Labor Cost Reduction Without Sacrificing Productivity

The Business & The Challenge

A global food &beverage manufacturer with USD 25 billion in revenue and operations spanning 73 plants in 12 countries across 5 continents faced urgent post-merger integration pressures. Among them:

• The need to optimize labor costs across a large, diverse operation
• Pressure to drive efficiency while maintaining or improving productivity
• Variability in processes and labor practices between sites

The solution:
Develop a standardized, optimized operational labor model based on value-driven diagnostics.

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Approach Details

Falconi launched a multi-wave transformation plan spanning over a year with five core waves, followed bya results sustainment phase.

Key Implementation Phases:

• Wave 1–3: Global data collection and plant baseline alignment
• Wave 4: Hypothesis testing and validation of new labor standards
• Wave 5: Execution and control of the new model
• +5 months follow-up: Continuous monitoring and results reinforcement

Strategic Steps:

• Centralized global analysis to identify best practices
• In-depth labor efficiency benchmarking and task division assessments
• Alignment of baseline assumptions across plants
• Design of new labor structures using value-added analysis and waste identification (Muda)

Results Achieved

Initiative Area                                                                              Value (USD)            Share (%)

Headcount  Reduction/Elimination/Combination         $29.3M                  25%

Processes & Procedures  Revision                                $24.4M                  21%

Overtime Reduction                                                        $22.9M                 20%

Shift/Crewing Structure Changes                                  $18.9M                 16%

OEE Improvement                                                            $11.1M                  10%

Equipment & Machine  Adjustments                               $8.8M                  8%

Total Savings                                                                                 $163M                   100%

✅ Enhanced efficiency with no drop in productivity
✅ Eliminated poor task divisions and streamlined crew structures
✅ Sustained improvement via embedded internal methodology

Why It Worked

• A data-first approach to labor analysis using centralized and plant-level benchmarks
• Visual tracking of time, performance, and task distribution (e.g., time cooking variability for specific recipes)
• Addressed labor inefficiencies without compromising output goals
• Created a replicable labor cost model internalized across the global company     structure

Conclusion

Falconi supported this multinational manufacturer in achieving USD 163M in labor savings through disciplined diagnostics, well-paced execution, and a globally scalable model. The initiative helped turn a merger challenge into a long-term performance advantage — maintaining operational excellence while significantly reducing labor costs.

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