What is the length of pipes in your country?

Case case study Market sizing Pipes
Recent activity on Feb 17, 2018
1 Answer
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Christian asked on Feb 17, 2018
Currently preparing for T1-T2 Interviews.

Hi guys,

I tried to solve this estimation/market sizing case.
I'll show you the though my process but this question is not so easy to answer in my opinion. I would appreciate criticism! :) My country is Germany.


My basic starting points:

  • There are pipes for sewage and water
  • There are pipes for rainwater on houses, to make it easier I will not bother with those
  • Some industries use pipes for transportation of their goods (e.g. oil) but those make up a small part of the whole pipes used and therefore I will not bother about those
  • Calculate pipes for private housing and industrial usage
  • Dont forget the connection inbetween households/industry

There is no point on a calculation based on house, since houses consist of a no. of households. Therefore it's fine to only calculate on households (hh) in the first place.

We want to calculate the m of pipes per hh in Germany and add that with the m industry pipes and add that up with No. of m used for connection hh and industry.

M of pipes per household:

  1. No. of people in Germany * No of People per hh = No of hh in Ger ~81 Mio. : 3People = 27 Mio
  2. No of hh in Ger * m of pipes (water) per hh = m of pipes (water) in germany for all hh 27 Mio. * 10 m = 270 Mio. m
  3. HH consists of sewage and water pipes therefore take times 2: 270 Mio. m * 2 = 540 Mio. m ~ 550 Mio. m
  4. => M of pipes per hh in germany = 550 Mio. m

Calculate m of pipes for Industry:

  • No. of hh that equals a industrial building * m of pipes (water & sewage) per hh = m of pipes for industrial bulding 2,5 * 20m = 50m (2,5 since we only bother on sanitary rooms)
  • No. of hh * relation No. of industrial building to hh = No. of industrial buildings in ger 27 Mio * (1/9) = 3 Mio.
  • => M. of pipes in Industry = 3 Mio. * 50m = 150 Mio. m

M of connections (city, land, industry):

  • Percantage hh in cities * No. of hh * m for connection = 0,7 * 27 Mio. * 5m = 90 Mio. m (in cities we have 2,5 hh per House therefore 5 m (*2,5 = 15m) seems like a good estimation for connection houses
  • Same for Land: 0,3 * 27 Mio. 10 m = 90 Mio. m
  • Industrial: No. of Buildings * m for connection = 3 Mio * 40 m = 120 Mio m.
  • => add up = 300 Mio m.

Therefore we have 1 Billion m of pipes in germany (550+150+300).

I always used easy numbers for example. In your opinion did I simplify the case to much? Do you have a faster / easier way to make a good estimation?
E.g. I did not even bother on m for connection inbetween cities etc.

Thanks a lot
Christian

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Best answer
Andrea
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Content Creator
replied on Feb 17, 2018
Former BCG Principal and decision round interviewer

I think your approach has a sound logic, however I would have clarified the question to begin with, because my interpretation here is all pipes, therefore also big conduits under roadways to transport all the sewage, fresh water, etc. Also telco lines (especially fiber) and electricity are - in part - transported in pipes both within buildings and across cities

Therefore to me the big missing piece would be km of pipes under roads in Germany. Would calculate km of roads in Germany (assume germany is a square with x and y dimensions and streets crossing each dimension at z intervals) and then assume what % of roads have under them pipes and assume how many pipes at any given time (e.g. 2 or 3 or 4 depending wether is just fresh water and grey water or also fiber and electricy) and multiply the three numbers.

Hope this helps,

Andrea

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Christian on Feb 17, 2018
Seems fair. I'll make a suggestion tomorrow. Thank you!

(edited)

Andrea gave the best answer

Andrea

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