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Five Steps to a Better Production Network

Many OEMs focus on improving plant performance as the best way to achieve operational excellence. An often-neglected lever, however, is improving the production network.

A systematic five-step approach can help companies not only improve overall production efficiency but also serve customers better:

  1. Develop a manufacturing vision. Understand customer requirements, analyze key competitors, and model future demand scenarios.
  2. Build a network model. Gain transparency on the existing network—production volumes, cost, plant key performance indicators—and define important cost drivers.
  3. Determine the option space. Agree on the general option space, define the product portfolio for each plant, and describe the options and their key characteristics.
  4. Assess the options. Calculate the business case for each option, evaluate nonfinancial criteria and risks, and ensure the stability of the results.
  5. Launch implementation. Define a footprint transformation plan, specify clear processes for implementation, and prepare a standardized rulebook for better communication.
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