Change is happening everywhere; from global market trends, local customer needs, price of energy, water, raw material and other resources to legislation, risk matters and local matters at the production sites.
For a global company with production sites in different parts of the world also comes the need to decide how and where to produce their mix of products most cost efficiently. And the more complex and extensive production the more difficult it is to be prepared to act quickly and flexibly. With increasing demand for efficiency and cost reductions it is now more important than ever to optimize the utilization of company assets, such as land, factories and facilities. At the same time companies need to prepare for future changes in demand and legislation.
This calls for a business process that identifies, analyses and evaluates all potential future scenarios, a true Site Master plan.
Field-proven approach to Industrial Site Master Plan studies
Each production facility is different and unique however the site master plan (SMP) study should follow a structured four-step approach:
- A SMP study always starts with a workshop with the client´s management team to jointly develop the criteria for the site and define the possible scenarios, in their particular industry.
- The second step is about gap analysis, e.g. assessing production capacities and identifying limitations, auditing and analysing all resource flows at the plant as well as defining opportunities for improvement.
- In the third step, scenarios that were defined in the workshop are analysed, in close cooperation with the client management team.
- Finally the SMP report and the Capital Investment Strategy are prepared covering the results of the scenarios and the recommendations
How to deal with plant and production changes
McNeil is part of the global health care manufacturing company Johnson & Johnson. Their Helsingborg site in Sweden is the global centre for production of Nicorette, the smoking cessation product. Also, this site is the J&J global centre for Digestive Health and for Cough and Cold. In order to prepare for new products and higher production volumes at the site, McNeil required a complete SMP study. An added complexity was that there is no possibility to extend the production buildings because of their location. Three future scenarios were analysed and for each the consequences when it comes to industrial processes, buildings, logistics, personnel, production costs, environment and risks were identified. As always there was a close cooperation with the McNeil Management team with frequent workshops to present and decide on the different scenarios. Apart from the SMP study a Capital investment plan for 7 years was prepared. With the result from the SMP-study McNeil could take the decision on which was the most cost efficient way to carry out the changes in the production.
GE Healthcare is another excellent case of SMP’s strategic usefulness. At the GE Healthcare site in Uppsala chromatography resins are produced, resins that are used in the purification of 90 % of all FDA approved biopharmaceuticals. The Uppsala site was trying to cope with a mix of changes, e.g. increased production volumes, new products and moving some products from one production site to another. Relying on close collaboration with the client, the SMP study proposed plans for a 5 years and a 10 years period, where considerable focus was put on the many production processes of the site.
Making well-informed and forward-thinking decisions
Site Master Planning studies can help shed a new light on a company’s direction, especially in the context of rapidly changing conditions and fierce competition. By carefully assessing all their options in terms of viability, sustainability and profitability, industry leaders can appreciate the valuable insights resulting from the SMP studies and make the right business decisions.