8 Mistakes to Avoid During Footprint Optimization Initiatives
The last three years have been a wild rollercoaster ride across global industries. Customer preferences shifted more drastically and more quickly than ever before, with certain markets suddenly experiencing significant demand increases and resulting supply shortages. From masks to flour and toilet paper to microchips, waves of specific consumer demand changes have created cycles of bottlenecks followed by overcapacities, which combined with difficulties in international and domestic shipping, security of supply, labor shortages and cost inflation have compressed margins.
As a result, many companies find themselves with the need to re-prioritize specific products, deal with idle capacity, and in general re-evaluate their cost structure. Manufacturing footprints and underutilized productive assets are an obvious and necessary target to recover and grow margins. However, plant consolidations and other footprint optimization (FO) measures can be challenging and complex for any organization. From managing customer relationships to understanding available capacity, there are a multitude of factors that must be considered to ensure a smooth transition.
Based on A&M’s experience, these are the most important and frequent omissions and mistakes organizations commit in this context:
- Lacking Adequate Project Management Organization (PMO) Structures
- “Forgetting” Your Customers
- Miscalculating Available Capacity
- Neglecting Logistics Cost Impact
- Underestimating the Hiring Effort
- Skimping on Retention
- Getting into Legal and PR trouble
- Validating Issues and Quality Certifications
