Making a Great Company a Great Business

1. Background Our client is a world leader in the Entertainment industry as the premier bulk release and distribution entity for motion picture feature, trailer and independent film studios. With a 100 year old history of bulk release of the most prominent films, our customer is a household name in movie theatres around the world. Intense cost pressures along the supply chain, coupled with changes in Technology from traditional film to digital media were causing concern about the ability to keep a competitive pace with smaller, more nimble boutique labs. With the recent acquisition of a former competitive lab, the need to define the right balance between “art” (creative film processing) and “science” (manufacturing and distribution excellence) was the primary issue. SPG’s Consulting Assignment The client asked SPG, Inc. to conduct an Operational Analysis that would address the following Objectives: Determine the effectiveness of our overall management system and core business processes Define opportunities for implementing operational and service improvements Determine the readiness of the organization to design and implement needed changes Define the Business Case to support the implementation Develop an Approach and Timeline for implementing improvements SPG’s Operational Analysis Findings Strengths not leveraged – Many issues were barriers Large financial gain potential, but dramatic change would be required to get at it The day-to-day management of the business was reactive – in terms of leadership, expectation setting, accountability, and follow-up Roles & responsibilities were not well defined – this was a very informal organization and operation Processes were inadequate which negatively impacted productivity and quality – firefighting was the norm – Processes were not consistently executed People trusted data, not other people A System For Managing the business was not in place; causing ineffective use of personnel, excessive overtime and film yield loss They repeated the same mistakes every day – were not a learning organization Lasting change could be made through the implementation of good management principles and tools which foster sustainability They lacked a single cultural identity There was a high expectation for making significant improvements in the entire operation Results and Quantitative Benefits SPG consultants partnered with client employees over a 32-week effort to complete the design and implementation. The focus was to deliver tangible benefits and the foundation for continued improvement. Accomplishments included: Enhanced operator / supervisory skills, tracking and eliminating root causes, improving lab cleanliness, raising awareness and establishing realistic goals that significantly Reduced Material Waste - which allowed for improved schedule, reduced re-runs, a more predictable process, and heightened customer satisfaction. A well-designed and implemented System for Managing that enabled: Responsive leadership and proactive planning Clear roles and responsibilities with better visibility and less confusion Better matching of resources to business requirements with more reasonable work hours Reduced cost of service with improved interfaces, faster response times and service levels agreements in place Improved Customer Service / Customer Relations A process that makes improvement a part of daily activities Sustainable results through improved Communicationwith a common language of management, heightened expectations, and a culture of performance improvement. A few Highlighted accomplishments: 18% improvement in Labor Productivity 3% improvement in process Film Yield 35% reduction in frequency of Reprints 10% increase in CCP and Developer Uptime Making a GREAT Company a GREAT Business !! Making aGreat Company a Great Business • SPG – Project Approach • SPG recommended that our client structure this initiative using a “bottoms-UP” approach to the identification and achievement of benefits. Financial targets were set a $6M in Labor Productivity, and significant film Yield. An integrated approach was developed utilizing 6 core teams over a 32 calendar week timeframe. These teams were under the governance of an Executive Steering Committee, which was responsible for guiding the process, eliminating internal barriers and constraints, reviewing recommendations, and approving major implementation decisions. • Teams focused on communications and financial / Scorecard results measurement were established • Specific Teams working focused issues such as Organization design, Maintenance, Yield Management, Customer Service, Quality, Technical Control, Initiative Integration, and the design of a non-partisan System for Managing the business enterprise. • Schrudder Performance Group, Inc. Proprietary Information - 2101