Operational footprint

January 2012
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Operational footprint

At a glance

Companies that have then taken the step to “rationalize” their operational footprints have managed to rein in excessive costs, but frequently have ended up unable to adapt quickly to changes in the business landscape. The existing operational footprint makes it difficult to respond in ways that will benefit the bottom line. As the business world becomes more interconnected, companies with intelligent and resilient operational footprint will be able to effectively compete.

For many multinational companies, various unpredictable, large-scale events have wreaked havoc with operations, disrupting supply chains and cutting into profits. At the same time, emerging markets present enormous opportunities for growth. All too often, the existing operational footprint makes it difficult to respond in ways that will benefit the bottom line. As the business world becomes more interconnected, companies with intelligent and resilient operational footprint will be able to effectively compete. For this reason, management should treat its network of facilities and sites—including the entire supply chain, third-parties and suppliers—as a capability, rather than a liability. Our maturity model illustrates a systematic approach for tackling this problem. By establishing a formal review process to assess the operational footprint at periodic intervals and as part of the long-range strategic planning process, multi-site corporations can gain a substantial competitive edge—with more streamlined cost structures, more efficient supply chain processes, more shock-proof networks, and a range of other benefits.