aviation, mining, asset management, transport and marketing. His skills in operational effectiveness, strategy development, leadership development and change management propel significant growth and efficiency improvements in medium to large organisations.
