
Looxent recently concluded the Wave 3 Value-Up Optimization Project for a client, a specialized construction company with an integrated system encompassing PVC extrusion and installation. Following the foundational Value-Up framework (Wave 1) and the competitiveness enhancement initiatives (Wave 2), the focus of Wave 3 was on Plant Capacity Optimization (PCO) and establishing a Strategic Outsourcing (SO) system to align operational capabilities with market dynamics.
Market Context and Strategic Imperative
The surge in demand within the apartment development market has created a significant opportunity, driven by a 4–5 year cyclical pattern in construction activity. To capitalize on this growth while preparing for future downturns, strategic capacity management has become crucial. Rather than relying solely on CAPEX-heavy investments, the client sought a flexible operational system capable of responding to fluctuating volumes while maximizing profitability.
The client’s dual capabilities in product manufacturing and installation operations through subcontractors presented a unique opportunity to streamline capacity optimization across internal and external operations.
Key Project Deliverables
Plant Capacity Optimization (PCO):
- Definition of Current and Target Capacity: Established clarity on capacity requirements and gained consensus across the organization.
- Operational Efficiency Maximization: Developed and prioritized actionable ideas to optimize capacity utilization.
- Phased CAPEX Strategy: Designed a staged investment plan aligned with projected capacity requirements.
- S&OP Implementation: Built a Sales and Operations Planning system for seamless information flow from order intake to installation.
- Unit Cost Simulation: Conducted simulations to estimate manufacturing unit costs and created a framework for future cost assessments.
Strategic Outsourcing (SO):
- Differentiated Subcontractor Management: Assessed current subcontractor capabilities and developed tailored management strategies.
- Demand-Based Allocation: Created and implemented a monthly site allocation schedule and monitoring system.
- Subcontractor Qualification: Established pre-assessment and operational processes for onboarding new subcontractors.
- Performance Monitoring: Designed performance evaluation criteria and processes for both site-specific and subcontractor-wide metrics.
Results and Impact
The Value-Up Optimization Project resulted in actionable strategies that are already delivering measurable improvements:
- Capacity Growth: The extrusion and assembly capacity is projected to increase by 6–8% through operational efficiencies.
- Informed CAPEX Decisions: A clear roadmap was developed to meet capacity needs for the next 12 months, ensuring alignment with demand fluctuations.
- Cost Reduction: The streamlined operations system is anticipated to reduce manufacturing unit costs by at least 4%.
By leveraging these improvements, the client is well-positioned to meet upcoming demand while maintaining a competitive edge.
Sustained Value Creation
The client plans to sustain and improve the embedded Value-Up systems, with Looxent providing periodic support and monitoring to ensure operational efficiency and strategic alignment. This partnership underscores our commitment to driving long-term value for our clients.
Looxent recently concluded the Wave 3 Value-Up Optimization Project for a client, a specialized construction company with an integrated system encompassing PVC extrusion and installation. Following the foundational Value-Up framework (Wave 1) and the competitiveness enhancement initiatives (Wave 2), the focus of Wave 3 was on Plant Capacity Optimization (PCO) and establishing a Strategic Outsourcing (SO) system to align operational capabilities with market dynamics.
Market Context and Strategic Imperative
The surge in demand within the apartment development market has created a significant opportunity, driven by a 4–5 year cyclical pattern in construction activity. To capitalize on this growth while preparing for future downturns, strategic capacity management has become crucial. Rather than relying solely on CAPEX-heavy investments, the client sought a flexible operational system capable of responding to fluctuating volumes while maximizing profitability.
The client’s dual capabilities in product manufacturing and installation operations through subcontractors presented a unique opportunity to streamline capacity optimization across internal and external operations.
Key Project Deliverables
Plant Capacity Optimization (PCO):
Strategic Outsourcing (SO):
Results and Impact
The Value-Up Optimization Project resulted in actionable strategies that are already delivering measurable improvements:
By leveraging these improvements, the client is well-positioned to meet upcoming demand while maintaining a competitive edge.
Sustained Value Creation
The client plans to sustain and improve the embedded Value-Up systems, with Looxent providing periodic support and monitoring to ensure operational efficiency and strategic alignment. This partnership underscores our commitment to driving long-term value for our clients.