Kormac Insights
Footprint Optimization
Adding Capacity While Reducing Costs
Many manufacturers are reducing costs or expanding capacity, but achieving both simultaneously? That calls for a Kormac Surgical Strike! We recently led the planning and execution of a packaging manufacturer’s footprint optimization initiative. After adding international capacity while reducing costs by $3.6 million, the CEO said, “I’ve been through facility rationalizations before. The difference with Kormac was the depth of preparation. Nothing was left to chance, and it showed in the results.”
Seamless moves with no missed customer deliveries … Please slide the image or click the arrows to see Part 1 of how we did it →
Footprint optimization scenario development and planning
Adding multinational production capacity while cutting costs by $3.6 million requires a rigorous plan. A consumer packaging leader recently engaged Kormac to lead the planning and execution of their North American footprint optimization initiative.
The Kormac team began by:
- Modeling detailed scenarios for numerous footprint optimization options, including customer technical requirements, expected efficiency gains, production disruption potential, and capital expenditures
- Evaluating customer re-qualification, lead-time reduction, equipment-move risk, and plant layout requirements for each scenario
- Designing a facility plan that added East Coast and Mexican capacity while reducing costs by $3.6 million
- Planning facility equipment transfers (press, die cutter, gluer, etc.) along with staffing and training
- Calculating detailed capital budgets and anticipated savings across labor, overhead, freight, supplies, and warehousing
- Developing comprehensive move plans ensuring customer continuity and regulatory compliance
- Designing the process for customer re-qualification for new machinery and existing machinery in new locations
After adding international capacity while reducing costs by $3.6 million, the CEO said, “I’ve been through facility rationalizations before. The difference with Kormac was the depth of preparation. Nothing was left to chance, and it showed in the results.”