A life and materials science company had achieved steady growth via a strategy of acquisitions and organic expansion. However, shifting demand between global regions and increased competition were affecting its ability to meet its targets for return on capital employed (ROCE).

To address this situation, the company wanted to review its manufacturing sites and supply hubs to find ways to reduce the cost of goods sold (COGS) and supply chain complexity.

While it recognized some business units had the potential to expand, it wanted to ensure production was growing in the right locations – and that this was in line with the business’s strategy and drivers.

To realize the potential of its industrial footprint, it wanted to implement processes that would help it develop a business operations strategy (BOS).  

Starting with a pilot project for just one business unit, we tested a toolkit and methodology to support the development of a BOS – which were later rolled out to three further units.  

These projects enabled management teams to answer key questions:

• Where should manufacturing and supply hubs be located?
• Why is the developed network setup the right answer to future challenges?
• How could this vision be implemented / what was needed to get started?

The BOS projects enabled the company to qualify and align demand forecasts and understand what was required to be successful in the market – and how this would translate into the requirements placed on its network.

We also analyzed the potential of the existing network, assessed the organization’s maturity level, and identified potential gaps that would need to be addressed before a BOS could be implemented. We also developed alternative scenarios that evaluated the risks involved and the financial impact on cash-flow.

To enable the management team to run these BOS projects autonomously, we also facilitated a knowledge sharing and training program that involved a gradual hand-over.

As a result of the BOS projects, an industrial footprint setup for four different business groups was developed. This covered future manufacturing sites and supply hub locations as well as the CAPEX spending and implementation projects required to make it happen.

Management teams can now comprehensively evaluate scenarios and translate this into an executable operational strategy, for the medium to long-term, that is in line with the company’s ROCE targets.  

This approach, which has delivered significant financial benefits, was also well received by the broader business – with other business groups now looking to develop their own BOS projects.