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Looxent provides clients with practical and implementable solutions, driving fundamental change that leads to significant improvements in business value. Through this approach, Looxent positions itself as the most trusted partner for clients, consistently proving its reliability and commitment.

Energy & InfrastructureCompletion of Wave 3 Value-Up Optimization Project for a Specialized Construction Company


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

  1. 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.
  2. 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.



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LOOXENT

A  21F. Parc.1 Tower2, 108, Yeoui-daero, Yeongdeungpo-gu, Seoul, Korea 07335

T  02-546-8222      F  02-546-8226

E  service@looxent.com 

© 2024 LOOXENT. ALL RIGHTS RESERVED.