Change of Market Demand

When the demand is growing a manufacturing company is permanently under stress. The challenge consists in increasing the production capacity to make sure that every customer is delivered on time. Since manufacturing routes are made of several steps, encompasses different technologies and may be geographically distributed over different sites, the balance of the capacities to avoid bottle necks, though challenging in such systems, constitutes only one part of the task. Establishing the calendar of the investmenst deployment constitutes the other part of the task. It has to be precisely calculated because it has a dramatic effect on operations profitability. Investing as late as possible, while making sure that the market demand can be fulfilled anytime is the real challenge. The right trade-off between operations profitability, business reputation and financial risk can be found by a modelling and dynamic simulation approach.

Change of Market Conditions

Customer lead times distribution is a decisive key performance indicator of supply and manufacturing networks. It determines the customer delivery time and the service level. Each market has its specific expectations regarding delivery time. Supply and manufacturing networks are designed and operated to fulfill these expectations. It happens that a new actor on the market sets new standards and delivers its customers faster than its competitors. These ones are put under pressure and are forced to change rapidly if they want to preserve their market shares.

Reducing the customer lead time to fulfills market expectations and winning again market shares may increase the manufacturing costs and reduce the margin of the products sold. This is where a modelling and dynamic simulation approach helps. The identification of the corrective measures and their quantification supports the decision makers in choosing the best trade-off between operations profitability and business reputation.

Technology Transfer

For strategic reasons a manufacturing company may decide to transfer the production of a product portfolio from one plant to another one. Beside the main strategic reason for the transfer, preserving business reputation is doubtless the second most important strategic objective. This means keeping the availability of each product on the market. In terms of supply and manufacturing network design and optimization, it means keeping the customer lead times distribution unaffected.

The production capacity and the adequacy of the technologies available on the receiving plant can be tested prior the transfer with a modelling and dynamic simulation approach. The results will show the investments necessary to adjust the installed capacity and the amount of full time employees needed to operate the plant.

Mergers and Acquisitions

Beside the financial targets, preserving business reputation is doubtless the second most important strategic objective in a merge or acquisition process. For manufacturing industries this means keeping the availability of each product on the market. In terms of supply and manufacturing network design and optimization, it means keeping the customer lead times distribution unaffected while increasing operations profitability and minimizing financial risk.

A modelling and dynamic simulation approach enables to quantify different scenarios and establish the profile of each supply and manufacturing network design. This increases dramatically the transparence of the reallocation process, highlighting the strength and weaknesses of each scenario and enabling decision makers to take the right decision.