Saffron Retail Cannot Meet Demand
Consulting
medium45 min0 submissionsMcKinsey
Scenario
Saffron Retail (apparel retail, India) is turning away orders. Demand runs at 1976 units per week, but the plant cannot keep up, and the sales team reports losing deals to competitors on lead time.
Line capacity by stage (units per week):
| Stage | Capacity |
|---|---|
| 1. Intake and preparation | 2679 |
| 2. Primary processing | 1453 |
| 3. Assembly | 2298 |
| 4. Finishing and dispatch | 1450 |
The plant manager has requested ₹153 Cr for new finishing equipment, which would add 695 units per week of finishing capacity. He argues the finishing area "is where the queues are visible".
An external contractor has offered to take overflow work at a 31% cost premium over in-house production, available within six weeks.
Supporting data
options
- finishing capex cr
- 153
- outsourcing lead time weeks
- 6
- outsourcing cost premium pct
- 31
- finishing capacity added units
- 695
demand units per week1976
stage capacity units per week
- assembly
- 2298
- primary processing
- 1453
- finishing and dispatch
- 1450
- intake and preparation
- 2679
Your task
Advise the operations director. Provide:
- Analysis — where is the real constraint, and what is the plant's actual throughput?
- Risks — of each option under consideration.
- Recommendation — what to do, in what order.
Address the plant manager's capex request directly.
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How you'll be graded
100 points, 60% to pass.
- recommendation25
- options evaluation20
- bottleneck analysis30
- problem structuring25
Hint
Reveal suggested structure
- Throughput = the capacity of the slowest stage. Identify it.
- Quantify the gap between demand and that constraint.
- Test each option against the constraint — capacity added anywhere else is wasted.
- Cost per unit of added throughput for each option.
- Recognise the constraint moves once the current one is relieved.