A $20M savings plan from redesigning a global manufacturing network
Site-by-site improvement could no longer move the cost base of a global industrial technology company, so Opyflow redesigned its manufacturing network as a whole.
Over the years the network had grown one decision at a time, leaving plants with overlapping roles and a cost base that rose with every new unit of capacity.
Opyflow set out the future network and what each site is for. It also set up the transfer method and the management system that now run the programme.
$20M three-year savings plan approved · Production moving from Europe and the US to Asia · Tariffs and commercial flows built into every site decision · Thousands of SKUs under one transfer method
The challenge
Several plants in Europe and the US did similar work in different ways. The business plan called for substantial new capacity, and adding it to the existing network would have meant buying it at the old cost. Tariffs added another variable to every site decision. Beyond the strategy lay the hardest part: moving thousands of SKUs without a slip in quality, in delivery or in customer commitments.
Opyflow's work
Opyflow began with the network the business would need in three years and worked back to the sites from there. Each major site was assessed on strategic importance, capability, growth potential, scalability, operational readiness and landed cost. Each then got a mission covering what it makes and develops, and where its investment goes; the savings plan is built on those missions. Every transfer entered one portfolio and followed the same path, from feasibility and transfer planning through qualification and ramp-up to performance tracking.
What changed
Leadership approved the programme and its $20M three-year savings plan, and execution is under way. Savings arrive in stages as production moves and consolidates; the first are already showing in the results. Progress and risk on the SKU transfers to Asia come to leadership in one forum. Future growth can be planned into a simpler network.
How do tariffs change a manufacturing footprint decision?
Duties and the commercial flow to each market sit on top of production cost, so the cheapest place to make a product may not be the cheapest place to supply its market from. Each site's mission here was set on that landed cost, and the move from Europe and the US to Asia was decided on the same basis. The savings plan therefore holds against the markets each product actually serves.
See the capability: Manufacturing strategy and footprint →