Pearson international ltd
Pearson international ltd

Client: Multi-site high volume manufacturer

4-Box 'risk Vs reward' summary for alternative scenarios

Task: objective review of 'risk vs reward' options for the manufacturing sites of the future


Approach: Development of a cost model to reflect all variable and semi-variable costs for the existing manufacturing sites, and to use the model to determine likely payback for a range of site development scenarios (both existing and potential greenfield sites)


Key Steps:

  1. Develop a detailed cost model based on existing cost and management accounting data
  2. Evaluate product costs for all existing products based on current operational performance
  3. Adjust the model to reflect imminent improvements when CapEx / process re-designs are fully implemented
  4. Incorporate semi-variable costs (e.g. administrative and support labour, and directly attributable tooling costs) as appropriate
  5. Validate cost model to the satisfaction of key stakeholders of existing sites
  6. Use the cost model to develop a variety of scenarios
    • Realignment of existing sites towards specialisation
    • New site in low cost European location
    • New site in China
    • Others...
  7. Summarise and rank the main scenarios competitively against each other – ‘risk’ Vs ‘reward’
  8. Select the preferred options for review with the board


Benefits: Business direction agreed by all stakeholders towards the development of key specialisms by the existing sites in the UK & Europe

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Please contact us on the following phone number with any questions or to make an appointment:


+44 115 9251768

+44 7947 685 439


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