This week, we’re continuing our series on key factors or our “Must Haves” for selecting a site for new capital investments. We may not have wish lists in the mail to Santa, but we have a few things in mind that we want to make our clients successful. Unlike Cabbage Patch Dolls or Tickle-Me-Elmo, these factors will stand the test of time and lead to long-term success for your company at their new location.
The long-term impacts of site selection decisions show up in costs, quality, and competitiveness. Each project is unique with a multitude of site selection criteria including the type of sector, location of suppliers and customers as well as workforce availability.
All projects are different, but they tend to share key requirements that affect the site location decision:
1. Available Site or Building
2. Logistics
3. Utilities
4. Workforce Availability
5. The Financial Case
6. The “Feeling”
Corporations get one shot at selecting a successful site for a new site location. If the site doesn’t work, it’s not easy or economical to pull up stakes and move. Each project is unique with a multitude of site selection criteria, but they tend to share key requirements that affect the site location decisions.
The second key factor we are discussing in this series is site logistics.
Site logistics are important from two perspectives- the methods of transport available for in-bound raw materials from suppliers and outbound finished products to customers/markets.
For manufacturing, supply chains can be quite complex stretching across continents and various modes of transportation. Auto assembly, for example, typically requires hundreds of suppliers per vehicle manufactured; often suppliers are sourced globally but with many located proximate to assembly facilities so supplies can arrive in a just-in-time fashion.
In addition to supplier logistics, the location of customers and methods of transportation available to reach customers are important cost, timing, and risk factors. Continuing with the example of a vehicle assembly plant, locating in the wrong place from a product distribution perspective will cause pain for the lifetime of the site.
Imagine manufacturing 500,000 vehicles a year and paying an extra $10 per vehicle in customer delivery costs because of poor transportation logistics. That’s $5 million per year, every year, plus inflation. Locating in the wrong place, even slightly off, can be brutal to distribution…forever!
Working with a skilled site selection firm all but guarantees smooth inbound materials and outbound distribution. We ensure our clients see their project needs from all angles for sustainable success.
Strategic Development Group
Our experienced team is focused on finding your project the best site for long-term success. We take a holistic approach and have the expertise to negotiate and navigate the intricacies of your unique company and needs.
Founded in 1999, SDG is a highly specialized site selection consulting firm. We focus on identifying optimum locations promptly, maximizing the value of incentives, and minimizing risk for corporations from across the globe. SDG has managed projects with capital investment from $15 million to over $1 billion for companies in a wide range of industries including automotive, chemical, steel, and life science.
We would love to hear your thoughts on this article or discuss how we can help you achieve your company or community’s goals for long-term success. Contact us!
