Client:
Global medical device manufacturer
Challenge:
Following a merger, a global medical device manufacturer faced the complex task of closing two production facilities. The organization had no prior experience with plant-level capacity planning and was relying on incomplete data and assumptions to set shutdown dates, creating significant risks for customer service, labor planning, and inventory management.
The primary challenge was the lack of insight into production and capacity needs. This resulted in shutdown timelines that were based on assumptions, rather than robust data. In addition, there was a lack of established processes for capacity planning at the plant level and limited visibility into production requirements and inventory status.
Strategic Objectives:
The project aimed identify and implement optimal strategies and timelines for plant shutdowns and to deliver several critical objectives:
- Achieve clear visibility into production capacity and requirements.
- Develop accurate, data-driven shutdown timelines for both facilities.
- Minimize business disruption, backorders, and customer service impacts.
- Enable proactive labor and inventory planning.
- Educate internal teams on capacity planning concepts and methodologies.
Approach:
A structured, hands-on approach was implemented to address these challenges, focusing on building foundational tools and processes and equipping the internal team with new skills.
Key Steps:
- Built a comprehensive capacity planning model for each plant, allowing weekly analysis of production lines and precise shutdown scheduling.
- Delivered educational sessions to clarify the differences between engineering capacity and operational capacity planning.
- Developed a manual MRP (Material Requirements Planning) system and an Excel- based capacity model for the second facility, where no MRP system existed.
- Designed buffer inventory strategies to bridge the transition between plant closures and new plant validations.
- Conducted scenario analyses to evaluate the impacts of major decisions, such as order acceptance, production timeline extensions, and buffer inventory adjustments.
Assessment Areas:
- Production line capacity and constraints
- Labor requirements and phased layoff timing
- Inventory levels, including identification of obsolete materials
- Customer service risk and backorder potential
Tools/Methodologies:
- Custom capacity planning models (Excel-based)
- Manual MRP system development
- Scenario planning and sensitivity analysis
- Stakeholder education and change management
Deliverables:
- Detailed capacity plans and shutdown schedules
- Risk assessments for backorders and customer service
- Inventory and labor transition plans
- Scenario analysis reports for executive decision-making
Conclusion and Results:
This engagement enabled the manufacturer to make informed, data-driven decisions and substantially reduce operational risk. For the first plant, the shutdown was delayed several months to more closely match the projected optimal window and prevent significant backorders and supply disruption. Key production lines were strategically extended, ensuring labor retention and customer service continuity. For the second plant, the team gained visibility into over one million dollars in obsolete raw materials and adjusted timelines to avoid premature shutdown, with decisions now being made months in advance rather than weeks. Internal teams are now actively engaged with planning tools and methodologies, demonstrating a lasting improvement in operational discipline and risk management.
“I don’t know how we could have done this without [Waypost]. Thank you!”
