Production Footprint 

Optimal alignment of the production sites

Optimal alignment of the production sites

Sustainable sales growth through the use of your own resources and capacities

In recent years, the optimization of complete global production networks has moved into the centre of attention, mainly because the increase in performance at individual locations is reaching its limits. Thanks to the interdependence of production and supply chains, there must be a holistic view for optimization. This also makes it necessary to question the roles at the different locations and planned management of the information and material flows.

Redesigning the footprint is a multidimensional and complex task

The coronavirus pandemic has fueled discussions on the topic of footprints and network configuration. There are other multi-layered starting points, such as the question of the right location in terms of whether their suppliers can still maintain the supply chain in the pandemic situation. The increased focus on the security and robustness of the supply chain due to the Corona crisis has clearly gained importance for companies in footprint design.

A footprint analysis requires complex data collection in different areas. The required production area, the proportion of personnel costs and the product life cycle are taken into account, as well as sales markets.

Footprint Analysis

Labour costs can be set in relation to the transport costs; a transport cost calculation can be created with a matrix or a manufacturing cost analysis can be carried out. The result of the analysis is a profile on product families and restrictions on the product level for further network planning.

We can support you in developing a footprint

  • Footprint design and strategy
  • Development of a strategic objective and derivation of the requirements
  • Development of footprint alternatives that meet the strategic objectives
  • Evaluation of target values, such as transport costs, delivery times or inventory costs, using a simulation
  • Planning out the steps to relocate and creating an implementation roadmap
  • Ifp consulting supports new planning or expansion planning with the creation of a detailed factory or warehouse plan (Link)

What are the reasons to deal with the topic of footprint?

First of all, wage costs can be an impetus for considering a changed footprint. In Europe alone, there is a wage cost range of 5 € per hour to 40 € per hour in individual regions, which significantly impacts fixed costs. But capacity utilization, transport costs, unnecessary redundancies, the correct use of resources, access to qualified and highly qualified personnel and a corresponding supplier structure also play a decisive role. These influences and components of a network are constantly changing and are therefore drivers for necessary changes in the production network. The influencing factors are processed and evaluated as part of an analysis of a production footprint. A specific recommendation for action for production and logistics can then be derived as well as overarching savings potential.

Optimized production and logistics network

What is our understanding?

The central task in developing a production footprint is to optimally align the production and logistics network with the company’s goals. The following factors must be individually balanced for the company:

  • Ideal depth of added value or, make or buy ‘consideration
  • Technology planning and global standards in manufacturing and assembly
  • Role definition of the locations
  • Distribution of competencies and capacities in the network  
  • Balanced sourcing (global and local)
  • Organizational structure (central / decentral)
  • Know-how and innovation distribution

What is the difference between network planning (global footprint design) and production footprint?

Network planning and optimization (link to network optimization) relate to the entire network (end-to-end view). This means that the upstream and downstream logistics processes (procurement and distribution) are also included in a global footprint consideration. The pure production footprint consideration, which focuses on the alignment of the production sites, can be distinguished from this. The production aspects such as technology and competence planning, allocation of capacities and cost efficiency are considered.

 

Contents of a footprint redesign

Stufe / 01

Strategic goal setting

First, the strategic goals are defined in order to present the sense of urgency transparently. In this way, stakeholders and shareholders can pull together. In this phase, the ifp Network Quick Check turns into Supply Chain Excellence.


Stufe / 02

Gap Analysis

In the next step, the current situation is recorded, and a gap analysis is carried out, which is subdivided into an analysis of the added value and the market/customer. The following are used: portfolio analyzes, trend analysis, sales forecast, technological trend analysis, process cost representations, and segmentation analysis.


Stufe / 03

Development of footprint alternatives

Based on the previous stages, footprint alternatives are developed. Depending on the strategic objective, the merging of locations is discussed, the establishment of new locations in order to reach new markets or to be able to realize growth.

Stufe / 04

Simulation models

In order to be able to objectively evaluate and compare the footprint alternatives, it can make sense to set up a simulation model and test different scenarios. Here, transport and delivery times, transport costs and inventory costs are compared. In addition, best and worst-case scenarios are created.

Stufe / 05

Footprint selection

In the next stage, the results from the simulation model (measurable KPIs) are evaluated with further qualitative evaluation criteria for each footprint alternative. The decision is made on the footprint alternative with the highest degree of target achievement.

Stufe / 06

Transformation

Depending on the selected footprint alternative, this is followed by further planning of the relocation or, in the case of new planning/expansion (greenfield/brownfield), detailed factory or warehouse planning.


Faktoren des Erfolgs

Die inhaltlichen Punkte müssen allerdings durch weitere Faktoren begleitet werden. Dazu zählt ein Team mit den richtigen Kompetenzen und Fähigkeiten und der Einsatz der richtigen Methoden und Werkzeuge. Hier können klassische Tabellenkalkulationsprogramme die oft äußerst komplexen Zusammenhänge nicht mehr richtig abbilden. Unsere Spezialsoftware kommt deshalb zum Einsatz.

Was sind die größten Fehler in der Restrukturierung des Footprints? 
  • Unzureichendes Verständnis und mangelnde Transparenz der Prozesse 
  • Fehleinschätzungen der lokalen Situation 
  • Unüberlegtes Festlegen der Fertigungstiefe bzw. Make or Buy 
  • Unterschätzte Investitionen und Folgekosten 
  • Effizienz und Qualitätsverluste im oft zu langen bzw. unzureichend geplanten Hochlauf 

Footprint

Take away

Die Neuausrichtung des Footprint Designs ist eine komplexe, strategische Aufgabe. Sie haben in der Regel nur einen Versuch und dieser sollte perfekt platziert sein, denn „Webfehler“ im Footprint können desaströse Auswirkungen für Ihr Geschäft haben. 

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