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Case Study

Carmaker shifts its production model

The client's supply-push production model meant that vehicles were selling at a discount relative to competitors who used demand-pull models. But because this approach was integrated into every aspect of the business, the client needed to transform operations. Bain helped develop and implement production solutions that crossed functional and value chain borders. As a result, the company's performance improved substantially.

  • min read

At a Glance

  • $1.1B total operational benefit

The Full Story

The Situation

To manage costs and deliver quality, CarCo* needed to fundamentally rethink its operations model.

While conducting a major strategy review for CarCo, a large automobile manufacturer, Bain uncovered a major operational issue: the company needed to fundamentally change its production model.

  • CarCo's costly supply-push production model caused the company to sell vehicles at a discount relative to those competitors who used demand-pull production.
  • The company wanted to reduce complexity and improve its manufacturing and purchasing. Because the supply-push approach was completely integrated into every aspect of the business, however, major transformations of processes and associated operations improvements were needed at every step of the value chain.

A tactical approach to operations improvement could have delivered short-term benefits. Instead, Bain supported the client in developing and implementing a completely new operations strategy. To optimize its business, CarCo needed long-term, integrated solutions that crossed functional and value chain borders.

Our Approach

After quantifying the many benefits of a true demand-pull system, Bain created a new value chain to focus multiple pieces of work into an overall corporate strategy.

Our Recommendations

By working at multiple CarCo locations in Europe and North America, Bain was able to develop a new operations strategy and implementation plan.

The Results

As a result of Bain's work to transform the company's operations, CarCo was able to improve its performance substantially.

 

* We take our clients' confidentiality seriously. While we've changed their names, the results are real. 

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