BCG and FlexFactory join forces to drive Production as a Service

Investment and cost risks in production are growing hand-in-hand with an increasing pressure to produce sustainably. Innovative "as a service" models in production minimize the investment risk for producers and are more resource-efficient than conventional approaches. The management consultancy BCG and "as a service" specialist FlexFactory complement their offer on "as a service" business models in production.

Management consultancy Boston Consulting Group (BCG) and "as a service" specialist FlexFactory - a joint venture of MHP, Munich Re and Porsche - are bundling their solutions to help companies make their production more flexible and transform their production-related financing structures. "Shorter product life cycles, new technologies and growing trade barriers in global supply chains increasingly pose a risk to investment decisions of manufacturing companies”, says BCG Senior Partner Dr. Daniel Küpper. "As-a-service models in manufacturing offer companies the opportunity to use a production facility without owning it, thus minimizing investment risk", says Dr. Phillipp Hypko, managing director at FlexFactory. "This is possible through a combination of a highly flexible production, external financing and a sharing business model", underlines Philip Plattmeier, also Managing Director. In these areas, BCG and FlexFactory complement each other and will in the future offer "Production as a Service" business models as one-stop shop: from the development of the production strategy to the implementation, including the facilitation of external

The combination of flexible production system, external financing and sharing concept results in the target picture of "Production as a Service"

Trade wars and the Corona pandemic have exposed the vulnerability of global supply chains. "We see a growing demand for local production and resilient supply chains with low carbon footprints. However, this would lead to many smaller factories, with small batch sizes, many variants and low capacity utilization", says BCG Partner Dr. Kristian Kuhlmann. "Economies of scale need to be considered beyond the boundaries of one's own product. We see in different areas, such as automotive and spare parts production, that all sides benefit when forces are joined and production is shared or at least opened up. Not everyone has to build their own factory anymore", say Philip Plattmeier and Dr. Phillipp Hypko.

In order to set up a production "as a service", a highly flexible production system is needed to produce cost-effectively at small lot sizes. BCG contributes expertise in the development of global production strategies and target picture design for flexible and digital manufacturing. FlexFactory complements this with proven concepts of flexible production that have been successfully tested at Porsche. The production system can be funded by external investors and can be used by several parties in a sharing concept. FlexFactory brings the necessary expertise in "as a service/sharing" business models and financial structuring to this, including the facilitation of external funding. "BCG, with its globally recognized strategy and operations expertise in flexible production and Industry 4.0, is helping us to gain even more traction", summarizes Dr. Phillipp Hypko. "We are very pleased to be able to offer our customers, together with FlexFactory, the financial structuring for "Production as a Service" models through the actual implementation", emphasizes Dr. Kristian Kuhlmann. "Both sides benefit from this complementary offer - to the benefit of our customers."