2016-03-31-OC_C-Re-assessing_industrial_footprints_8页_4mb

报告摘要

REASSESSING INDUSTRIAL FOOTPRINTS: A Summary

Core Content

In an increasingly globalised world, the traditional approach to designing an optimal industrial footprint is no longer sufficient. Companies must now re-evaluate their manufacturing strategies to adapt to new market realities, technological shifts, and competitive pressures. The document outlines a structured approach for companies to reassess their industrial footprints, focusing on strategic repositioning, cost efficiency, and governance.

Main Challenges and Opportunities

Challenges

Volatility: Factors like currency fluctuations, shipping rates, tariffs, and taxes are making cost prediction more complex.
Changing Cost Norms: Asian production capabilities, especially in China, are reshaping cost structures and competitive dynamics.
Complexity: Legacy systems and inconsistent data make it hard to benchmark and optimise operations.
Global Competition: Companies cannot ignore the threat from distant competitors entering traditional markets.

Opportunities

Re-shoring and Automation: Western companies can leverage automation to reduce low-cost competition and improve local manufacturing.
Strategic Clarity: Reassessing the footprint allows companies to align their operations with long-term goals.
Data-Driven Decisions: Comprehensive data analysis and simulation models can help companies make informed strategic choices.

Key Concepts for Footprint Reassessment

To effectively re-evaluate the footprint, companies should focus on the following four concepts:

1. Consistent Strategic Units (CSUs)

Issue: Companies often face artificial complexity due to outdated product classifications.
Focus: Redefine product clusters using a rigorous business definition to simplify strategy and operations.
Example Metrics: 60,000 SKUs, 5,000–6,000 products, 150 product families, 12 key processes, and 5 CSUs.

2. Current Full Potential

Issue: Inaccurate assumptions about capacity utilisation can lead to poor strategic decisions.
Focus: Challenge plant managers to simulate optimal output and cost positions when fully utilised.
Impact: Can increase capacity by 25% and reduce unit costs by 5–10%.

3. Footprint Scoring Index

Issue: It's difficult to compare plant efficiencies across countries without a structured framework.
Focus: Score countries based on 'ex-works' production costs and 'ease of doing business' to facilitate benchmarking.
Tools: Use dynamic databases and publicly available data to assess and compare performance across regions.

4. Dynamic Cost Position

Issue: Traditional cost benchmarks are being redefined by the scale and efficiency of Asian producers.
Focus: Quantify and project future cost positions relative to competitors, especially in China.
Considerations: Include client sensitivity to price, service, and logistics, and assess the risk of supplier switching.

Recommended Approach

Diagnosis is Critical: A comprehensive footprint reassessment typically takes 4–5 months for companies with 25–50 plants.
Integrated Tools: Build a dynamic plant economics database, competitor analysis database, industry footprint index, and simulation tool.
Strategic and Governance Alignment: Ensure that footprint changes are reflected in both strategy and organisational structure.
Parallel Action: Address strategic and governance implications simultaneously with the diagnosis to accelerate decision-making.

Conclusion

The globalised manufacturing landscape demands a more agile and data-driven approach to footprint management. Companies must move beyond short-term thinking and adopt a long-term, integrated strategy that considers both internal and external factors. By rethinking their industrial footprint, they can better navigate the complexities of a rapidly evolving market and secure a competitive advantage.