Network optimization in Western Europe: why site closures are back on the strategic agenda
- 6 hours ago
- 5 min read
Over the past two years, plant and site closures have become a recurring feature of the industrial landscape in Western Europe. Very recently, Pon.Bike announced it would close its Cannondale factory in Almelo, the Netherlands, by the end of 2027, while end of June 2026 also marked the closure of the Vredestein factory in Enschede, also in the Netherlands. Larger FMCG companies, such as Unilever and Procter & Gamble, have streamlined their manufacturing and distribution footprints in recent years. Also outside FMCG, retailers like Amazon and Carrefour have optimized their logistics networks through site closures and consolidation.
Industry bodies also point to an accelerating pace of closures across Europe since 2022, including in other sectors such as petrochemicals, highlighting increasing structural pressure on competitiveness. Across sectors, the underlying drivers are similar: changing consumer preferences, high energy and labour costs, global overcapacity, import pressure, and the need to simplify or rebalance production networks. In the case of Vredestein, all of the above have been mentioned as the rationale for the closure, while for the announced Cannondale closure, the overcapacity in Pon.Bike’s manufacturing network seems to be the main rationale. In that context, network optimization is increasingly viewed not as a short-term cost exercise, but as a strategic response to changing market realities.
The strategic rationale behind network optimization
Today’s business environment is defined by volatility. Companies, and particularly production companies, face mounting challenges: high running costs, deferred maintenance and structural margin erosion. Labour shortages and rising wages accelerate automation, while mergers and acquisitions demand the unlocking of synergies across logistics and manufacturing networks.
Add to this the rapid shift from offline to online channels and the impact of geopolitical factors (tariffs, wars, and energy price shocks because of blockages of key sea routes such as the Suez Canal and the Strait of Hormuz) and it becomes clear why strategic footprint reviews are now at the top of the C-suite agenda. Network optimization is no longer about incremental efficiency gains or cutting cuts. It is about building resilience, agility and sustainability into the very fabric of operations.
From strategy to execution: site closures
In the last ten years, we have been involved in dozens of factory and DC closures in the Netherlands, our home country, and in other European countries as management consultants. While site closures impacting employees are never a pleasure, we do see clear commonalities with the most effective ones, which are valid within all European countries.
Effective network optimization usually starts with a clear strategic rationale supported by data. Organizations first need to understand how their footprint performs under different scenarios, whether the pressure comes from demand shifts, input cost inflation, changing service requirements or post-merger overlap. Scenario modelling and digital supply chain twin techniques can help quantify trade-offs between cost, service, risk and capacity, turning a broad ambition into a decision-ready business case. In the announcement of the Danone factory closure in Ochsenfurt, Germany, in 2025, it was explicitly stated that volumes and costs had been analysed over several years, and that the closure was the last remaining option for Danone.
Confidentiality as a critical element
Once a strategy is set, success depends on disciplined preparation and strong governance. A critical element is confidentiality: when poorly managed, it increases the risk of leaks, fuels unrest and resistance, and can escalate into industrial action. Combined with weak or poorly executed communication, this quickly erodes trust, allows narratives to get out of control, and can result in significant reputational damage. The worst example of such a leakage happened to Cadbury when it planned to close its factory in New Zealand. Cadbury faced years of lingering bad press and consumer resentment, and lost sales in the region.
Finally, execution must be precise and human-centric. Site closures and restructurings affect employees and communities profoundly. Transparent communication, support for affected staff and careful planning of the social process are not only ethical imperatives, but are also vital for maintaining morale and business continuity. From IT system shutdowns to asset clearance and land sales, every step must be managed with rigor and empathy. The last thing a company in any closure process needs, is the widespread news that Air France experienced after two senior executives ended up having their shirts ripped off by an angry mob of employees protesting against job cuts.
Best practices for effective network optimization
In practice, site closure and restructuring programmes tend to succeed when a number of execution principles are addressed consistently from the start. The first principle is that high-quality data and predictive modelling are non-negotiable. Incomplete or inconsistent data can derail timelines and undermine credibility. With many of our clients, the decision to close any location is not taken easily. In some cases, it took them more than five years to make such a decision.
Besides high-quality data, cross-functional alignment is key. Network changes such as site closures touch every part of the business (from operations and finance to HR, IT and legal) making early stakeholder engagement essential. For the projects we have been involved in, we always set up a cross-functional team. Even though the process to manage such a project is more difficult, the number of surprises is minimised.
Also, risk management must be embedded throughout, with clear communication protocols and robust confidentiality measures. With one client, we practiced a fake leakage to test the protocol. In addition to the improvements we implemented, the project team also became more aware of the risks.
Finally, we see that the fourth principle of human-centric planning and communication following the announcement ensures that the transition is not only operationally sound, but also socially responsible. Organizing a ‘Job Day’ where neighbouring companies can share their vacancies is not only a fruitful way to help employees find a new job, but also shows that you care about them.
Common pitfalls to avoid
Despite the strategic importance of these initiatives, many organizations stumble. Common pitfalls include underestimating the complexity of execution, neglecting stakeholder engagement and failing to invest in data integrity. Others rush the process, focusing narrowly on cost-cutting without considering resilience or future growth. These missteps can lead to service disruptions, employee unrest and reputational damage: outcomes that negate the very benefits optimization seeks to deliver. Experience shows that such negative impacts often have severe consequences to the actual business case of network optimization.
Building for the future
Network optimization is about more than closing sites or trimming costs. At its best, it is a disciplined way to align an operating footprint with changing demand, cost realities and long-term strategic priorities. The recent wave of announced closures across Western Europe underlines that this is no longer an exceptional event confined to distressed assets. In many industries, it has become part of a broader reassessment of how and where companies manufacture, store and distribute.
For leadership teams, the implication is clear: footprint decisions require robust analysis, careful sequencing and close attention to both operational continuity and stakeholder impact. Organizations that approach these programs with rigor and realism are better placed to protect competitiveness while managing the social and operational consequences responsibly.
Curious about network optimization? Get in touch.
Cazijn Langeler
Managing Director Retail & Products
+31610545518