Central Europe manufacturing

Summary

Following the success of our earlier Productivity Review project, the Client requested that we evaluate the potential for establishing a factory in Central Europe and what the scale of benefit could be.

Project Background

Having already determined there was significant scope for operations improvement the Client was looking for a 'Step Change' strategy that may give it a significant competitive advantage in the region.

Approach

Based on LCP's established operations in Czech Republic the process:
• Map the existing Northern European production platform in terms of product families, manufacturing lines, resources and capacity
• Shortlist product families most suited to production in Central Europe
• Consolidate volumes, review the different manufacturing technologies involved and establish a new (optimised) manufacturing footprint
• Design the factory based on the above and projections for trading volumes over the next five to ten years
• Create an operating budget based on known local trading conditions and compare with current P&L
• Prepare a business case for Low Cost Manufacturing, including benefits and incentives for 3 target Countries in Central Europe.

Client Testimonials

LCP has enjoyed a very close working relationship with this Client through providing support across the Operations.

Success Factors

Securing agreement to rationalisation operations singularly gave the business 'a stay of execution' and the time to implement wider improvements.

Results and Benefits

LCP demonstrated that
• the Client could cut its total operating costs by greater than 16% by moving to a 'Low Cost Manufacturing Strategy'

LCP identified and quantified New Market opportunities for the Client
• by exploiting the Central European market that to date it had not served
• to grow market share and reduce its operating cost base, further enhancing (as a minimum sustaining) margin

LCP designed a new production facility that would enable migration of production into Central Europe

A clear case for rationalising production was made and progressed by the Client - improving asset utilisation and margin retention.