Driving market focused resource allocation decisions

The issue

  • A business unit of a global speciality chemicals producer supplying catalysts for industrial applications to multiple markets across all geographies
  • Capacity constrained and being challenged to improve overall business profitability
  • Shared manufacturing assets serving multiple market-facing business units
  • Upcoming regulatory changes required product recipe changes with implications on the existing production process
  • Limited attempts to address supply constraints in an effective manner, with over-stated demand and poor sales & operations planning disciplines


  • Establish & exploit true production capacity of existing assets:
    • Identification and elimination of bottlenecks in supply chain & productions
    • Drive for OEE in existing plant (batch size & sequencing, down time & maintenance etc.)
  • Identify options to reallocate capacity use to more profitable customers
    • Identification of customers & volumes yielding below average contribution allowing for either renegotiation or re-allocation
  • Establish cross-market segment view of long-term demand
    • Markets & functions created fact base & presented in facilitated cross functional sessions to build cross markets view & build priorities for overall business
  • Revamped S&OP including product profitability of prospect pipeline to ensure capacity is utilised for highest financial returns

The results

  • CAPEX spend avoidance of £18m with extrapolated implications to the whole division of c. £100m
  • Improved joint-management understanding on the levers of capacity & profitability, supported by a cross-market decision making governance process to make data based trade-offs
  • Increased production capacity through de-bottlenecking (e.g. batch sequence & maintenance optimisation) with potential resulting contribution uplift of ~ £ 10m p.a.
  • 235 tonnes of unlocked capacity through selective elimination of low margin product variants and Sales re-alignment

An award-winning team


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