Supply Chain Network Design – Fortune 50 Manufacturer

Results Case Studies

Case Study Snapshot

Results At A Glance

Analysis Scope

Global Supply Chain

Scenarios Modeled

Multiple Footprint Options

Key Gap Identified

Asian Market Capacity

Key Takeaways

  • Baseline capacity analysis mapped current state against growth projections.
  • Multi-criteria scoring (CapEx, IP risk, reputation risk, NWC impact) evaluated candidate locations.
  • Scenario analysis provided leadership with clear trade-offs for each footprint option.
  • Largest capacity gap identified in Asian market guided investment prioritization.

Where This Approach Fits

Best for divisions preparing for divestiture or M&A that need to evaluate supply chain footprint independence.

Supply Chain Strategy Facility Location & Network Optimization

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Problem / Challenge:

A division of a Fortune 50 manufacturer was preparing their supply chain network strategy for their divestiture from the parent company. The business needed to analyze a variety of supply chain footprint options to support the planned growth while exiting parent-company facilities at pre-determined time periods. The global supply chain consisted of raw material sourcing, polymer manufacturing, compounding, and warehousing.

Baseline / Current State

We gathered detailed current state information. Specifically, we needed to understand current capacities, historical volumes, and historical and forecasted demand. We also categorized polymer production and compounding based on logical manufacturing units which tied to specific production assets.

Identify Candidate Locations

  • Asian Manufacturer and Tollers
    • The division team was facing reduced compounding capacity as well as strong forecasted demand growth. The largest gap from production capacity to forecasted demand was in the Asian Market
    • We worked to identify a variety of new compounding capacity through:
      • Tollers / 3rd party compounders
      • Acquisition Targets
      • Greenfield Sites

Production Constraints / Asset Utilization

  • Align Production Assets with Part Groupings
    • We analyzed capacity manuals to understand production capacity by product
    • Several assets could produce a wide range of product groups with significant variation in throughput speed by product
    • Developed a model to enable scenario analysis across various supply chain footprints

We identified Constraints in the Current Network

Supply Chain Network – Visual

Defined Metrics for Scenario Comparison

  • Capital Expenditure
  • % of Finished Goods Compounded Locally
  • Reputation Risk
  • Intellectual Property Risk
  • Impact to Net Working Capital
  • Controllable Fixed Costs Owned Facilities
  • Tolling Premium

Scenario Development:

  • We developed multiple scenarios to understand the options available to the team and the tradeoffs they provided.
  • Scenarios ranged from maximizing current capacity to maximizing production in a region for a region.

Difficulties Encountered:

  • Some of the key decision drivers were not easily converted into a financial decision
  • Specifically Intellectual Property risk and Reputation Risk were more strategic decisions for the team than financial

Results

  • The team had a strong understanding of their options as they exited the parent company’s business.
  • The new leadership leveraged the study to inform their supply chain footprint decision

Learn more about our Facility Location and Network Optimization Services

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