Identifying the right geographic locations for new plants as part of a 10 year multi billion dollar investment strategy
This story is for executives who:
- Have grown through multiple acquisitions and want to optimize their manufacturing and supply chain footprint
- Want to reduce risk, improve visibility and gain confidence making the right investment decisions for global expansion
- Need help embedding a strategic approach to supply chain and manufacturing optionality and optimization
The Challenge
A global provider of products and systems used in the semiconductor device fabrication process needed help identifying the right geographic locations for two to three new plants as part of its 10 year growth and investment strategy.
Lacking the tools and strategic approach to understand the impact of key service levels, total cost to serve and risk associated with the strategic options, the company engaged with SGS-Maine Pointe for help. With the company having grown through rapid acquisition and operating around the world, executives and the board did not have the insight across their businesses to make the appropriate strategic decisions.
Taking a robust analytical approach for enhanced decision making and investment support
SGS-Maine Pointe’s analysts, supply chain and operations team found a lack of insight and alignment across product groups to make significant investment decisions. Working across the client’s global footprint and collaborating with operational leadership, SGS-Maine Pointe Team:
- Interviewed senior executives across three divisions including leadership from supply chain, operations, quality, sales and marketing
- Worked with them to establish a baseline of their capacity across existing plants around the globe
- Ascertained what each division’s growth forecasts were over the next two years (only available data)
- Analyzed market research to establish high-confidence range for 10 year growth forecasts
- Extrapolated growth forecasts by division and geographic region to determine capacity requirements
- Worked in collaboration with our partner, the Global Supply Chain Institute, to drill down into economic, political, infrastructure and competence levels by country to quantify regional risk profiles
- Triangulated insights with five out of 140 SGS offices to verify our findings
- Assessed intellectual property risks associated by geography
- Took the data obtained and utilized an advanced supply chain design analytics platform to create ‘what if’ scenarios to understand key service levels, total cost to serve and risk associated with strategic options
- Worked collaboratively with the client’s executive team to narrow the investment locations
- Created a presentation with full findings and recommendations used for a board presentation
- Developed a supply chain and operations capacity/demand playbook for future use
In today’s dynamic, turbulent world, establishing a clear baseline for capacity across the organization and then triangulating that information using the latest digital supply chain and operations tools, has been critical to helping our client reduce risk and gain the confidence to make the right strategic investment decisions.
The Results
SGS-Maine Pointe helped our client gain confidence, reduce risk and make the right strategic investment decisions for new manufacturing facilities:
- Gained insight from functional leadership operating across three divisions around the world
- Built a capacity profile across the organization’s existing manufacturing operations
- Developed a 10 year demand forecast with capacity requirements across multiple geographic markets
- Ran ‘what if’ scenarios using the latest data analytics tools to understand key service levels, total cost to serve and risk associated with strategic options
- Drove cross-business unit collaboration and alignment
- Developed a supply chain and operations capacity/demand playbook for future use
- Gave the board confidence to make the right multibillion dollar investment decisions based on risk, cost and service
Lessons learned for other executives
- Establishing a baseline of capacity across your manufacturing plants is a critical first step
- Triangulation of multiple data points and using the latest market research and digital supply chain design tools to run ‘what if’ scenarios is key to confidence and reducing risk
- Supply chain and operations network design is a needed competency to optimizing resilience, agility cost and service