Manufacturing

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“In 2012, I Resolve To…”

9 Jan, 2012

By: Didi Caldwell,John F. Sisson
8 New Year’s Resolutions for Successful Siting Decisions

As we embark on a new year, organizations around the world are looking to reduce facility costs, mitigate competitive pressures, achieve efficiency targets and leverage talent and labor concentrations with site expansions, consolidations and new locations.

If your organization is considering such a step in 2012, resolve to think smarter… and avoid errors often made by well-meaning corporations. Living by these eight resolutions will help you to maximize your resources, gain competitive advantage, avoid costly mistakes, and identify a fully defensible location decision with confidence and conviction in the New Year… and beyond.

Resolution #1 – I resolve to allow enough time to make a good decision. Take time to get the job done right, not just get it done. Making site decisions to maximize organizational value and profitability is no easy task, and demands a holistic approach to how, why and where assets are deployed. Using a process-oriented approach brings business issues to the forefront, considers operational requirements, identifies efficiencies, and captures a range of value improvement opportunities. In such a process, urgency is good… but haste can be disastrous.

Resolution #2 – I resolve to gain input from all key stakeholders and management – up front. Project alignment incorporating inputs from all key players and stakeholders is essential to gaining consensus on strategic objectives… and ultimately, on the decision. Identifying and incorporating insight and participation by management and core team members is essential. There’s nothing worse than the Operations VP advocating Anaheim and not knowing that the CEO is set on Syracuse.

Resolution #3 – I resolve to accurately assess availability of internal skills and resources. Having internal skills and resources is helpful in the site decision process… and can save you precious time. But if those resources are already working 60 hour weeks and you need to launch the project now, be prepared to go outside to access essential resources – or revise your timetable.

Resolution #4 – I resolve to invest appropriately in making the right decision. When decisions involve capital investment in the millions of dollars, consider securing professional help. Consulting organizations with expertise in facility location, incentives negotiation and real estate – along with proven methodologies – make a good partner, and can help you achieve savings and incentives that far offset your investment in their services.

Resolution #5 – I resolve to look long-term and not be dazzled by short term sales pitches. When a petrochemical manufacturer needed to determine the contribution and potential of more than two dozen facilities around the world, they undertook a Global Site Master Plan Study to compare and rank the sites. The methodical study included detailed location analysis, market assessments, facility contributions and financial pro formas. Don’t be dazzled by short term features and benefits… consider the bigger picture.

Resolution #6 – I resolve to always, always, always have a Plan B. Never assume that just because you have additional acreage somewhere makes it the right place to expand… always hedge your bets. An aerospace organization with available outlying land parcels was set to expand its primary manufacturing facility… until they realized that the coastal location made them vulnerable to complete shutdown should a long-overdue hurricane ever hit the area. They developed Plan B.

Resolution #7 – I resolve to ask, because I may just receive. Mother’s advice that “It never hurts to ask” applies in siting decisions as well. While companies often don't think to seek incentives for smaller expansions or routine capital maintenance, programs frequently are available to help offset those costs. GLS recently proposed a property tax abatement to state, regional and local authorities -- and pleasantly surprised our client with a $600,000 tax abatement.

Resolution #8 – I resolve to assume nothing and to document everything. Outcomes of siting initiatives provide insight that is not only beneficial today, but also assists with making sound future decisions. Roles change and people move on, so be sure to document and archive all of your information… having this information may save significant time in the future if you can avoid going back over issues that were previously resolved.
 

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