Global Industrial Products Manufacturer: Supply Chain Transformation

The company is now on track to earn $1.2 billion over 10 years, and has already secured at least one massive new deal—a solid foundation on which to build a high-performance business.

Facing a business environment with 20 percent annual revenue growth, an increased demand for products in new geographies and the emergence of new low-cost Eastern Hemisphere competitors, the company needed to increase its capacity and revise its global footprint. The company chose Accenture to help in this effort because of Accenture’s global supply chain delivery capability and deep understanding of how high-performance businesses use their supply chains to drive competitive advantage and growth.

Accenture and the company embarked on a global operations strategy development effort to improve its ability to compete in the new business environment. The initiative focused on expanding the company’s regional capacity in alignment with its growth strategy and increasing the company’s competitive advantage not only with key strategic customers, but also with traditional industry competitors.

To fulfill this strategy, Accenture worked with the company to add four green-field manufacturing centers, two engineering centers and five procurement offices, all in locations that made the most of the company’s best global growth opportunities.

Accenture also helped the company create new supplier capacities and configurations, hire new resources, develop and deliver training, execute product transitions, and start production in four key countries. To allow the company to more effectively confront the proliferation of low-cost competitors, we created distinct supply chain models for premium and commodity markets and helped the company outsource the production of low-end products.

With Accenture’s help, the company is on track to achieve up to $1.2 billion in earnings before interest and taxes over 10 years. This result includes a projected $500 million in new revenue enabled by the company’s new approach to price-sensitive and commodity products: 20 percent to 30 percent reductions in product costs and tax incentives negotiated by Accenture that cover 80 percent of the company’s new facility investments.

Because of its new strategy, the company has been able to make inroads into a critical global products market, which contributed to an additional five-year, $200-million contract in Asia. According to ongoing Accenture High Performance Business research, one of the characteristics of supply chain masters is their ability to incorporate supply chains into their business strategies.

Working with Accenture, the global industrial products company was able to create an operations strategy that effectively supports its overall business objectives, thus helping the company take major strides toward high performance.