Model production footprint and analyze scenarios to balance existing manufacturing capacity with additional production needs with capacity planning software
Many of the world’s leading companies have found that modeling production footprint, operations, production and manufacturing capacity as part of their end-to-end supply chain design practice can be the key to outperforming the competition. Companies are now able to use capacity modeling tools to manipulate large amounts of data to model, analyze and optimize their end-to-end supply chain operations, from large-scale network optimization all the way to SKU-level inventory optimization and transportation analysis.
Production or manufacturing companies face many capacity-related questions, including “make vs. buy” decisions, where to make products (often referred to as the “off-shore vs. near-shore” or “low-cost vs. local” question), when they will run out of capacity, and where to add additional capacity. In making these fundamental manufacturing production capacity planning decisions, companies often fall into the trap of focusing only on the production costs or investment costs and forget to focus on the entire end-to-end supply chain, which includes many cost factors including transportation, inventory and tax.
Another set of strategic decisions manufacturers need to consider revolves around the production footprint. The “footprint” represents the physical facility and quantity in which each product is manufactured, along with the capacity required to make it happen. Production footprint decisions are best made when considering the end-to-end supply chain, not just local or point-in-time requirements using capacity planning software. Oftentimes demand for products shifts over time to new regions or different quantities, and suppliers and cost structures change as well. As these changes occur, the production footprint should change to keep in-sync.