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Factory Footprint Review
Our client is a global industrial components manufacturer operating eight plants worldwide. Margins have been declining, and management is questioning whether its current manufacturing footprint is optimal. How would you structure this problem?
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📋 Solution:
Factory Footprint Review
Clarifying Questions:
• Is the margin decline global or concentrated in specific regions?
• Is management open to plant closures or relocations if justified?
Solution:
I would structure this around four key dimensions: capacity alignment, cost competitiveness, supply chain proximity, and transition feasibility.
- Capacity and demand alignment
• Compare plant capacity to regional demand forecasts.
• Identify underutilized facilities.
• Evaluate redundancy across similar product lines.
- Cost competitiveness
• Benchmark labor, energy, and overhead costs by plant.
• Assess productivity differences across facilities.
• Identify structural disadvantages by geography.
- Supply chain and customer proximity
• Evaluate transportation distance to key customers.
• Assess supplier access and input cost differences.
• Consider lead time implications.
- Feasibility and transition risks
• Estimate closure or relocation costs.
• Evaluate workforce and regulatory constraints.
• Assess customer disruption risk.
