| New manufacturing
companies with combined office and plant facilities are usually more complex,
since they include senior management, middle management, supervisory personnel,
skilled and semi-skilled workers, and perhaps some unskilled labor.
Important elements in this process are as follows:
OBJECTIVES (might
include the following):
- Select a city where
the company can become a "big fish in a small pond."
- Increase the quality
of labor productivity, stabilize the labor supply, and reduce employee
turnover.
- Improve transportation
options and cost/savings.
- Reduce utility costs.
- Reduce corporate taxes.
- Avoid excessive government
regulations.
- Reduce health care costs.
- Reduce unemployment
compensation costs
- Move closer to primary
markets.
- Move closer to raw materials.
- Improve quality of life.
- Avoid environmental
issues.
- Improve safety and security.
- Substantially reduce
real estate taxes.
- Others.
MARKET STUDY
The primary factors
included in the market study are as follow:
A. Transportation
- Distance to primary
markets
- Highway accessibility
- Shipping costs
- Timing to markets
- Accessibility to major
airport(s)
- Railroad service
B. Raw Materials
- Material availability
- Proximity to raw materials
- Freight savings
- Distance/timing
- Location's cost/benefit
relationships
- Supplier proximity
C. Product
Needs
- Proximity to major markets
- Marketing locational
requirements (if any)
- Supplier proximity for
service
D. Personnel
- Labor availability
- Labor costs
- Labor skills level
- Labor turnover
- Labor productivity
- Earnings comparison
- Health costs
- Other fringe costs
- Unemployment compensation
costs
- Training programs
- Day care availability
- Union profile
E. Utilities
- Energy availability
and costs
- Trend in utility rates
charged
- Any special sewer or
water requirements
F. Quality
of Life
- Weather
- Housing availability
and costs
- School quality
- Safety and security
- Recreational facilities
- Cultural facilities
- Higher education
G. Environmental
Considerations
- EPA requirements
- Company's needs
- Special permits
H. Governmental Services
- Level of service currently
provided
- Fire and police protection
- Local taxes
- Industrial waste
- Community interest and
cooperation
I. Special
Considerations
- Economic development
incentives
- Tax exemptions
- Local incentives
- Low cost financing
- Infrastructure cost
assistance
- Free land
- Employee training
J. Others
K. Computer
Analysis of Data
- Comparison of alternatives
- Model simulation of
each alternative city
- Computer analysis of
hard number factors
- Ratings of subjective
data
- Identification of priority
ranking
L. Site Selection
Alternatives
- City selection
- Site alternatives
- Topographic survey
- Geological report, including
soil tests
- Utility locations
- Water and sewer requirements
- Telephone, data, and
communications links
- Land cost analysis
- Preliminary building
costs
- Site improvement costs
- Financial analysis
- Site selection
- Site appraisal
- Negotiation
- Acquisition of site
M. Project
Financing
- Method of financing
- Governmental assistance
- Identification of lender
- Negotiating interest
rate and terms
- Leaseback alternatives
- Construction loan
- Permanent financing
- Opening the loan
N. Development
- Final plans
- Construction bids
- Contractor selection
- Permits and approvals
- Construction
- Move planning
- Final punch list completion
- Occupancy
There are many
variations to the above depending upon individual needs, requirements,
conditions, and other factors that must be reiterated and analyzed in order
to identify potential locations and select the best locational opportunity.
Nevertheless, through prudent and objective evaluation of the conditions
that are necessary for a particular business, not only can relocation be
a smooth experience, but it can also be a rewarding one.
|
