The approach to optimizing the product portfolio relied on systematic analysis of product, customer, and plant profitability.

Optimize/Rationalize Product Mix

In addition to strategic assessment, key financial indicators were used to analyze client’s product mix profitability.  “Product category” profitability analysis will reveal products that the client needed to discontinue in the future. “Product category” profitability by plant also reveals uncompetitive plants that needed to be fixed in the network. Lastly, we analyze customer profitability for major product categories to determine unprofitable customers. Product, plant and customer profitability allowed for the classification of all products into three categories: Keep, Maybe or Drop

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The profit maximizing product mix was finalized to be loaded into the plants and assets combinations in the future state. Several possible business and asset mix scenarios will be evaluated to define re-sized facilities for selected product mix (Keeps and Maybes). A detailed P&L is built from the bottom-up for critical cost elements for each scenario.

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Finally, gross margin analysis to demonstrate benefits achieved at business, and product category level will be conducted.

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Optimize Footprint Network  

Footprint network optimization is completed in two Phases, which included analysis of scenarios and development of detailed business cases and implementation plans for recommended scenarios. We analyze every plant in the network based on strategic value and operational performance. Strategic value of the plants will be calculated using measurable and intangible strategic elements.

Operational Performance values are assessed by understanding the capabilities at the production line level for each plant. The strategic asset matrix helps distinguish between plants with different performance and strategic importance.  OEE is the key measurement used to indicate how effectively plant work centers are performing.

 

Utilization, Throughput and Yield were analyzed for each equipment and aggregated at the plant level that raised key questions. BU growth targets are analyzed to determine overall asset strategy. Projected growth targets along with OEE improvement formed the basis of understanding potential to consolidate non-core plants. In addition, we analyze capacity for each technological process to analyze potential to consolidate assets within a plant. 

 

“Incremental” and “Ruthless” scenarios for plant and asset consolidations are analyzed. Final footprint recommendations for each BU are made based detailed business cases with BU strategy, savings potential and payback.  Potential savings and one-time costs were calculated for the recommended scenarios.  In the implementation phase, different options for recommended consolidation scenarios are analyzed in detail.

 

For selected options, deep-dive analysis are conducted across entire P&L to identify potential savings to develop a business case.  Key scenario elements of the business case are summarized for easy comparison. For the recommended footprint, detailed implementation plans are developed for transition and any plant closures.

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Improve Operational Efficiency Within 4-Walls

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OPEX diagnostic phase is aiming to identify and quantify the improvement initiatives for the following implementation: 

• Map and Analyze Current State

• Prioritize the top opportunities according to their benefits

• Develop high-level solutions for prioritized opportunities

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Sustain with Supply Chain Enablers

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We develop a Supply Chain Dashboard enabling leadership to easily identify efficiency and profit improvement opportunities

• Set of key metrics linked to strategic objectives and design of reporting

• Targets and accountabilities for all key enterprise measures

• Cascaded metrics down to Divisional and Functional head level with particular focus on Supply Chain

• Proposed format of reports

• Dashboard draft and beta-version

• KPI Dashboard implementation plan

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Sales & Operations

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We conduct a rapid assessment of the Sales, Inventory and Operations Planning process as this is a critical aspect of operations.  Balancing the supply with the demand in a financially and operationally efficient way is what separates the leaders from the laggards.

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