CNC machining company
Series production of turned and milled metal components
How to increase profitability at the same production capacity
Series production of turned and milled metal components
How to increase profitability at the same production capacity
Marketing strategy, demand analysis and definition of the priority order profile
Anonymised project. Information published with the company’s consent
+7%
Profit increase with the same production capacity
24% → 37%
Share of incoming enquiries matching the priority order profile
0
New machinery or additional production staff
+7%
Profit increase with the same production capacity
Share of incoming enquiries matching the priority order profile
24% → 37%
New machinery or additional production staff
0
WHERE TO FIND GROWTH WHEN PRODUCTION CAPACITY IS ALMOST FULLY USED?
COMPANY PROFILE
A CNC machining company based in Lombardy has been producing turned and milled metal components in series for around 20 years.
The company has 16 employees, including 9 in production, and operates 10 CNC machines, including lathes with automatic bar feeders and multi-axis machining centres.
The company has 16 employees, including 9 in production, and operates 10 CNC machines, including lathes with automatic bar feeders and multi-axis machining centres.
STARTING POINT
Production was operating close to full capacity. Current orders provided stable profitability, while further growth was limited by available production capacity. Expanding it would require new machinery, additional staff and long ramp-up times.
The company wanted to understand whether further growth was possible with its existing production resources.
The company wanted to understand whether further growth was possible with its existing production resources.
GROWTH POTENTIAL
Incoming enquiries, quotes issued and completed orders were analysed. Commercial data was compared with machine utilisation, setup costs and repeat-order frequency.
PROFITABLE ORDERS PRODUCED DIFFERENT RESULTS RELATIVE TO THE RESOURCES USED
The differences were particularly visible in the machines and operations that represented the main production constraints.
THE LARGEST ORDERS WERE NOT ALWAYS THE MOST VALUABLE
Large production runs generated stable revenue but tied up limited production resources for long periods and required substantial setup. Some smaller runs were a better fit for the production system and generated better results relative to the resources used.
Some orders remained profitable on their own but reduced overall portfolio performance because they used capacity that could have been allocated to higher-value work.
SALES PRIORITIES DID NOT REFLECT THESE DIFFERENCES
New enquiries were assessed mainly on technical feasibility, volume and lead time. Their potential contribution to overall production performance was not systematically considered when setting marketing priorities or deciding what demand to attract.
The differences were particularly visible in the machines and operations that represented the main production constraints.
THE LARGEST ORDERS WERE NOT ALWAYS THE MOST VALUABLE
Large production runs generated stable revenue but tied up limited production resources for long periods and required substantial setup. Some smaller runs were a better fit for the production system and generated better results relative to the resources used.
Some orders remained profitable on their own but reduced overall portfolio performance because they used capacity that could have been allocated to higher-value work.
SALES PRIORITIES DID NOT REFLECT THESE DIFFERENCES
New enquiries were assessed mainly on technical feasibility, volume and lead time. Their potential contribution to overall production performance was not systematically considered when setting marketing priorities or deciding what demand to attract.
FROM INDIVIDUAL ORDERS TO OVERALL PERFORMANCE
Based on the analysis, the types of demand to prioritise were identified.
The assessment considered the financial result per machine hour, setup costs, the likelihood of repeat orders and other indicators.
The assessment considered the financial result per machine hour, setup costs, the likelihood of repeat orders and other indicators.
A. PRIORITY ORDERS
At the current production load, these orders delivered strong results relative to the resources required and their impact on other work.
B. ORDERS TO ASSESS BASED ON PRODUCTION LOAD
These orders remained profitable, but their value varied depending on the production sequence and machine availability.
C. LOW-PRIORITY ORDERS
These orders remained profitable on their own but reduced the overall result by taking the place of more profitable work.
At the current production load, these orders delivered strong results relative to the resources required and their impact on other work.
B. ORDERS TO ASSESS BASED ON PRODUCTION LOAD
These orders remained profitable, but their value varied depending on the production sequence and machine availability.
C. LOW-PRIORITY ORDERS
These orders remained profitable on their own but reduced the overall result by taking the place of more profitable work.
Based on these findings, we built a Target Account List of companies most likely to generate this type of demand.
IMPLEMENTATION
WEEKS 1-2
Defining criteria for priority demand and how to use the Target Account List.
WEEKS 3-4
Developing recommendations for marketing focus, messaging and sales materials.
WEEKS 5-6
Providing recommendations, materials and implementation guidance to the internal team.
Defining criteria for priority demand and how to use the Target Account List.
WEEKS 3-4
Developing recommendations for marketing focus, messaging and sales materials.
WEEKS 5-6
Providing recommendations, materials and implementation guidance to the internal team.
SALES PRIORITIES
The Target Account List became the basis for focusing activity on companies and demand scenarios most likely to generate priority orders. Resources for acquiring and developing new clients were redirected towards these areas.
EVALUATING NEW ENQUIRIES
Criteria were defined to help the team assess new enquiries against the priority order profile from the first stages and consider their value when deciding where to allocate resources for follow-up.
SALES MATERIALS AND MESSAGING
Recommendations were developed for presentations, trade show materials, sales proposals and other customer touchpoints so that communication better reflected the production scenarios the company wanted to attract.
The recommendations were then passed to the internal team and external suppliers for implementation.
The Target Account List became the basis for focusing activity on companies and demand scenarios most likely to generate priority orders. Resources for acquiring and developing new clients were redirected towards these areas.
EVALUATING NEW ENQUIRIES
Criteria were defined to help the team assess new enquiries against the priority order profile from the first stages and consider their value when deciding where to allocate resources for follow-up.
SALES MATERIALS AND MESSAGING
Recommendations were developed for presentations, trade show materials, sales proposals and other customer touchpoints so that communication better reflected the production scenarios the company wanted to attract.
The recommendations were then passed to the internal team and external suppliers for implementation.
STRATEGIC IMPACT
STRATEGIC IMPACT
MARKETING STARTED TO FOCUS ON DEMAND QUALITY
The company’s orders were profitable individually, but different mixes of orders produced different overall results with the same production capacity.
The marketing objective shifted towards changing the mix of enquiries and increasing the share of demand made up of orders that, together, produced better results with the existing capacity.
The company’s orders were profitable individually, but different mixes of orders produced different overall results with the same production capacity.
The marketing objective shifted towards changing the mix of enquiries and increasing the share of demand made up of orders that, together, produced better results with the existing capacity.
THE APPROACH TO FUTURE GROWTH CHANGED
New machinery increases production capacity while preserving the existing order mix. Expansion becomes more effective after identifying which mix of orders produces better results with current capacity and which types of demand are worth developing further.
This allows new production capacity to support a more effective operating model.
New machinery increases production capacity while preserving the existing order mix. Expansion becomes more effective after identifying which mix of orders produces better results with current capacity and which types of demand are worth developing further.
This allows new production capacity to support a more effective operating model.
24% → 37%
Share of incoming enquiries matching the priority order profile
+32%
Increase in enquiries from companies matching the Target Account List criteria
−28%
Reduction in low-priority enquiries reaching the full quote preparation stage
Business results come from interconnected decisions
Business results come from interconnected decisions
LET’S TALK ABOUT YOUR PROJECT
email: eugeniashelest@gmail.com