Hi, how would you struture such cases? / what do you think of this structure?
Question:
- Client has too high maintenance costs in one of his plants. What to do?
- Clients thinks about closing plant X. What is your recommendation?
Possible structure:
Bucket 1: Clarify options (and choose 1 or 2 to evaluate further in bucket 2)
- Internal: do nothing, improve operations (volume, costs), increase prices, close (and shift capacity to other plant)
- External: build new plant, do M&A, outsource capacity
Bucket 2: Evaluate options based on criterias
- Qualitative:
- - Company criterias: new capacity, employees (strikes, layoffs), product quality, invest / deinvest (e.g. sell land, equipment etc.)
- - Market criterias: authorities (tax, competitors), subsidies of government, competitor response
- Quantitative:
- - Delta in yearly profits
- -- Delta in costs: delta in CAPEX, delta in OPEX
- -- Delta in revenues
- - Additional investment / deinvestment (e.g. sell land)