Success in today’s manufacturing environment depends on how quickly and effectively a company can respond to changing customer demands and global supply chain conditions. The manufacturing function gets pressured from all sides to significantly expedite operations and cut costs even while their supply chain is increasing in complexity. Balancing manufacturing efficiency, lead-times, inventories, transportation costs and capital investment while maintaining an acceptable cost structure and meeting product delivery requirements is a challenge that needs to be addressed by Operations Managers.
The Challenge
The absence of appropriate data and a robust decision-support framework impedes the Operations Manager’s ability to make good choices and decisions rapidly in a wide variety of situations. Therefore, organizations are driven to decisions based on experience and/or “gut-feel”. Such decisions are supported by ad-hoc, laborious data gathering and analysis involving a combination of people, paper and tools or just a simple hunch on the part of the business manager. This approach really does not “expose” the true opportunities that are available, and in addition, the fear of the unknowns in the analysis results in “padding” and “safety factors” that further distort the outcomes. Given the changing business environment (e.g. volume, product mix) it is also difficult to assess post-fact whether a decision yielded the benefits that were initially planned.
The Solution
SCA’s solutions offer a comprehensive modeling framework for optimizing manufacturing operations by enabling Operations managers and Controllers to conduct a broad array of “what-if” types of decision analysis on their businesses.
Make vs. Buy Decisions: Exploring the most economical way to supply intermediates or finished goods with a view or impact on total cost, capacity and headcount.
Product Introduction Decisions: Exploring the cost and operational impact of introducing new products into the current manufacturing system. Identifying the optimal cost location based on a minimum total cost approach.
Product Rationalization Decisions: Exploring the cost and operational impact of removing products/intermediates from the current manufacturing system. Specifically, to see how the profitability if other products are affected as fixed costs get shared.
Optimal Manufacturing Choices: Exploring where to make current products & intermediates to meet desired source levels at the lowest possible cost structure.
Through an integrated finance, manufacturing operations and logistics model, SCA solutions facilitates a P&L view along with key operating metrics (e.g. headcount, capacity utilization, capital investments, etc.) that business managers can use to assess alternative business strategies, their impact and sensitivities to market variables. In addition, the solutions facilitate optimization of the manufacturing operations where multiple variables are examined in order to identify the manufacturing strategy that best meets the needs of the business.
