JSC KSP of Krasnoselsky District is a production company with more than 35 years of history, working in a stable but highly regulated segment. I was invited as an external business partner to bring order to project economics and production cost management. The focus was to increase margin without reducing product quality or breaking contract obligations.
At the start of the project, the actual production cost reached 97%, which almost eliminated the margin and made new contracts economically meaningless. The reasons were systemic: no real competition among suppliers, outdated recipes, no system of raw material alternatives, and outdated time and material norms. In this configuration, any change in prices or volumes automatically created cash gaps and constant pressure on working capital.
I introduced a procedure for competitive supplier selection. In parallel, I reviewed costing cards: production time norms, material write-off norms, and actual technological routes. At the process level, this required changes in business procedures: synchronizing procurement with the timing and terms of client contracts, removing duplicate accounting of time and materials, and implementing a system of raw material alternatives that allowed replacement of positions without loss of quality.
Synchronizing payment terms under cost contracts with revenue contracts reduced the risk of cash gaps and balanced the liquidity load. Labor productivity grew by removing duplicated time norms and choosing recipes with minimum time costs, which also reduced personnel costs. Project margin was restored: the cost level was reduced from 97% to 80%, which returned economic meaning to the order portfolio and created a basis for further scaling.
Back to cases