Cookie and Privacy Settings

This website uses cookies to enable essential functions like the user login and sessions. We also use cookies and third-party tools to improve your surfing experience on preplounge.com. You can choose to activate only essential cookies or all cookies. You can always change your preference in the cookie and privacy settings. This link can also be found in the footer of the site. If you need more information, please visit our privacy policy.

Data processing in the USA: By clicking on "I accept", you also consent, in accordance with article 49 paragraph 1 sentence 1 lit. GDPR, to your data being processed in the USA (by Google LLC, Facebook Inc., LinkedIn Inc., Stripe, Paypal).

Manage settings individually I accept
expert
Expert with best answer

Vlad

97% Recommendation Rate

404 Meetings

11,342 Q&A Upvotes

USD 239 / Coaching

5

How to structure plant-option case?

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)

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)
5 answers

  • Upvotes
  • Date ascending
  • Date descending
Best Answer
Book a coaching with Vlad

97% Recommendation Rate

404 Meetings

11,342 Q&A Upvotes

USD 239 / Coaching

Hi,

Several areas to consider:

  1. Even before structuring the case, you should start with clarifying questions (1. quantifiable objective - what is exactly too high? Why is he thinking about closing? 2. Business model - in this case maintenance ops model and key maintenance processes)
  2. The structure has no diagnostics of the current situation, you are jumping into options directly. Always start with AS IS diagnostics before jumping into options analysis
  3. Currently, you are analyzing the existing options and generating new ideas within the same structure. Again, start with diagnostics and don't come up with the solutions from the beginning

I would be happy to help you with a structure, but coming up with a structure without asking clarifying questions (objective, business model / ops model) first is a bad habit

The overall approach to cost-cutting is the following:

  • Cost composition and the biggest costs
  • Benchmarking of the biggest costs to find the improvement potential
  • Process improvements to meet the benchmarks
  • Costs and benefits of the proposed initiatives

Feel free to book a session with me. I had a dedicated session on cost-cutting / ops cases where we can go further into details

Best

Hi,

Several areas to consider:

  1. Even before structuring the case, you should start with clarifying questions (1. quantifiable objective - what is exactly too high? Why is he thinking about closing? 2. Business model - in this case maintenance ops model and key maintenance processes)
  2. The structure has no diagnostics of the current situation, you are jumping into options directly. Always start with AS IS diagnostics before jumping into options analysis
  3. Currently, you are analyzing the existing options and generating new ideas within the same structure. Again, start with diagnostics and don't come up with the solutions from the beginning

I would be happy to help you with a structure, but coming up with a structure without asking clarifying questions (objective, business model / ops model) first is a bad habit

The overall approach to cost-cutting is the following:

  • Cost composition and the biggest costs
  • Benchmarking of the biggest costs to find the improvement potential
  • Process improvements to meet the benchmarks
  • Costs and benefits of the proposed initiatives

Feel free to book a session with me. I had a dedicated session on cost-cutting / ops cases where we can go further into details

Best

(edited)

Book a coaching with Henning

100% Recommendation Rate

138 Meetings

3,893 Q&A Upvotes

USD 169 / Coaching

I think the structure is great! I'd just have two comments:

  • Before structuring this case, I would ask for the udnerlying data: What leads the client to the conclusion that maintenance costs are two high? Are there internal/external benchmarks? Is there a maintenanc cost development over time, etc? These data points will help you form a working hypothesis before you move into the structure.
  • I would then structure the framework not as Bucket 1 and 2, but as a two step approch that first builds a framework in step one and then uses it in step 2. This will help you separate process from content more clearly.
    • Step 1: Define a short-list of suitable options - columns of your framework
    • Step 2: Evaluate them on a set of criteria (rows of your framework)

I think the structure is great! I'd just have two comments:

  • Before structuring this case, I would ask for the udnerlying data: What leads the client to the conclusion that maintenance costs are two high? Are there internal/external benchmarks? Is there a maintenanc cost development over time, etc? These data points will help you form a working hypothesis before you move into the structure.
  • I would then structure the framework not as Bucket 1 and 2, but as a two step approch that first builds a framework in step one and then uses it in step 2. This will help you separate process from content more clearly.
    • Step 1: Define a short-list of suitable options - columns of your framework
    • Step 2: Evaluate them on a set of criteria (rows of your framework)
Book a coaching with Clara

100% Recommendation Rate

50 Meetings

11,962 Q&A Upvotes

USD 229 / Coaching

Hello!

Overall I agree with how you started the answer thread -sometimes, it´s about not freezing and starting to problem solve with the interviewer, just as you are doing there-.

However, it´s fundamental to ask clarifying quesitons and those needed to understand the underlying causes (e.g., if client will close the plant X, first thing would be to understand why, what are the causes for it, in order to orient the issue tree well as soon as possible).

Hope it helps!

Best,

Clara

Hello!

Overall I agree with how you started the answer thread -sometimes, it´s about not freezing and starting to problem solve with the interviewer, just as you are doing there-.

However, it´s fundamental to ask clarifying quesitons and those needed to understand the underlying causes (e.g., if client will close the plant X, first thing would be to understand why, what are the causes for it, in order to orient the issue tree well as soon as possible).

Hope it helps!

Best,

Clara

Book a coaching with Adi

100% Recommendation Rate

47 Meetings

3,960 Q&A Upvotes

USD 149 / Coaching

Book a coaching with Ian

100% Recommendation Rate

185 Meetings

15,613 Q&A Upvotes

USD 289 / Coaching

Honestly? I don't like either (sorry)

You need to actually structure this as if it were a real-life project. Where would you really look first? What would you actually say to the client? Can you assign bucket 1 to consultant A and bucket 2 to consultant B with a clear objective in mind?

In regards to Bucket #1....why would we build a new plant? This literally has nothing to do with the problem at hand (don't avoid the problem/solution)

In regards to both, implied in every case is root-cause analysis, solutioning, next steps, risks. These cannot be buckets. Of course we need to clarify options and then think of solutions. However, this is not a framework. The framework is HOW you're going to do this.

So, a better framework would be along the lines of:

  1. Breakdown of high maintenance costs through a) competitor benchmarking and b) time-series analysis of costs. Evaluate the highest maintenace costs and determine what can be reduced and by how much
  2. Evaluation of plan financials AFTER maintenance cost reduction: What is the new unit economics of the plant? Does the plant now operate with a positive cashflow? If not, anything we can do? No? Then close. If yes, confirm that this is sustainable.

Honestly? I don't like either (sorry)

You need to actually structure this as if it were a real-life project. Where would you really look first? What would you actually say to the client? Can you assign bucket 1 to consultant A and bucket 2 to consultant B with a clear objective in mind?

In regards to Bucket #1....why would we build a new plant? This literally has nothing to do with the problem at hand (don't avoid the problem/solution)

In regards to both, implied in every case is root-cause analysis, solutioning, next steps, risks. These cannot be buckets. Of course we need to clarify options and then think of solutions. However, this is not a framework. The framework is HOW you're going to do this.

So, a better framework would be along the lines of:

  1. Breakdown of high maintenance costs through a) competitor benchmarking and b) time-series analysis of costs. Evaluate the highest maintenace costs and determine what can be reduced and by how much
  2. Evaluation of plan financials AFTER maintenance cost reduction: What is the new unit economics of the plant? Does the plant now operate with a positive cashflow? If not, anything we can do? No? Then close. If yes, confirm that this is sustainable.

Related case(s)

Oliver Wyman case: Full Electrons Ahead

Solved 96.9k times
Oliver Wyman case: Full Electrons Ahead Your client, large automotive OEM WyCar, has developed its first fully electric vehicle (EV) and introduced it as a pilot on the Austrian market last year. However, sales have been far below the expected numbers. The management has engaged you to support them in understanding the reasons and advise them on how to adjust the product offering.
4.6 5 6425
| Rating: (4.6 / 5.0)

Your client, large automotive OEM WyCar, has developed its first fully electric vehicle (EV) and introduced it as a pilot on the Austrian market last year. However, sales have been far below the expected numbers. The management has engaged you to support them in understanding the reasons and advise ... Open whole case

Roland Berger case: Light on!

Solved 74.2k times
Roland Berger case: Light on! LumCO, a company producing injection-molded components for lighting applications, has operated successfully in its native European market. The company wants to open up one production facility each in China and the United States and establish their own distribution network in both countries to serve as a hub for the entire region. The products LumCO manufactures can be categorized into Specialties, which are designed and produced by LumCO according to customer specifications (e.g. head lamp casing and lenses in vehicles, luminaires for design lighting applications) and Standards, which encompasses an assortment of components for multiple lighting applications for different industries (fixtures, lenses, luminaires). Based on the only slight but stable growth outlook in Europe, LumCO is eager to establish the production sites in China and the U.S. as soon as possible and also to begin to distribute their products directly. As a consultant, you are asked by the board of management to assess this plan considering your knowledge of each region and the lighting market in particular.
4.6 5 14532
| Rating: (4.6 / 5.0)

LumCO, a company producing injection-molded components for lighting applications, has operated successfully in its native European market. The company wants to open up one production facility each in China and the United States and establish their own distribution network in both countries to serve ... Open whole case

DHL Consulting case: Books & Codes

Solved 63.3k times
DHL Consulting case: Books & Codes A friend of yours recently got promoted to the position of director of a university library. Yesterday, your friend received a call from the Ministry of Education, who offered him to be part of a national RFID pilot with his library. As your friend is unsure if he should pursue this option, he asks you for your advice. Your task is to assess the RFID technology for his library. How would you approach such a request?
4.6 5 4886
| Rating: (4.6 / 5.0)

A friend of yours recently got promoted to the position of director of a university library. Yesterday, your friend received a call from the Ministry of Education, who offered him to be part of a national RFID pilot with his library. As your friend is unsure if he should pursue this option, he asks ... Open whole case

zeb case: Quo vadis, customer?

Solved 57.1k times
zeb case: Quo vadis, customer? The bank "His Earlship Charles", a domestic retail and private bank is in a difficult situation. Profits have been declining over the past years due to the ongoing low interest rates set by the central bank. Additionally, the bank is suffering from a decreasing number of customers. The board of directors is worried about digitalization and wondering, whether the bank is adequately prepared for it. Please analyze the situation of the client and develop means to sustainably increase profits. Consider the worries expressed by the board of directors.
4.6 5 4438
| Rating: (4.6 / 5.0)

The bank "His Earlship Charles", a domestic retail and private bank is in a difficult situation. Profits have been declining over the past years due to the ongoing low interest rates set by the central bank. Additionally, the bank is suffering from a decreasing number of customers. The board of dire ... Open whole case

Oliver Wyman case: On the Right Track

Solved 47.2k times
Oliver Wyman case: On the Right Track TrainCo is a manufacturer of rolling stock, or trains, with production sites in three European countries. The company has seen declining profitability over the past years; however, they are currently in a very good position to bid for and win a big contract for regional trains for a Swiss national rail company. They have asked you advise to them on whether they should place a bid for the contract.
4.6 5 4510
| Rating: (4.6 / 5.0)

TrainCo is a manufacturer of rolling stock, or trains, with production sites in three European countries. The company has seen declining profitability over the past years; however, they are currently in a very good position to bid for and win a big contract for regional trains for a Swiss national r ... Open whole case