LBS Students consulting Furtenbach, the European chemical giant

Furtenbach is a chemical company and its core business lies in the field of resins and coatings. It is the third largest company in Europe in this industry. Just to provide a snapshot of its relevance, there is at least one element in every vehicle that was manufactured with the help of its final products.

 

Objectives of the project

The company has more than 100 products – each of these are either a type of resin or a type of coating. The specific project goal is to provide a detailed profit-maximizing production plan based on the demand pattern in the previous years. The students are also expected to deliver an interactive decision support system that can be used for production planning in the future. The ultimate question is which alternative production scenarios can be derived, what is the logic behind them and what the corresponding final profits are.

 

Research methods

  • Main objective: To provide and evaluate different production scenarios based on the very comprehensive secondary data that the company provided: past demand data, reactor capacities, raw material costs, production costs, production times, minimum production quantities, product shelf lives, packaging units, sales margins, etc.
  • Additional objectives: 1.Production analysis. 2. Decision support tool. 3. Strategic analysis. 4. Cost structure. 5. Break-even point. 6. Identification of the advantages and drawbacks of the recommended production scenarios. 7. Benchmarks.

KEY FACTS

Project title:

Creating the optimal production plan and a decision support tool for a major European chemical company

Principal investigator:

Dr. Tamás Csermely

Collaborators:

IML 2016 Students – Lea Sapir-Cheny, Mariya Ivanova, Elena Korabová, Tamás Lövei, Ksenia Tsyganova, Igor Tsymbalist, Nastassia Vezhnavets, Sofiya Vints, Avya Witenberg

Client/cooperation partner:

Furtenbach GmbH

Duration:

September 2018 – May 2019

Outcome 

Nine months of working on the project led to the following outcomes:

  1. The students held a formal presentation (approx. 45 minutes) at the company’s premises in Wiener Neustadt with the CEO of Furtenbach (Mr. Günter Eder) and the contact person (Dr. Tamás Csermely) present.
  2. The students answered the detailed enquiries of the CEO of Furtenbach and the contact person in an extensive Q&A session.
  3. The students handed over a 30-page report on the derived results.
  4. The students handed over a 2-page managerial summary explaining their approach and their results in a nutshell.
  5. The students prepared and handed over a detailed decision support tool in Excel for Furtenbach GmbH.
  6. The students prepared several production scenarios (and sub-scenarios) based on key performance indicators such as demand volatility, production time, capacity utilization, shelf life, minimum order quantity, etc.
  7. The students classified each product as make-to-order or as make-to-stock based on the aforementioned criteria and identified the corresponding production quantities and production times.
  8. The students evaluated the scenarios based on their profit data, their capacity utilization, their break-even point, caveats, etc.
  9. The students participated on a 2-hour guided tour at Furtenbach GmbH where they received detailed insight on the company’s day to day operations.

 

The SCP project and the presentation were excellent. Great performance. We will evaluate the results in the management team and implement them step by step. Congratulations to the student team. The theoretical approach and the practical implementation were solved very well.

Günter Eder

CEO, Furtenbach