New industrial layout

This case study illustrates the process of optimizing an industrial layout to reduce the significant initial investment required for a new plant and shorten the expected return time. By applying tools such as 3P (Production Preparation Process), it was possible to restructure the plant layout, thereby minimizing waste and ensuring a more competitive and sustainable project for the company.

 The company and its century-long legacy

Present in Portugal since the 1920s, this company has been a part of Portuguese life for over 100 years. With more than 90 brands catering to all stages of life, from childhood to adulthood, it employs over 2,500 people across various locations in the country and operates in two plants.

The company is part of a global leader in the food and beverage industry, with a strong presence in sectors such as infant nutrition, breakfast cereals, coffee and soluble beverages, chocolates, and pet food.

In 2022, it achieved 677 million euros in sales, with 53% of purchases made from national suppliers. Its operational model adds value throughout the production chain, from raw materials to the end consumer. As part of its long-term strategy, the company is also deeply committed to environmental sustainability, demonstrating a strong ESG commitment.

Figure 1  – Company details

The challenge of building a competitive new industrial layout

The development of a new industrial layout proved to be a significant challenge, particularly due to the high investment costs and the extended financial return period. The main limitations identified were:

High investment and excessive return time

The project required an initial investment that was considered excessively high (9 million euros), with a return time that was too lengthy in comparison to the organization’s expectations. This combination led to hesitations about moving forward with the investment.

Design based on traditional supply chain principles

The design of the new layout followed traditional supply chain principles, which contributed to a more costly and less efficient project.

Excessive waste during the design phase

A high level of waste was identified during the design phase, which further increased costs and compromised the project’s efficiency from the outset.

“… a project with potential, but too much competition to be validated.”

The approach to optimizing the new layout design

To overcome the identified challenges, an approach focused on efficiency and waste elimination from the early stages of the project was adopted. The key actions implemented included:

Application of the 3P tool

The 3P (Production Preparation Process) tool was used as the foundation for rethinking the plant layout, enabling a structured and collaborative approach to the development of the new layout.

Increased layout capacity

The layout capacity was increased by 25%, including the expansion of the finished goods (FG) warehouse, which better meets logistical and storage needs.

Reduction of handling in the layout

The new design contributed to a significant reduction in handling within the layout, promoting more direct and efficient flows throughout the facility.

Results achieved with the layout redesign

The redesign of the new layout resulted in a significant improvement in the economic and operational feasibility of the investment:

• Capex reduced by 12%, to 7.9 million euros.
• Investment return time reduced from 7 to 3.5 years.
• Delivery lead time reduced by 10%, now only 2 days.
• Total movement distance reduced by 20%, to 1 km.

Figure 2  – Reduction in lead time and movement distance

• Layout with 25% more capacity, including the expansion of the finished goods warehouse.

Figure 3  – Illustration of the new layout

The application of the 3P tool in the redesign of the layout allowed for overcoming initial challenges related to the high investment and financial return time. Through an optimized layout, it was possible to reduce total costs and increase storage capacity. This strategic approach not only ensured the project’s feasibility but also guaranteed a more sustainable and competitive future for the plant, aligned with the company’s objectives.

We are committed to respecting our clients’ confidentiality. While we have altered or omitted their names, the results are genuine.