Flevy Management Insights Case Study
Resilience in Fabricated Metal Product Manufacturing for Market Leadership


Fortune 500 companies typically bring on global consulting firms, like McKinsey, BCG, Bain, Deloitte, and Accenture, or boutique consulting firms specializing in MBSE to thoroughly analyze their unique business challenges and competitive situations. These firms provide strategic recommendations based on consulting frameworks, subject matter expertise, benchmark data, KPIs, best practices, and other tools developed from past client work. We followed this management consulting approach for this case study.

TLDR A mid-sized metal fabricator faced rising costs and shrinking market share due to inefficiencies and competition. They integrated Model-Based Systems Engineering, resulting in a 25% reduction in time-to-market and a 20% decrease in production costs. This highlights the value of continuous improvement and digital transformation for operational efficiency and product quality.

Reading time: 11 minutes

Consider this scenario: A mid-sized fabricated metal product manufacturer is currently facing significant strategic challenges, notably in adapting to the principles of model-based systems engineering (MBSE) to streamline its design and manufacturing processes.

The organization is experiencing a 20% increase in production costs and a 15% decline in market share due to internal inefficiencies and an inability to meet rapidly changing customer requirements. Externally, the company is grappling with fierce competition from low-cost overseas manufacturers and fluctuating raw material prices. The primary strategic objective of the organization is to achieve operational excellence and cost leadership in the fabricated metal product manufacturing sector by fully integrating MBSE methodologies.



The organization's current predicament can be traced back to its slow adoption of innovative technologies and methodologies, such as MBSE, which hampers its responsiveness to market changes and elevates production costs. Additionally, an internal culture resistant to change further exacerbates the situation, preventing the company from achieving its strategic objectives.

Industry Analysis

The fabricated metal product manufacturing industry is currently experiencing a period of intense competition and technological transformation. Companies are increasingly pressured to reduce costs, improve quality, and accelerate production times to meet evolving market demands.

Examining the competitive landscape reveals:

  • Internal Rivalry: High, due to the presence of numerous competitors both domestically and internationally, competing on price, quality, and delivery times.
  • Supplier Power: Moderate, with several suppliers for raw materials, but with price volatility affecting negotiating power.
  • Buyer Power: High, as buyers have a wide choice of manufacturers and are increasingly demanding lower prices and higher quality.
  • Threat of New Entrants: Low to moderate, given the significant capital investment and technical expertise required to enter the market.
  • Threat of Substitutes: Moderate, with advancements in alternative materials and manufacturing techniques posing potential threats.

Emergent trends include the increasing adoption of digital manufacturing technologies, the push towards sustainability, and the growing importance of supply chain resilience. These changes suggest opportunities for operational efficiency improvements, market differentiation through sustainable practices, and the need for robust supply chain strategies.

  • Increased adoption of digital technologies offers opportunities for efficiency gains but requires significant investment in new tools and training.
  • Shift towards sustainability presents an opportunity to differentiate in the market but requires reevaluation of materials and processes.
  • Need for supply chain resilience offers an opportunity to build competitive advantage but requires investment in supply chain visibility and diversification.

The STEER analysis—covering Social, Technological, Economic, Environmental, and Regulatory factors—highlights the external pressures on the industry, including increased regulatory demands for sustainability, the impact of global economic fluctuations on demand and raw material prices, and the rapid pace of technological change.

For a deeper analysis, take a look at these Industry Analysis best practices:

Porter's Five Forces (26-slide PowerPoint deck)
Strategic Analysis Model (Excel workbook)
Consolidation-Endgame Curve Framework (29-slide PowerPoint deck)
Market Entry Strategy Toolkit (109-slide PowerPoint deck)
Industry Analysis and Competitive Advantage Toolkit (99-slide PowerPoint deck)
View additional MBSE best practices

Are you familiar with Flevy? We are you shortcut to immediate value.
Flevy provides business best practices—the same as those produced by top-tier consulting firms and used by Fortune 100 companies. Our best practice business frameworks, financial models, and templates are of the same caliber as those produced by top-tier management consulting firms, like McKinsey, BCG, Bain, Deloitte, and Accenture. Most were developed by seasoned executives and consultants with 20+ years of experience.

Trusted by over 10,000+ Client Organizations
Since 2012, we have provided best practices to over 10,000 businesses and organizations of all sizes, from startups and small businesses to the Fortune 100, in over 130 countries.
AT&T GE Cisco Intel IBM Coke Dell Toyota HP Nike Samsung Microsoft Astrazeneca JP Morgan KPMG Walgreens Walmart 3M Kaiser Oracle SAP Google E&Y Volvo Bosch Merck Fedex Shell Amgen Eli Lilly Roche AIG Abbott Amazon PwC T-Mobile Broadcom Bayer Pearson Titleist ConEd Pfizer NTT Data Schwab

Internal Assessment

The organization's capabilities are currently misaligned with the demands of the market. Strengths include a well-established brand and a loyal customer base, but weaknesses in process innovation and digital transformation are significant.

Benchmarking Analysis reveals that competitors are achieving 20% lower production costs and 30% faster turnaround times by adopting advanced manufacturing technologies and lean production methods. The company's performance lags notably in areas of operational efficiency and innovation.

Organizational Structure Analysis indicates that the current hierarchical structure slows decision-making and inhibits cross-functional collaboration, critical for innovation and agile responses to market changes.

Digital Transformation Analysis highlights a critical gap in the adoption of technologies such as MBSE, IoT, and AI for predictive maintenance, which could significantly enhance operational efficiency and product quality.

Strategic Initiatives

  • Full Integration of MBSE: Implement MBSE across the product lifecycle to improve efficiency, reduce errors, and speed up product development. This initiative aims to achieve a 25% reduction in time-to-market for new products and a 20% reduction in production costs by streamlining design and manufacturing processes. Value creation comes from improved product quality and faster responsiveness to market needs. This will require investment in software tools, training, and potentially, new hires with MBSE expertise.
  • Lean Manufacturing Implementation: Adopt lean manufacturing principles to eliminate waste, improve workflow, and reduce production costs. The goal is to increase operational efficiency by 30% and reduce production costs by 25%. Value creation stems from more efficient use of resources and improved customer satisfaction through better quality and delivery times. Resources needed include training programs, lean process consultants, and internal change agents.
  • Digital Transformation for Operational Excellence: Accelerate the adoption of digital technologies, including IoT for predictive maintenance and AI for quality control, to enhance operational efficiency and product quality. This initiative aims to reduce machine downtime by 40% and improve product quality by 30%. Value is created through cost savings on maintenance and improved market competitiveness. Investments in technology infrastructure, software, and skilled personnel are required.

MBSE Implementation KPIs

KPIS are crucial throughout the implementation process. They provide quantifiable checkpoints to validate the alignment of operational activities with our strategic goals, ensuring that execution is not just activity-driven, but results-oriented. Further, these KPIs act as early indicators of progress or deviation, enabling agile decision-making and course correction if needed.


What you measure is what you get. Senior executives understand that their organization's measurement system strongly affects the behavior of managers and employees.
     – Robert S. Kaplan and David P. Norton (creators of the Balanced Scorecard)

  • Time-to-Market for New Products: Reduction in time-to-market will indicate successful MBSE integration and process optimization.
  • Production Cost Reduction: A decrease in production costs will reflect the successful implementation of lean manufacturing principles and digital transformation efforts.
  • Machine Downtime Reduction: Lower machine downtime rates will demonstrate the effectiveness of predictive maintenance technologies.

These KPIs provide insights into the effectiveness of the strategic initiatives in enhancing operational efficiency, reducing costs, and improving market responsiveness. Tracking these metrics will enable timely adjustments to the strategy implementation plan.

For more KPIs, take a look at the Flevy KPI Library, one of the most comprehensive databases of KPIs available. Having a centralized library of KPIs saves you significant time and effort in researching and developing metrics, allowing you to focus more on analysis, implementation of strategies, and other more value-added activities.

Learn more about Flevy KPI Library KPI Management Performance Management Balanced Scorecard

Stakeholder Management

Successful implementation of the strategic initiatives requires the active involvement and support of a range of stakeholders, from senior management to frontline employees, as well as technology partners and suppliers.

  • Senior Management: Provide strategic direction and allocate resources.
  • Engineering Teams: Crucial for implementing MBSE and lean manufacturing principles.
  • IT Department: Supports the digital transformation initiative by deploying new technologies.
  • Suppliers: Essential for ensuring the timely and cost-effective supply of quality materials.
  • Technology Partners: Offer necessary tools and expertise for digital transformation.
  • Employees: Frontline staff who will be directly involved in executing the new processes and technologies.
Stakeholder GroupsRACI
Senior Management
Engineering Teams
IT Department
Suppliers
Technology Partners
Employees

We've only identified the primary stakeholder groups above. There are also participants and groups involved for various activities in each of the strategic initiatives.

Learn more about Stakeholder Management Change Management Focus Interviewing Workshops Supplier Management

MBSE Best Practices

To improve the effectiveness of implementation, we can leverage best practice documents in MBSE. These resources below were developed by management consulting firms and MBSE subject matter experts.

MBSE Deliverables

These are a selection of deliverables across all the strategic initiatives.

  • MBSE Implementation Plan (PPT)
  • Lean Manufacturing Roadmap (PPT)
  • Digital Transformation Framework (PPT)
  • Operational Excellence Financial Model (Excel)

Explore more MBSE deliverables

Full Integration of MBSE

The team decided to apply the Systems Thinking approach alongside the Value Stream Mapping technique to the integration of Model-Based Systems Engineering (MBSE) across the product lifecycle. Systems Thinking, a holistic analysis framework that focuses on the way that a system's constituent parts interrelate and how systems work over time and within the context of larger systems, was instrumental in understanding the complexities of integrating MBSE. This approach was particularly useful for identifying potential bottlenecks and misalignments in current processes that could hinder the effective adoption of MBSE. The organization undertook the following steps:

  • Conducted a comprehensive review of all current product development processes to identify how information flowed between stages and where disconnects occurred.
  • Mapped out the existing system using causal loop diagrams to visualize the feedback loops and delays affecting product development timelines.
  • Identified leverage points within the system where changes could have the most significant impact on improving efficiency and reducing errors.

Value Stream Mapping was then utilized to create a detailed visualization of the flow of materials and information as a product makes its way through the value stream. This framework complemented Systems Thinking by providing a more granular view of the current state of product development processes and highlighting areas where MBSE could streamline operations. The organization proceeded to:

  • Map out the current state of the value stream for its flagship product line, noting all steps, delays, and information flows.
  • Design a future state value stream map incorporating MBSE, focusing on eliminating waste and reducing cycle times.
  • Develop an implementation plan to transition from the current to the future state, setting clear milestones and KPIs to measure progress.

The integration of MBSE, guided by Systems Thinking and Value Stream Mapping, resulted in a 25% reduction in time-to-market for new products and a 20% decrease in production costs. These frameworks helped the organization to not only visualize but also implement a more streamlined and efficient product development process, significantly enhancing operational performance.

Lean Manufacturing Implementation

For the Lean Manufacturing initiative, the organization applied the Kaizen method and the Theory of Constraints (TOC). Kaizen, which focuses on continuous, incremental improvement processes in businesses, was utilized to cultivate a culture of continuous improvement among employees. This method proved invaluable for identifying and eliminating waste in manufacturing processes. Following Kaizen principles, the organization:

  • Organized cross-functional teams to identify inefficiencies and propose small, incremental changes to improve productivity and reduce waste.
  • Held regular Kaizen events to tackle specific areas of the production process, encouraging suggestions from all levels of employees.
  • Implemented changes on a trial basis, measuring impacts on efficiency and waste reduction, and then standardizing successful practices across the organization.

The Theory of Constraints was employed to systematically improve the organization's performance by identifying and addressing the most critical bottleneck. TOC provided a structured approach to focus improvement efforts where they would yield the highest return. The organization took the following steps:

  • Identified the system's constraint that most significantly impacted production capacity and lead times.
  • Exploited the constraint by optimizing its operation, ensuring it was not the limiting factor in production.
  • Subordinated all other processes to the constraint, aligning the entire production process to support the constraint's efficiency.
  • Elevated the constraint by investing in additional resources or making changes to increase its capacity.

Implementing Kaizen and the Theory of Constraints led to a 30% increase in operational efficiency and a 25% reduction in production costs. These frameworks enabled the organization to systematically identify and eliminate waste and focus improvement efforts on the most critical areas, driving significant improvements in manufacturing efficiency and cost-effectiveness.

Digital Transformation for Operational Excellence

In pursuing Digital Transformation for Operational Excellence, the organization utilized the Capability Maturity Model Integration (CMMI) and the Digital Maturity Model (DMM). CMMI, a process level improvement training and appraisal program, was selected to assess and enhance the maturity of the organization's processes. By adopting CMMI, the organization:

  • Assessed current process maturity levels across different departments to identify areas for improvement.
  • Defined specific, measurable goals for process improvement and developed roadmaps to achieve higher levels of maturity.
  • Implemented process changes and monitored progress through regular assessments, adjusting strategies as needed to ensure continuous improvement.

The Digital Maturity Model (DMM) was then applied to evaluate the organization's digital capabilities and to guide the digital transformation strategy. DMM helped in pinpointing the areas where digital technologies could have the highest impact on operational efficiency. The organization proceeded by:

  • Conducting a comprehensive assessment of its digital capabilities across all aspects of the business.
  • Identifying gaps in digital capabilities and prioritizing investments in technologies such as IoT and AI that would drive the greatest improvements in operational efficiency.
  • Developing a digital transformation roadmap, detailing the steps necessary to achieve desired improvements in digital maturity.

The application of CMMI and DMM frameworks significantly accelerated the organization's digital transformation efforts, resulting in a 40% reduction in machine downtime and a 30% improvement in product quality. These results underscored the effectiveness of a structured approach to enhancing process maturity and digital capabilities in achieving operational excellence.

Additional Resources Relevant to MBSE

Here are additional best practices relevant to MBSE from the Flevy Marketplace.

Did you know?
The average daily rate of a McKinsey consultant is $6,625 (not including expenses). The average price of a Flevy document is $65.

Key Findings and Results

Here is a summary of the key results of this case study:

  • Reduced time-to-market for new products by 25% through the integration of Model-Based Systems Engineering (MBSE).
  • Decreased production costs by 20% by streamlining design and manufacturing processes with MBSE.
  • Achieved a 30% increase in operational efficiency by implementing Kaizen and the Theory of Constraints in manufacturing.
  • Reduced production costs by an additional 25% through lean manufacturing initiatives.
  • Reduced machine downtime by 40% and improved product quality by 30% with the adoption of digital technologies.

The strategic initiatives undertaken by the organization have yielded significant improvements in operational efficiency, cost reduction, and product quality, marking a successful shift towards operational excellence and cost leadership in the fabricated metal product manufacturing sector. The 25% reduction in time-to-market and 20% decrease in production costs directly address the strategic objective of integrating MBSE methodologies to streamline processes. Similarly, the 30% increase in operational efficiency and additional 25% reduction in production costs through lean manufacturing initiatives demonstrate the effectiveness of continuous improvement and bottleneck management strategies. The 40% reduction in machine downtime and 30% improvement in product quality highlight the impact of digital transformation on operational excellence. However, the results also suggest areas for further improvement, particularly in accelerating the adoption of digital technologies and enhancing cross-functional collaboration. The initial resistance to change within the organization's culture may have slowed the realization of the full potential of these strategic initiatives.

For next steps, it is recommended to focus on consolidating the gains achieved through the strategic initiatives by further embedding the cultural change towards continuous improvement and innovation. This could involve more targeted training programs, enhanced communication strategies to demonstrate the benefits of change, and the establishment of cross-functional teams to foster collaboration and innovation. Additionally, exploring partnerships with technology providers could accelerate the adoption of emerging digital technologies, further enhancing operational efficiency and market responsiveness. Finally, ongoing monitoring and refinement of the strategic initiatives based on real-time data and feedback will be crucial in sustaining the momentum and ensuring long-term success.

Source: Resilience in Fabricated Metal Product Manufacturing for Market Leadership, Flevy Management Insights, 2024

Flevy is the world's largest knowledge base of best practices.


Leverage the Experience of Experts.

Find documents of the same caliber as those used by top-tier consulting firms, like McKinsey, BCG, Bain, Deloitte, Accenture.

Download Immediately and Use.

Our PowerPoint presentations, Excel workbooks, and Word documents are completely customizable, including rebrandable.

Save Time, Effort, and Money.

Save yourself and your employees countless hours. Use that time to work on more value-added and fulfilling activities.




Read Customer Testimonials




Additional Flevy Management Insights

MBSE Integration for Building Materials Supplier

Scenario: The organization is a leading supplier of building materials experiencing significant delays in product development cycles due to inefficient Model-Based Systems Engineering (MBSE) processes.

Read Full Case Study

System Engineering Revamp in Life Sciences

Scenario: The organization is a biotechnology entity specializing in the development of personalized medicine.

Read Full Case Study

MBSE Deployment for a Cosmetics Brand in the Luxury Segment

Scenario: The organization is a high-end cosmetics brand that has been struggling to integrate its marketing strategies with technology advancements.

Read Full Case Study

Model-Based Systems Engineering in Power & Utilities

Scenario: The organization is a mid-sized utility company specializing in renewable energy integration, facing challenges in aligning its infrastructure and operations with Model-Based Systems Engineering practices.

Read Full Case Study

Automotive Firm's Model-Based Systems Engineering Process in Precision Agriculture

Scenario: The organization specializes in the design and manufacture of advanced sensor systems for precision agriculture vehicles.

Read Full Case Study

Automation Systems Integration for Equipment Manufacturer

Scenario: The organization in question operates within the equipment manufacturing sector, focusing on heavy machinery for the construction industry.

Read Full Case Study

Transforming Chemical Manufacturing with Model-Based Systems Engineering Strategy

Scenario: A chemical manufacturing firm implemented a Model-Based Systems Engineering strategy framework to address its operational inefficiencies.

Read Full Case Study

Transforming Leisure and Hospitality Operations: Tackling Efficiency with Model-Based Systems Engineering

Scenario: A mid-sized leisure and hospitality company implemented a Model-Based Systems Engineering strategy framework to overcome systemic inefficiencies.

Read Full Case Study

Organizational Change Initiative in Luxury Retail

Scenario: A luxury retail firm is grappling with the challenges of digital transformation and the evolving demands of a global customer base.

Read Full Case Study

Strategic PESTEL Analysis for a Maritime Shipping Company Targeting Global Expansion

Scenario: A maritime shipping company, operating primarily in the Atlantic trade lanes, faces challenges adapting to changing global trade policies, environmental regulations, and economic shifts.

Read Full Case Study

Telecom Digital Transformation for Competitive Edge in D2C Market

Scenario: The organization, a mid-sized telecom player specializing in direct-to-consumer (D2C) services, is grappling with legacy systems and siloed departments that hinder its responsiveness and agility in the rapidly evolving telecommunications market.

Read Full Case Study

Porter's 5 Forces Analysis for Education Technology Firm

Scenario: The organization is a provider of education technology solutions in North America, facing increased competition and market pressure.

Read Full Case Study

Download our FREE Strategy & Transformation Framework Templates

Download our free compilation of 50+ Strategy & Transformation slides and templates. Frameworks include McKinsey 7-S Strategy Model, Balanced Scorecard, Disruptive Innovation, BCG Experience Curve, and many more.