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Successful Plant Relocation #1: Gathering Preliminary Information

September 7, 2020

 by David Collins

Factory workers meeting with management in industrial workshop

This is the 1st part of "9 Steps to Successful Plant Relocation". If you'd like to view other posts in the series, the links are available on the right side menu of this post (desktop) or at the end (mobile).

In order to cover the plant relocation process effectively, we need to pay close attention to the development of the initial plan as it lays the foundation for the remaining steps. However, a plan is only as effective as the data that shapes it. So, to establish an informed plan, it is crucial to gather all relevant information that would impact it. 

How to Gather Preliminary Information for Plant Relocation

Step 1

The Importance of Information Gathering 

Moving factory locations, whether in or out of the country, requires a firm understanding of the new factory’s needs before a plan can be formulated. While this may seem like an obvious prerequisite, a surprising number of factories and companies do not even attempt to thoroughly understand their new factory’s needs or conduct an in-depth analysis of the current issues that can be fixed with a move to the new location. 

Simply reproducing your current set up in a new location only means that you will move existing issues to a new location instead of actually addressing them. Moving without reflecting on the current situation just combines all the old problems with new ones that inevitably arise from the move. The lack of forethought and introspection can lead to delays, cancellations, headaches and almost always incur additional costs for the company. 

To understand the needs of the new factory, company leadership needs to consider the five primary perspectives involved – Manufacturing, Construction, Environmental, Legal, and Human Resources (HR). 

5 Perspectives to Consider in Plant Relocation

By answering the following questions in relation to your operations, leaders are able to understand the full spectrum of the new factory’s requirements and address a number of issues before they materialize. 

#1: The Manufacturing Perspective

  • What are the main issues with the production processes and layouts in your current factory? 
    • Under what conditions can a new location mitigate or eliminate these issues? 
  • How large is your product? Are there heavy/bulky components (e.g. steel coils)?
  • How many loading docks are necessary? 
  • How will your products be transported? By road, ship or plane? Domestically or internationally?
  • What is the potential growth in your industry over the next 10 years? 
  • Is it possible to incorporate additional processes at the new site?

If your site or building has already been selected, a few extra questions to ask are:

  • Does it match the needs of your processes?
  • Does it allow for easy transportation (e.g. it allows trucks to get in and out, and to get to a port easily)?
  • Do the utilities match the needs of the processes?

If your answer to any of the three preceding questions is ‘No’, you will need to consider finding a new location. Even if this causes a delay as you evaluate other options, it is better than moving somewhere inadequate.

#2: The Construction Perspective

  • Will heavy equipment need to be installed? 
  • What are the necessary specifications for the building (e.g. floor thickness, access to an electrical grid, ability to withstand extreme weather)? 
  • Would it be better to build a new facility or adapt an existing building for your manufacturing needs? 
    • What are the costs, tax incentives, and environmental policies surrounding this decision?

#3: The Environmental Perspective

  • Are there any environmental concerns with regard to your industrial processes?
    • What measures will be necessary for environmental protection? 
  • What are the local policies that govern the disposal of hazardous waste, if any?
  • Will this manufacturing project be classified as having a “significant” impact on the environment?

#4. The Legal Perspective

  • Do your products need special licenses granted by the local authorities? 
  • Is the legislative climate in the new location stable? 

#5: The HR Perspective

  • Who are the vital employees?
  • What does the local labor market look like?
  • What employment package do you need to keep top talent? 
  • What is the tradeoff between setting up far away and enjoying lower costs, and staying in the same general area?

Closing thoughts

Before you start your initial planning, you need to have answers to the above questions. Depending on your company’s requirements, the answers to some questions will hold more weight than others. Regardless, each will help you understand what elements are most vital for your new location.

Now that you’ve gathered all the necessary information, you are ready to move on to the next step: Initial planning.

CMC is committed to providing you with the latest quality content and insights, download our FREE guide to plant relocation now.

plant relocation

Topics: Manufacturing Consulting, Manufacturing In China, Plant Relocation

David Collins

David Collins

25+ years manufacturing experience in computer, automotive, aerospace, furniture, and chemical industries.
Founding Partner, China Manufacturing Consultants.
Built and managed several automotive plants in North America.
Successfully turned around Foxconn’s Mexico plant.

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