Fit for Growth

9Footprint OptimizationRethink Your Operations and Overhead Locations

A company's footprint is made up of all the locations where it has manufacturing plants, distribution centers, service points, R&D centers, and administrative and support offices, and it drives a large part of a company's cost structure. Optimizing the footprint involves analyzing and making changes to these locations. Footprint optimization is among the most powerful levers within the Fit for Growth transformation framework, both for reducing costs—by as much as 15 to 20 percent over 12 to 24 months, in our experience—and for providing a solid but flexible foundation for future growth that takes service levels and customer proximity into account.

What Is Footprint Optimization?

Footprint optimization involves systematically analyzing—and improving—how effectively the company's locations work together, how cost-effective they are, how well they support the company's strategy, and how adaptable they are to changing markets and customer requirements. The decisions companies make about their footprint cut across their entire value chain.

In the past, many companies—especially manufacturers—were slow to change their footprints. Many achieved great success with vertically integrated business models that afforded end-to-end control of product quality, and they were able to leverage economies of scale to use all production assets and drive down unit costs. Today, improvements in logistics, digitization, and communications, ...