validus management consultancy UK

Aerospace Case Study

Airline equipment manufacturer

Poor customer delivery, unknown financial position
Overdue order book eliminated and delivery lead time dramatically reduced. Project return 32:1


  • Subsidiary of a major plc, specializing in the manufacture and supply of equipment for use in most of the world's commercial airlines
  • Subsidiary employs 130 staff, (1100 in the Group)
  • Direct sales within UK, but world wide to the end user


  • Unaware of own financial position or performance
  • Poor customer performance, 3 month overdue on delivery
  • Excess stock of raw material
  • Little control over buying policy
  • 65% un-utilized capacity
  • Little knowledge of the market in terms of customers and competitors
  • No product costs or pricing policy
  • Business estimated to have a pre-tax loss of £2m on sales of £5m


  • Created separate stand alone accounting system
  • Installed independent manufacturing IT systems to allow full visibility of production processes
  • Linked manufacturing software to stand alone accounting system
  • Utilized new manufacturing IT package to identify exact un-utilized capacity, in order to eliminate overdue delivery performance
  • Balanced capacity to meet demand by the reduction in the payroll from 130 to 98
  • Reduced inventory by 50%, by the utilization of the MRP processes on the new manufacturing package and with the introduction of JIT methods
  • Conducted a full marketing study in order to fully understand major competitive forces
  • Defined clear roles and responsibilities and created budget holders with financial accountability
  • Installed full budgets, forecasting, monthly management accounts with variance analysis


  • Overdue order book eliminated and delivery lead time 3-4 weeks, has become standard
  • Working capital reduced by 50% by the reduction of inventory and prompt collection of receivables
  • Full understanding of the market place, thus allowing focus on high margin output
  • Created greater customer confidence, thus gaining access to larger orders in more cost effective batch sizes
  • A project return of 32:1 over a 2 year period