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Case Studies

Supply Chain & Operations

Manufacturing footprint optimization for a global automotive tier 1

A global automotive tier 1 client wanted to consolidate and eliminate fixed costs. Applied Value developed a sequenced recommendation for consolidation with yearly cumulative cost savings potential of 20.7 MUSD.
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Situation

A global automotive tier 1 had recently completed the acquisition of several new manufacturing facilities and was seeking to consolidate the new footprint and eliminate fixed costs from the network. Applied Value was asked to assess the strategic and financial implications of consolidating the new footprint as well as recommend an optimal sequencing plan for plant closures.

Approach

Applied Value collected and validated both quantitative and qualitative criteria across the entire network to rank each plant’s long-term viability and alignment with strategic objectives. Then, calculated total fixed cost savings associated with closing a facility plus labor synergy and arbitrage associated with moving production to a new site.

Results

Applied Value developed a full sequenced footprint optimization plan, which resulted in a 17.3 MUSD direct improvement of EBITDA and yearly cumulative cost reduction of 20.7 MUSD.
20.7 MUSD million USD

cost reduction

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