Case studies
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Strategic analysis and redeployment of manufacturing activities
Industry : Medical
Category : Manufacturing & Distribution
Location : Quebec Province
Problem
The customer had been operating a medical device manufacturing plant in Quebec for over 20 years, employing 17 people. This plant, subject to strict standards (Health Canada and FDA), was generating high fixed costs related to cleanroom operation and regulatory compliance. In 2018, the owner of the premises announced the end of the lease within 9 months. The company had to decide quickly on the fate of the plant, with no clear visibility on its profitability, as it was financially integrated with the head office and had no autonomous P&L.
Approach
Solution
Phase 1: Analysis confirmed the plant’s unprofitability and led to a rationalization of 60% of the product portfolio, while retaining high value-added ranges.
Phase 2: The majority of the remaining products were outsourced to external suppliers, guaranteeing greater profitability. Only those products that did not require a cleanroom were retained in internal production.
Phase 3: An expanded operational team was set up to execute the plan. The plant was closed. The majority of employees were relocated or assisted in their transition with offers of financial and professional support. An internal production unit was set up, with quality compliance, integrated procedures and staff training.
Results
- 80% of initial sales maintained.
- Rationalization of 60% of product portfolio.
- Generated CAD 500,000 in additional annual net profits.
- Successful redeployment of the majority of employees.
- No impact on customers.
- Exemplary implementation of a multi-disciplinary approach (HR, Operations, Finance, Sales, Sourcing, Quality).
80% of initial sales maintained.
Rationalization of 60% of the product portfolio.
Generation of 500,000 CAD
in additional annual net profits.
Successful redeployment of the majority of employees.
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AVEL Consulting carried out the project in three structured stages:
Profitability and product portfolio analysis: setting up a multidisciplinary team (sourcing, marketing, sales, finance, operations) to reconstitute a P&L dedicated to the plant, analyze its actual profitability and assess the relevance of the product portfolio.
Evaluation of manufacturing scenarios: operational analysis of alternatives – insourcing, outsourcing, relocation – based on the products retained.
Execution of the transformation plan: tactical support for the closure, reassignment of personnel, and implementation of a new production cell adapted to post-closure constraints.