CASE STUDY # 018
Manufacturing – Building Materials
Engagement Focus
Manufacturing accuracy, equipment calibration, financial controls, cost containment
The Challenge
The organization was facing two critical and costly failures:
- Over 90% of manufactured material orders were not meeting specification, driving excessive rework, waste, and customer risk.
- A persistent $120,000 annual financial variance was appearing across monthly and quarterly reporting, raising concerns around financial accuracy and controls.
Leadership required immediate diagnosis and stabilization across both operations and finance.
Key Findings
The assessment identified two independent but compounding execution failures:
1. Manufacturing Equipment Calibration Breakdown
- Aging cutting equipment relied on embedded algorithms that became inaccurate after the first product type was processed.
- Measurement errors compounded throughout production runs, causing widespread out-of-spec material.
2. Financial System Integrity Failure
- A defect within the accounting software caused a recurring $10,000 monthly overstatement.
- Layered formulas and linked worksheets propagated the error across financial reports, obscuring the root cause.
Corrective Actions Implemented
1. Manufacturing Process Stabilization
- Implemented an immediate operator-controlled override requiring manual verification and correction via the HMI after each cut.
- Coordinated with OEM manufacturing equipment technicians to troubleshoot and correct algorithmic behavior.
- Established a high-frequency calibration and preventative maintenance schedule of three times per week, aligned with the client’s high-volume production pace.
2. Financial Controls & System Remediation
- Immediately corrected reporting by manually adjusting the identified root cell to remove the $10,000 monthly overstatement.
- Replaced the existing accounting platform with a supported system designed to prevent similar formula propagation errors in the future.
Results
Manufacturing Performance
- Achieved and sustained 94% accuracy in manufactured orders.
- Eliminated significant remanufacturing, wasted labor, shipping costs, and production delays.
Financial Accuracy & Organizational Impact
- Monthly, quarterly, and annual financial statements were fully reconciled and balanced.
- Restored confidence in financial reporting and improved morale across the Finance and Accounting teams.
Outcome Summary
Improved organizational confidence and morale
Stabilized manufacturing accuracy
Reduced waste and rework costs
Corrected systemic financial reporting errors
Strengthened operational and financial controls
Facing production errors, waste, or unexplained financial variance?
Start with a Business Execution Assessment.