Strategic decisions require a process that combines the ability to analyze complex variables and evaluate scenarios for data-driven decision-making. With supply chain tradeoffs becoming more interdependent and manufacturing site changes shifting costs, managing capacity through intuition and excel spreadsheets is, simply put, risky.
Because it is critical for sufficient time coverage to plan operational capacity and allow for investments, infrastructure and capacity decisions typically take 18- 36 months.
Capacity planning doesn’t solely affect the traditional metrics, e.g., service levels, inventory, and cost. If done in context and with the right technology, it represents an opportunity to impact gross profit and provides a unique perspective on contribution margin. More broadly, capacity planning directly affects a company’s ability to meet corporate and business unit objectives, such as growth, return on assets, and ability to meet sustainability targets and risk.
Infrastructure Strategy and Capacity Planning analysis identifies the best use of existing and potential capacity when comparing supply/capacity with demand changes across manufacturing and warehousing.
Questions
- River Logic can address these industry questions with industry answers:
- How many manufacturing locations are required? Is it better to off-shore, near-shore or pursue local options? Where should they be located?
- How many manufacturing locations are required? Where should they be located?
- Make versus buy?
- What are the ideal supplier terms?
- How best to adjust capacity and labor requirements seasonally?
- What is the optimal allocation of capital to improve the footprint? Should machines be upgraded or replaced?
- What investments can increase the effective utilization of capacity, e.g., uptime, throughput, investments to reduce cost, greenfield, etc.?
- What is the trade-off between existing and circular economy approaches?
Key Decisions
- Manufacturing Footprint
- Supplier Strategy
- Investment Allocation
- Long-term Capacity
- Optimization
- Greenfield Analysis
Value Identified
- Decreased operating costs
- Increased production capacity
- Increased return on assets costs
The River Logic Difference
At River Logic, we understand the industry. Knowing the market allows us to bring value. River Logic can address these industry questions with industry answers. The foundation of our technology is a Digital Planning Twin™ of your end-to-end business as it exists today — including all financial complexities, constraints, and KPIs. Powered by optimization, you can run unlimited strategic, tactical, and operational scenarios to balance complex trade-offs and maximize the value of your decisions.
River Logic enables connected decision-making across the enterprise, empowering supply chain executives to have a strategic view of the business that extends to the tactical and operational levels of planning.
