Potent Competitive Advantage, More Responsive, Higher New Product Success Rates
Hubbell, an organization built by acquisition (37 acquisitions in 16 years), was characterized by multiple cultures and diverse practices and was historically managed as a collection of businesses. After years of successful growth, sales and profitability at this $2+ billion global maker of electricity transmission products had flattened. In order to fund their stated growth goal, Hubbell needed to integrate their many business processes, reduce working capital, and cut operating costs across more than 30 worldwide locations.Challenge: Hubbell needed to integrate their many business processes, reduce working capital, and cut operating costs across more than 30 worldwide locations.
In early 2002, Hubbell had too much working capital and they were unable to adapt to rapidly changing marketing conditions. Former CEO Tim Powers wanted the company to undergo dramatic change and issued an aggressive challenge to the organization just one year into its lean transformation.
The Challenge
"2X4" Strategy Objectives | Operating Income | Cash Flow |
| 2x inventory turns by per year | - | $150M |
| 2% margin improvement per year | $50M | |
| 2% market share improvement | $25M | |
| Total Improvements | $75M | $150M |
Solution: Implement a Lean Management System to align strategies and KPIs, and implement a Design for LeanSigma (DLS) Process.
In conjunction with the Hubbell leadership team, TBM developed a comprehensive go-forward plan for all the major operating divisions and began directly implementing the LeanSigma transformation. In support of this transformation plan, we also began selectively training key continuous improvement professionals and began training the first-line leadership teams on how to independently drive and sustain change in their organization.
“I’ve found TBM to be truer to Toyota Production System principals and the core of process improvement than any other consulting firm – but their expertise extends well beyond process improvement. They’re not only solving problems, they’re changing us. TBM is truly our partner.”
Results: Increased operating profit margins to 15% from 4% and increased net income from $48MM to $268MM
- Increased operating profit margins to 15% from 4%
- Increased net income from $48MM to $268MM
- Recovered from recession faster and increased revenue to nearly $5B today
- Reduced inventory from 93 days to 49 days and generated $240MM in cash in five years
- Increased EPS by 338% from $0.82 to $4.42
- Improved new product development process, speed to market, innovation effectiveness