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Free E-book

Unlocking Value Through Digital Manufacturing

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Increasing productivity has been the core of every industrial revolution and Industry 4.0 is no different. Real time shop floor analytics and the interconnectivity of processes and machines will accelerate efficiency gains and cost savings leading to significant and sustainable value creation. In a slow-growth and increasingly cost competitive market, productivity gains are paramount, and no manufacturing company can afford to lose out in operational efficiency against their market peers.

In this white paper, Tim Raven discusses the correlation between overall equipment effectiveness (OEE) and EBITDA and illustrates how modest and quickly achievable gains in OEE can have a significant impact on EBITDA and company valuation. Through a structured engagement process mid-market consumer and industrial products manufacturers can unlock a 250bp – 400bp EBITDA margin improvement. For a $150M revenue business, this represents a $3.75M - $6.0M increase in EBITDA, and assuming an 8.0x enterprise value multiple, a $30M - $48M increase in value.

CXO key strategic takeaways

Most mid-market manufacturers have limited sales pricing / raw material purchasing power. Accordingly, revealing new opportunities to increase operating leverage / OEE and in turn increase production capacity without incurring additional direct labor, capex or SG&A overhead can be a significant driver of value.
Manufacturers that are in the bottom quartile from a cost conversion standpoint will generate superior returns versus their industry and market peers and will attain long term competitive advantage. Managing OEE on a real time basis is the first step to achieving this objective and in turn unlocking significant economic value.
Unlocking Value Through Digital Manufacturing Financial Impact of OEE Benefits of a Digital Transformation UnlockingValue-Internal3

About the author


Tim Raven is Managing Director and leads Worximity’s US practice. He is an operations, finance, and digital manufacturing expert with over 25 years’ experience working with privately held and sponsor-owned mid-market consumer and industrial products manufacturers.

M: +1.917.696.2754


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