Is AI the Site Selection Tool of the Future?

Site Selection Group, a full-service location advisory, economic incentives and real estate services firm, is typically on the journey with our manufacturing clients from the time they begin a site search through construction and the start of operations (and in many instances much longer due to our economic incentive compliance service offering).

Through our engagements with companies in a wide range of industries, we see more and more of them looking to dip their toe in the water of incorporating AI into their operations. Like our clients, Site Selection Group has even started to incorporate AI in small part to automate and streamline processes behind the site selection search protocol. But more broadly, understanding that an ultimate site selection decision can be paramount to the success of a project, we put AI to the test to see if it could solve many of the bigger location challenges and decisions companies are facing across the country.

Starting with a simple question…

ChatGPT’s Response:

• Location and Logistics: Proximity to suppliers, customers and transportation networks to minimize costs and improve efficiency
• Cost Factors: Real estate, labor, utilities and taxation costs to ensure financial viability
• Workforce Availability: Access to a skilled labor pool and local training facilities to meet staffing needs
• Infrastructure: Reliable utility infrastructure (electricity, water, internet) and robust transportation infrastructure (roads, rail, ports)
• Regulatory Environment and Incentives: Favorable local and state regulations, as well as potential government incentives, grants and tax breaks to support the operation

Well, ChatGPT passed the basic test — a laundry list of typical factors to consider. So, where do we start and how do we begin narrowing down the process?

We asked ChatGPT…

ChatGPT’s Response:

1. Location
2. Costs
3. Infrastructure
4. Workforce
5. Supply Chain
6. Market Access
7. Expansion Potential
8. Environmental Impact
9. Technology and Innovation
10. Quality of Life

While all of the criteria listed by ChatGPT are important (except “location,” which is a bit broad), there is no one-size-fits-all approach to site selection. For example, a geographically constrained project (due to sensitivities to inbound/outbound materials) might need to begin its site selection search with supply chain considerations. Or an advanced project may need to consider “technology and innovation” first and foremost to locate near a highly skilled workforce. In short, this list is pretty generic.

So maybe you can identify a “starting point” for the site selection process with the help of a tool like ChatGPT, but how do you actually find a site? Now, and more than ever, we see technical site and utility considerations drive projects from the onset. Given the constraint of conceivable options, we wanted to know how ChatGPT would suggest finding up-to-date and accurate information about brownfield and greenfield site options across the U.S.

So, we asked…

ChatGPT’s Response:

1. Commercial Real Estate Platforms
2. Economic Development Agencies
3. Industrial Real Estate Brokers
4. Online Databases and Mapping Tools
5. Government and Environmental Agencies
6. Industry Associations and Trade Organizations
7. Local Chambers of Commerce
8. Site Selection Consultants
9. Direct Contact with Property Owners and Developers

While ChatGPT is comprehensive in identifying site identification resources, it does not offer a clear process to ensure all conceivable site options are identified. Once again, it’s a good jumping-off point but does little to assist in tangible and specific site selection analyses that are critical downstream, especially for highly specialized projects. In addition, company confidentiality should be considered throughout the early stages of site selection, so it’s essential to craft a strategy to leverage these resources that protect company identity.

In a rapidly evolving business climate, staying on top of future considerations impacting site selection is critical, even before they happen. By anticipating future trends, site selection risks can be mitigated or even avoided. So, is ChatGPT the Magic 8 Ball of the future?

We asked…

ChatGPT’s Response:

1. Sustainability and Environmental Considerations
   1. Green Building Practices
   2. Environmental Regulations
2. Technological Advancements
   1. Industry 4.0
   2. Smart Manufacturing
3. Remote Work and Workforce Trends
   1. Hybrid Work Models
   2. Labor Market Changes
4. Supply Chain Resilience
   1. Nearshoring and Reshoring
   2. Proximity to Suppliers and Customers
5. Government Policies and Incentives
   1. Economic Incentives
   2. Regulatory Environment
6. Infrastructure and Logistics
   1. Transportation Networks
   2. Utility Infrastructure
7. Quality of Life and Community Engagement
   1. Employee Well-being
   2. Community Support
8. Cost Considerations
   1. Rising Costs
   2. Total Cost of Ownership
9. Global Economic Trends
   1. Economic Stability
   2. Geopolitical Factors
10. Health and Safety Considerations
    1. Pandemic Preparedness
    2. Health Infrastructure

Again, the response is a useful but very high-level summary of considerations. ChatGPT’s response shows both internal and external trends play a large role in the future of site selection. While internal future threats may be easier to anticipate, external forces can be more of a blind spot for companies. Assessing the impact of future threats can be intimidating and challenging, especially for a company making a site selection decision for the first time.

So, is ChatGPT the tool of the future for site selection?

We admit this exercise and blog are a bit tongue-in-cheek, and we don’t believe AI will answer every site selection question. While ChatGPT did a good job listing some key considerations and criteria, site selection is an ever-changing space requiring resources from many various disciplines.

From establishing key criteria, creating a top-down framework to ensure you are considering all conceivable technical site options across North America, and drafting an evaluation methodology, all of which while maintaining a timeline, the site selection process can be a lot to wrap your arms around.

The complexity and breadth of site selection factors underscore the importance of enlisting the help of an expert. An experienced location consultant like Site Selection Group can help companies reduce risk, conduct parallel processes, adhere to timelines, reduce costs and ensure all critical factors are considered throughout the site selection process.