operations flexibility in process industries - Roland Berger Strategy ...

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1DEVELOP BUSINESS SCENARIOSEstablishing flexibility starts with creating different business scenariosand assessing the related cost and benefits of flexibilityDeterminants of flexibility valueDifferent business scenarios trigger the needto evaluate cost and effects of becoming moreflexible. Business scenarios can be calculatedwith different time horizons and incidentprobabilitiesEBITScenario AOccurswithprobabilityThe cost of becoming more flexible aredetermined by the actual degree of flexibilityand the cost of implementing additionalflexibility measures. The type of measures tobe implemented crucially depends on the timehorizon of the business scenariosNoinvestmentin flexibilityIncidentP AThe benefits from flexibility are the effectsresulting from the measures implementedduring the realization of one of the possiblebusiness scenariosinvestmentin flexibilityScenario BOccursCost of becoming more flexibleEBIT development scenario AGains from flexibility scenario AEBIT development scenario BGains from flexibility scenario BwithprobabilityP B22AirbusTIMESource: Roland Bergerinterview
2DEDUCT OPERATIONS FLEXIBILITYBusiness flexibility needs are often not systematically derived fromthe company's strategic objectivesLink between strategic objectives and measuresCONCLUSIONNEGATIVE EXAMPLEIs flexibility part of yourstrategic objectives?• The majority ofparticipants confirmflexibility to be part oftheir strategy• Strategic objectives could be able tocope with demand increase of 10%• Further divestments of operations61%assets; increase of outsourcing level39%Independent OP objectivesYes NoIs flexibility transferred asan objective of youroperations strategy?t 59%41%• On the other hand a lotof companies lack thetransfer into thedesiered flexibility oftheir operationsPurchasingManufacturing• Demand fluctuations of -5% withoutpurchasing price effect• Develop second supplier for keycomponent• Compensate 5% volume reduction incost per piece• Prepare to insource 30% of volumefrom contract manufacturer• Build task force to prepare integrationof potential acquisitionYesNoSCM • Demand changes of 5% withoutdecreasing service levelSource: Roland Berger interview results, 200823Airbusinterview
Page 1: OPERATIONS FLEXIBILITYIN PROCESS IN
Page 4: The study covers three process indu
Page 7 and 8: Eight trends in the pharmaceutical
Page 9 and 10: Six trends in the consumer goods in
Page 11 and 12: Participants of this study confirm
Page 13 and 14: Different flexibility types exist:
Page 15 and 16: 1 DEMAND FLEXIBILITYPredicting year
Page 17 and 18: 3 NETWORK FLEXIBILITYFlexible produ
Page 19 and 20: 5 BUSINESS PORTFOLIO FLEXIBILITYM&A
Page 21: Choosing the most suitable flexibil
Page 25 and 26: 4MEASURE IMPLEMENTATIONDecisions re
Page 27 and 28: DBest practice flexibility levers27
Page 29 and 30: M&A FLEXIBILITY LEVERSWith regard t
Page 31 and 32: 1A manufacturer of pharmaceutical p
Page 33 and 34: 3A consumer goods and a pharmaceuti
Page 35 and 36: 5A large consumer goods company fac
Page 37: 7The specialty chemicals company us

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