The Situation
Cost leakage was distributed across logistics motion, consumables, and conversion activities - each defensible in isolation.
Material moved more than needed and consumables were overstocked against weak reorder logic.
No single large line item looked broken, but the total recurring cost was significant.
What We Did
We treated cost as a search problem first, then focused interventions on the few drivers that moved the number.
- Analyzed spend by cost head and applied 80/20 to prioritize high-impact drivers.
- Mapped movement using spaghetti diagrams and validated reduction changes through proof-of-concept trials.
- Applied 4M analysis (Man, Machine, Method, Material) on conversion steps.
- Set consumable Min/Max/ROL levels using RRS and ABC logic.
- Ran a structured Kaizen program owned by the plant team.
The Results
Conversion cost per tonne including logistics reduced 19.5%, and consumable inventory carrying cost reduced 21%.
Combined impact delivered approximately Rs 15.24 crore annual savings, with improvement continuing after engagement close.
Strategic Takeaway
- The hardest costs to see are often the largest to recover.
- Sustained savings come when plant teams own the method, not the consultant.
Contact Gemba Concepts
Need Help Solving Similar Execution Gaps?
Connect with our consulting team to discuss your current operational challenge and the outcomes you want to achieve.
Bengaluru
Ram Leo, 59/4, Market Rd, Basavanagudi, Karnataka 560004
Ahmedabad
World Trade Tower, Near Sarkhej Sanand Cross Road, Gujarat 380051
Share This Article
Found this useful? Share it with your team and peers.
