Finding the Path to Operational Excellence at Zeni

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- Streamlining organizational structure

With allegations that the plant manager is an authoritarian figure, it should be important that he should be trained to be more receptive and friendly towards his subordinates. This will not only ensure that there is a smooth flow of information from bottom-up but also it is a well-known fact the best ideas within an organization always come from the bottom.

- Broadening customer base and upselling

Since 80% of the revenue comes from just 4 clients, the company seems to be in a precarious position. If any of the clients decide to drop out, the company sales would take a serious hit. The current situation also dictates a stronger bargaining power with the client. Hence it is important to not only expand the current client base but also to upsell to existing customers in order to maintain a balance in its revenue stream.

- Stabilize costs through hedging and direct sourcing of raw materials

While controlling external factors such as Argentina’s economic situation maybe out of our hands, the company can always hedge its costs through advance payments to ensure a more stabilized cost structure of its natural resources. The company should also consider sourcing its raw materials directly from source instead of a third party to further stabilize its cost structure.

- Implement an Activity-Based-Costing (ABC) system to identify profit pools and cost centers instead of traditional accounting methods

ABC costing system of accounting can aid the company in identifying the processes which form the major chunk of the cost within the manufacturing process. It allocates cost as per processes and it helps in identifying the cost centers and improves profit pools.

- Boost customer satisfaction rating by overhauling support processes post purchase

Customer relations go a long way in a B2B business setting and having low customer ratings has a direct impact on the company’s cash flow. Hence the company must focus heavily on enhancing business relationship with its clients by ensuring a better after sales relationship.

- Venture into related finished products like doors, windows, etc. which would help improve profitability

There is a famous saying, ‘Do not put all your eggs in one basket’. Diversification is a key aspect in sustainability of long standing manufacturing companies. Diversifying into related products like doors and window manufacturing can help in widening the profit margin and also command extra premium on its product offerings.