Capacity and cost modeling

A large agricultural chemical conglomerate was preparing to acquire a site in Northern China. Before proceeding with the transaction, it needed to understand the target’s capacity to manufacture a specific product and estimate unit costs. The deal would be predicated on cost advantages and available capacity. Existing data needed to be collected, verified and combined into a comprehensive manufacturing model, to arrive at final capacity and cost estimates / ranges.

• Led information gathering effort on major production inputs

• Built detailed process maps, detailing process times, raw material inputs, labor, machine and utility usage

• Identified constraints, calculated maximum factory capacity for product in question

• Advised on additional investment, quantifying incremental throughput gains for each

• Estimated per-kilo standard cost of product, including allocation of overhead

IIn short, we built a digital twin of the financial statements in a dynamic model that supported scenario analysis so that global leadership could visualize the operations, quantify the risks and plan for post-merger integration.