CALL US TODAY

02-096-3496

Weekdays

09:30 ~ 18:00

A TRIUMPHANT COME-BACK: THAI MARUJUN SHARES THE EXPERIENCE OF WORKING WITH LIB CONSULTING SERVICES

Thai Marujun Co., Ltd. manufactures automobile pressed parts and metal molds. The company was severely hit by the Covid pandemic, and difficult decisions had to be made in order to reduce expenses and improve profitability. To facilitate the cost-optimization project, Thai Marujun Co., Ltd. engaged LiB Consulting.

What was the situation like at Thai Marujun before the company started working with LiB Consulting?

K. Chaichana Jarakorn, Parts Division Manager, said: “During the pandemic, the company was dealing with declining revenue and significant financial losses – the sales dropped by 50%, so we had to reduce the headcount of our production team, and cut the remaining employees compensation packages. However, these measures reduced the total costs by only 2%, which was not nearly enough to improve the situation. We realized that we did not have enough experience in cost-reduction and needed professional consultants to help us.”

Why did Thai Marujun decide to work with an external consulting firm?

2020 was a difficult year for Marujun and the automotive industry as a whole. When sales were falling short of the plan due to the shortage of semiconductors, we realized that what we were doing internally was not sufficient. Under these circumstances, the company decided to turn to LiB Consulting for help.

“Following the falling revenue and ongoing cost management problems, Thai Marujun continued to suffer from losses. However, we could not identify the reason why the measures which we were implementing were not working. We had been analyzing the strengths and weaknesses of our company before, but only in terms of Quality Management and not cost saving. That’s why we started looking for a business consulting company to help us, and came across LiB Consulting”, said K. Chaichana Jarakorn.

 

K. Nannaphat Atkinson, Business Planning and Management Secretary Department Manager, added: “In the past, many processes in Thai Marujun used more people than necessary. Multiple problems were related to quality control, leading to unnecessary expenses and higher production costs. There were also several issues that we could not see from the inside. It became evident that we needed a professional outside perspective. We started looking for a reliable company with a clear record of success and at a reasonable cost. The decision to work with LiB Consulting was made by the parent company in Japan. And after studying LiB Consulting’s track record, we were confident that they have the expertise to help us cut costs and finally get us back on track to generate profit.”

What do you think was the most crucial element of the project’s success?

The results which we got were achieved not only through implementing the steps recommended by LiB Consulting, but also because of the changes which the consultants made to the organizational culture and business practices. The project heightened the awareness of the need to reduce costs and increase productivity — we had to realize that without succeeding in making improvements, inevitable problems with performance-based evaluations will follow. But once the reality was accepted, significant progress in cost reduction was made, and that positively affected several areas of the business.

How do you plan to proceed with the plan and what are you doing currently to manage costs?

Thai Marujun has continued to implement the cost-optimization approach developed in partnership with LiB Consulting. A newly formed department, called Business Planning, is now responsible for following up on the project. The measures we are currently implementing include not only reducing the headcount, minimizing overtime and forklift, but also some less obvious decisions. For example, monthly bus fare costs were reduced by 75%. All these actions in combination produced the desired effect — in January 2022 the company registered a profit which exceeded expectations by over 300%, avoiding losses which would have incurred if no measures had been taken.

So, can you say that you are satisfied with the results?

We would prefer to invest rather than cut down, but as I mentioned before, if you have to cut costs, you better do it effectively. With the help of LiB Consulting, we managed to achieve the results we needed. Our profitability not only exceeded the plans, but also went beyond the main office’s expectations — the Japanese management is impressed by the Thailand branch’s performance and is satisfied with the shape that Thai Marujun is in. So, we are pleased with the results.

“After we worked with LiB Consulting, we were really impressed by the team’s professionalism. They operate in a fast, efficient and systematic manner – something we want to emulate in our organization in the future. The consultants brought in not only their expertise, but also the outside perspective which we so much needed. This helped us see things which we ourselves had overlooked.”

“Like with any other organizational change, there were some difficulties at first, because we had to coordinate our initiatives on several fronts. However, everyone made an effort to overcome the problems together. We managed to optimize our costs and increase our efficiency. We reduced resource consumption, and reduced redundancies in work processes to save time. But besides these direct immediate results, LiB Consulting made the team understand the long-term importance of cost-optimization. This directed us towards better understanding of the principles of cost management, resource management, and time management. Understanding of these management principles will pave the way to a steady growth for our organization,” K. Nannaphat Atkinson added.

About LIB Consulting

LiB Consulting (Thailand), A Japanese management consulting firm that emphasizes a results-oriented, hands-on approach.

Our mission is to “increase companies that shape a better world in the next century”, our firm provides “results-oriented” support from strategy to implementation to improve Thailand through consulting for companies and government agencies. We believe that consulting can change the world for the better by supporting companies that are contributing values to the world.

Senior Manager: Dr. Darin Lanjakornsiripan

Manufacturing Group Manager: Dr. Lalita Haritaipan

Address: Level 29, 388 Exchange Tower, Sukhumvit Road, Bangkok

Contact: info_thai@libcon.co.jp