Companies around the globe are reviewing their manufacturing footprints in a higher frequency and based on more detailed analyses. This need for more frequent and detailed manufacturing footprint reviews is driven by geopolitical uncertainties, ever faster market and location changes and the introduction of new production technologies. Elements that are reviewed include the number, size and functionality of the manufacturing plants, their locations and the production technology within the plants.
Because of the increasing uncertainties companies often choose to conduct scenario analyses. The geographical scope of the optimization can differ: domestic (e.g. China, US), regional (e.g. Europe or South-East Asia) or global.
A variety of internal and external considerations can be the driver for the need to review manufacturing footprints: cost reduction, business growth in new markets, the introduction of new production technologies, a merger or acquisition, geopolitical developments, etc. These questions are valid for large mature companies who have a focus on efficiency, but also for fast-growing companies with much more focus on facilitating further and even faster growth of the business.
The optimization of manufacturing footprints is often done through scenario analyses. Based on forecasts and assumptions about market developments, cost developments and technological innovations different scenarios are defined for the optimal network of manufacturing plants. Examples of scenarios can be consolidation versus expanding the number of manufacturing locations, off-shoring versus near-shoring, investing into new production technologies versus expanding in low labor cost locations, etc.
BCI, based on it practical experience working with companies around the globe, observes a number of trends in manufacturing footprints:
BCI supports companies in optimizing their manufacturing footprint through the following services:
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