Localization using the PLACE-Model
Demographic changes, shortage of resources, increasing cost and competitive pressures, elevated customer demands and globalization are forcing companies to react to volatility in the marketplace and restructure their production networks. With the PLACE-Model developed at TARGUS we offer you a field tested approach to optimize your localization projects.
The efficient realignment of your products in the network through allocation as well as the relocation of production facilities or entire manufacturing plants stand at the center of Localization. It encompasses plant and product relocation, consolidation as well as Out- and Insourcing of production.
Typical Starting points for Localization Projects
- Which strategic direction is the correct one for the production network in the future?
- Which products should be produced where?
- What roles should the individual sites assume?
- How much capacity should be allotted to the individual locations?
- Which markets should the individual locations serve?
- How can synergy be achieved between the locations?
- How can a location be optimally and efficiently relocated?
Personnel Costs as Main Trigger for Localization
Western European production locations have become increasingly less important in the last decade for the network structure of many internationally active companies. At 71%, personnel costs are the dominant reason for relocating production abroad. Additionally the introduction of minimum wages has further increased the cost pressure on companies. Whereas the outsourcing targets of many companies in recent years were to countries such as Poland, Czechoslovakia or China, a few companies have currently gone a step further. The trend towards Localization shows that production is now being moved from the former target countries to countries with yet more favorable production possibilities such as Romania, the Dominican Republic or Egypt. However, these new production transfers pose great challenges for companies.
The PLACE-Model provides Security for High-Risk Localization Projects
The historical growth of network structures, strategic decisions through Mergers & Acquisitions, or market volatility generates a need to restructure the production network. Decisions regarding site relocation pose huge challenges for companies. They are always risky and can in some cases threaten the very existence of a company. For an unplanned production stoppage can quickly result in rapidly escalating costs. With the PLACE-Model TARGUS has created a means to significantly increase the probability of success of industrial transfers. Actions are taken that:
- create transparency
- find optimal goal achievement
- ensure the on-time implementation of the project and
- enable flexibility
A core element of the model is formed by the detailed, agreed upon quality management approach, consisting of detailed check lists with quality gates, various methodologies from project management as well as field-tested TARGUS-Methods and analytical tools.
For companies that want to look into or begin a production relocation project, our experienced consultants have developed the PLACE-Model. The PLACE-Model provides a method to analyze the individual requirements from allocation analysis through actual production transfer and to minimize the risks of localization through a clearly defined approach.
With the PLACE-Model we offer you a tested implementation approach for your localization projects. We expose risk factors, accompany you in the transfer preparation and implementation and ensure a qualitative, high quality project progression.