Tires - Manufacturing and operating model

For a tire manufacturer – review of the operating model and subcontracting/manufacturing decision making
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The client and context:

·      The client was a leading tire manufacturer. They were developing a range of budget tires across their Eastern European markets.

·      They were developing their operational model for this new production on the back of their existing standard-range tire production.

The challenges:

·      The company had to significantly modify their operating model to accommodate for the launch of their new products.

What we Did:

·      Creation of a full benchmark analysis of the mutualised warehousing practices within the industry. This involved a thorough desk analysis as well as expert interviews and site visits.

·      Review of the as-is processes and the required changed to incorporate the new products.

·      Identification and approach of potential sub-contractors (in an anonymised manner).

·      Definition of the target processes for the budget tires, involving part of the production to be outsourced, and the manufacturing processes to be streamlined for the internalised part of the production.

What we achieved:

The operating model developed, involving part of the production being internalised and part of the production being externalised, resulted in a 8% cost reduction compared to the as-is process, which contributed to the success of the budget tire range.

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