A company with a central kitchen had a turn over above $4M but needed to reinvest in a new purpose-built facility.
The challenge was to find a way to fund the fit out costs of the new facility. My first thoughts were to calculate the increase in sales needed to neutralise this cost. After looking at all the figures and carefully observing the operation, it became obvious there were significant inefficiencies caused by the existing not-for-purpose construction.
Plans for the new facility were increased to allow for better flows, two new pieces of equipment were purchased to allow for whole batch cooking and wheels were fitted to everything to improve flexibility for variable configurations.
The move cost approximately $400,000 but through improved design, labour was reduced from 28 % to 23%. This productivity improvement alone resulted in the move being paid for within 8 years not including the growth opportunities that the new facility generated.