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

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DEMAND FLEXIBILITY LEVERSLevers to tackle demand flexibility are well known, though theirimportance in the eyes of operations managers is changingTop levers address demand flexibilityRank # General Purchasing Manufacturing Supply chain1IV.7TemporaryII.2Multiple/dualI.12Reduce lead timeIII.4workerssourcingin productionII.6SuppliercollaborationI.15SubcontractoruseIII.4Push-pull-pointdifferentiationOutsourcing2IV.6Flexible workingII.1Global/crossI.2Multi purposeIII.5hoursregional sourcingplantsIII.10Advanced planningsystemsBuffer stocksComments• Temporary workers andinternally flexible workinghours in the most commonmeans to tackle demandfluctuation• Models of both leversstrongly depend on locallegislation• Multiple sourcing or dualsourcing is applied forcritical materials• For materials/serviceswhere this is most feasiblecollaboration models up toJV approaches are applied• For suppliers where secondsource is too expensivesometimes dual siteproduction at supplier isrequested/ supported• Lead time reduction isclearly highest on theagenda of manufacturingresponsibles• Strategic flexibility is built inby using subcontractors forvolatile/peak demand• Multi purpose plants areconsidered whereeconomically feasible• A differentiated definitionof push-pull-point (make-toordervs. make-to-stock)has risen in the attention• Outsourcing remains anestablished lever to sharevolatility risk with serviceproviders• Buffer stock is used tocover sales upswingpotentials though focus ison lead-time reduction inproduction insteadSource: Roland Berger interviews, 20082828
M&A FLEXIBILITY LEVERSWith regard to establishing flexibility to better handle divestmentsand integrations, the clear focus is on more standardizationTop levers applied to address mergers & acquisitionsRank # General Manufacturing Supply chain Mgmt. Purchasing1IV.9Orientation onI.1Optimize productionfootprintfootprintIII.1WarehouseII.12industry standardsProductionOutsourcingIV.2StandardizedI.17II.7Monitoring/ KPIsystemsystemsCorporate LeadBuyer organization2IV.3Standardized&scalable ITsystemsII.13Standards oncommodity codes&use of databasesComments• Industry standards is widelynamed as key to be flexible• Often though standards arecountry specific and thereach is thus limited• Standard KPI systems area key lever to quicklyintegrate new companiesand make themmanageable• IT standards are anadvantage but depend onthe target company's setup• Clearly still on the rise isthe introduction ofproduction systems• Even if implementation willbe different a merge with acompany that has one isachieved much faster• In the context of PMI oftenoutsourcing is helpful,provided the contract is setup in a flexible way for suchcases• Often companies take thechance to outsource duringM&A situations as thejustification case withregard to labor laws arebuilt more easily• A corporate lead buyerorganization is consideredby most of the participantsas highly adaptive tointegrate or to be integrated• The increasing use ofstandard commodity andsupplier codes also is veryhelpful in integrationscenariosSource: Roland Berger interviews, 200829
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 and 22: Choosing the most suitable flexibil
Page 23 and 24: 2DEDUCT OPERATIONS FLEXIBILITYBusin
Page 25 and 26: 4MEASURE IMPLEMENTATIONDecisions re
Page 27: DBest practice flexibility levers27
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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