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Manufacturing Excellence: Merging and Consolidating Operations

By: C. Richard Panico
Posted: October 14, 2008, from the May 2006 issue of GCI Magazine.

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The objective in this step is to visualize the desired end state, understand gaps or obstacles to getting there, develop consolidation options, and conduct detailed analyses to qualify and quantify the benefits and risks of each option.

Typical activities include: confirming products that will be manufactured and those to be outsourced to contract manufacturers; development and analysis of key manufacturing requirements; identification of plant operating practices, systems and intellectual property to be preserved; establishing operating and support personnel requirements; and developing a retention and displacement strategy.

The insights and conclusions developed in this step will be utilized to create consolidation recommendations. However, project teams can easily get caught up in performing irrelevant analyses and spending time identifying options that do not warrant consideration. Diligent adherence to the project charter and effective stakeholder management will avert this scenario.

Recommendation

The key activity in this step is to evaluate the options previously identified against objective criteria. To derive a recommendation that meets the overall goals of the initiative, it is critical to establish the evaluation criteria carefully. The use of rank prioritization methods and collaborative stakeholder involvement are imperative. Other key activities in this step include completion of the risk and benefits assessment and development of a preliminary implementation strategy, including schedules and budgets.

At this point, you need to trust your data and analysis and ensure that all stakeholders have an understanding and buy-in to the recommended option. This is critical. Project teams must realize that they have to sell their recommendation to sponsors. Having to retreat and re-analyze information is de-motivating and often prohibitive due to time constraints and other project priorities. This can be avoided by being as thorough as possible.

Final Planning and Design

Once approval is received, the necessary planning details can be prepared. A detailed work breakdown structure is a good vehicle to identify lower level, quantifiable tasks. These tasks then are loaded with resource, time and cost estimates. This information then is rolled into a more robust implementation plan and budget that, ultimately, will be reviewed and approved by the sponsor stakeholders.

It is also essential to revisit the risks and benefits preliminarily identified in the previous steps. Risks and benefits must be quantified and validated in conjunction with the implementation plan and budget. Once the detailed implementation plan, budget and risk/benefit assessment have been completed and approved, these documents will serve as a baseline to control activities, track work progress and measure performance.

Implementation

Implementation is where the rubber meets the road. It is the transition from the current state to the recommended consolidation option. However, before beginning, a control structure must be in place to facilitate management of scope, schedule, cost, communications and risks. Establishment of a control structure allows continual assessment of performance to the implementation plan and budget while ensuring effective resource utilization and risk mitigation.