World-Class Performance Management System Uncovers the Hidden Factory and Unleashes Growth

Client Context

A global chemical manufacturer faced a challenge stemming from its own success—multiple years of sold-out product lines and an urgent need to increase capacity. However, given regulatory constraints, long lead times for capital projects, and the unpredictability of long-term global demand, expanding through capital investments was not a viable solution.

Despite this, line managers believed capacity was already maximized, as internal KPIs were green and no obvious inefficiencies were apparent. The new COO engaged EFESO to challenge this capital-dependent mindset and uncover hidden inefficiencies—the ‘Hidden Factory’—by installing a world-class performance management system that would drive continuous improvement and operational excellence.

Key Challenges

• Existing KPIs masked inefficiencies, making it difficult to identify untapped capacity.
• Managers focused on maintaining positive KPI results rather than driving real operational improvements.
• Traditional performance reviews lacked a structured cadence, leading to reactive rather than proactive decision-making.
• Cultural resistance to change, requiring a mindset shift toward aggressive goal-setting and transparency.

Approach & Key Success Factors

EFESO implemented a performance management system designed to expose inefficiencies, improve accountability, and optimize resource allocation:

• Established meaningful KPIs at every organizational level, from shop floor to executive leadership, ensuring alignment with industry best practices.
• Connected KPIs to margin and profitability, providing leadership with clear visibility into operational impact.
• Challenged existing performance targets, shifting the focus from looking good to achieving real, measurable improvements.
• Implemented a structured management cadence, where reviews were categorized by theme:
  • Problem Solving at the operational level.
  • Resource Allocation at the managerial level.
  • Performance Reporting at the executive level.
• Integrated KPIs into compensation and reward structures to reinforce the importance of continuous improvement.

Results

$83M

Revenue increase with no additional capital investment.

10%+

Improvement in gross margin, driven by efficiency gains.

From 85% to 98%+

Schedule attainment (OTIF) improved enhancing service performance.

From 3.4 to 4.5

Employee engagement score increased, reflecting stronger alignment with company goals.

Cultural transformation—shifting from conservative targets to aggressive goal-setting and continuous improvement mindset.