Analyzing Network Configuration Alternatives

Costs associated with transfer of production from existing sites 

Understand cost position of new market entrants or competitors without historically grown production network 

Assess feasibility of achieving optimum production network (price-tag) 

Identify step-wise optimization options within current site network to 

Assess investment/restructuring options within current network Identify quick wins that can be implemented without major investments 

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Global specialty chemicals companies already operate plants in many different countries and have the expertise to navigate in the respective business environments. Therefore, typically political risks are not incorporated into quantitative models but considered when selecting the potential investment candidate countries. If desired, the model can be extended to include political risk based on an aggregate risk parameter to analyze risk/return profiles for alternative network configurations. For a more detailed discussion of the major elements of political risk see Appendix 3. 

Changes in the competitive landscape might require the analysis of alternative value chain configurations. An initial understanding of viable configuration alternatives can often be gathered by analyzing the production networks of competitors. However, to truly understand the options theoretically available and the ones that could actually be implemented in practice two core analyses were found to be helpful. 

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