The Situation
The client anticipated a critical need for capacity expansion and must justify large and risky investment and determine the optimal capacity expansion strategy.
The Solution
Duff & Phelps professionals designed and implemented a simulation to analyze manufacturing strategies. The outputs characterized demand fulfillment, factory utilization, capacity required to meet desired service levels and sensitivity to key assumptions.
The Result
Our work provided a more credible business case for increased capacity, which was then approved by the Board. Our client has continued to use the model actively and for many years since to evaluate a wide range of manufacturing strategy alternatives.
The Duff & Phelps Difference
Duff & Phelps answered key questions that helped the client make the right business decision, including:
- Which products are most impacted by shortfalls?
- How variable is excess capacity?
- How much capacity will be needed for meeting a demand target with high confidence?
- How and where should capacity be changed to meet targets, or reduce supply uncertainty?
