When Should Manufacturers Engage in the Site Selection Process?
by Josh Bays, on Sep 18, 2018 2:15:51 PM
The last two manufacturing blogs, What Manufacturers Should Know About the U.S. Industrial Real Estate Market and The ‘Diminishing Time Paradox’ in Manufacturing Site Selection, focused on how manufacturers can manage their speed-to-market concerns during the site selection process. As most production site selection projects are on an expedited schedule, how far in advance of the target operational date should companies commence the process? Although the simple answer is “as early as possible,” the full answer is rather nuanced and requires most to expand their definition of site selection.
Varying definitions of the site selection process
Many companies define site selection as the act associated with the actual selection of physical property. While this is certainly one of the objectives of the overall site selection process, it represents a very narrow portion of the site selection value chain. There are some that will acknowledge that site selection is a little more of an involved process and define it as commencing when a company starts its search for a location.
The truth is, the actual process should start months (sometimes years) earlier before anybody even takes a peak at a map. Site Selection Group believes the site selection process should commence as soon as there is any suspicion a company needs to expand, consolidate or relocate some portion of its manufacturing footprint. And companies should acknowledge that once this need arises, it can take 24-36 months for a project to become operational.
Establishing project specifications early in the process is critical
One of the biggest mistakes manufacturers make early in the site selection process is not correctly establishing their project’s specifications. This mistake often leads to extended project timelines and potentially sacrificing the quality of the ultimate location decision. Since a customized site selection process should be developed around a company’s project, it is critical for specifications like timing, workforce requirements, capital investment needs, facility needs, infrastructure requirements, etc. to be determined well before the actual search takes place.
Often, companies wait for business-specific events to unfold that will help define project specifications, but prematurely rush into the process trying to meet some unrealistic deadline. In this instance, Site Selection Group recommends defining a range of specifications (high, low and realistic) and developing a process around each scenario. After comparing these various scenarios, it will often require running parallel tracks during significant portions of the site selection process, the most notable being searching for an existing building and greenfield simultaneously.
Choosing the right site selection partner
Manufacturers should make sure they choose a site selection partner that is willing to invest the time in the strategy formation phase of the project. An experienced partner will be able to coach the company as to which variance in specifications will have the greatest impact on the site selection approach and plan accordingly. The correct partner will even collaborate with other third parties that are supporting the project. And most importantly, companies should make sure their partner defines the site selection process as something that begins well before the actual search begins.