Business case delivers huge savings for textile giant
Project facts
- ClientMultinational textile manufacturer
- LocationEurope
- ChallengeBusiness case with best scenario to optimise operations while increasing flexibility and production capacity
- SolutionBy optimising the existing site our client could cope with growth and benefit from immediate improvements
The challenge
The business case also identified annual savings of €3.5 million in operating expenses. Furthermore, it showed that existing manufacturing sites are able to cope with future challenges.
Our client wanted to increase textile production capacity in its European factories to meet anticipated demand. Moreover, it needed to reduce production costs in the face of rising competition from Asia.
With two factories in close proximity, the question was whether it was best to extend production at the existing plants or combine them in a new greenfield site.
The solution
Extra production capacity only needed for specific product range
We matched the existing supply chain strategy with market trends to ensure we worked on the appropriate constraint. Then we looked closely at expected sales growth for each SKU (Stock Keeping Unit), SKU routings and key operational performance measures. We identified that additional production capacity was only needed for a particular family of products. What’s more, we discovered that another product family had over-capacity. By replacing machines delivering over capacity with those needed to achieve the required growth, the new optimal machine park can meet future sales demand and offer flexibility.
We organised an improvement workshop to map future production processes. Realistic and feasible solutions were translated into concrete opex savings.
To estimate an accurate capex, we made a technical concept of all scenarios. Together with key financial measures, expected opex and capex, we were then in a position to model the business case.
The result
Utilising real-time data for planning significantly increases operator productivity
Investigating more closely, we discovered that the planning system for HR scheduling used historic and average data. By feeding real-time data into the planning system, operator utilisation increased by 15%.
Our study revealed greenfield investment would not deliver on key financial measures such as internal rate of return, net present value and payback time. Furthermore, we proved that by optimising the existing site, our client could cope with future growth and benefit from immediate improvements.
