The question
The company ran a large network of plants that had grown over time. Leadership needed to know whether that network was still the right one to serve its customers, and what to change.
What everyone assumed
The usual approach is to judge each plant on its own cost and efficiency. But the cost the company pays is not in each plant, it is in the network. An efficient plant far from its customers can cost more than a less efficient one in the right place.
How we solved it
We mapped plants and customers geographically and modeled the cost per ton to reach each one by road, rail and intermodal transport.
We assessed each plant's real capacity, load factors, equipment constraints, terminal logistics and rail access. With that we compared network configurations, balancing each plant's fixed costs against the transport cost of the whole network.
The decision
Leadership received a network reconfiguration recommendation setting which plants serve which markets and where to concentrate production to operate at the lowest total cost.
What applies to other companies
A plant network that grew through acquisitions or in stages is almost never the network one would design today. Each decision made sense at the time, but the whole does not.
The question is not which plant is most efficient, but which network costs least to reach the customer.