In my work, I have the opportunity to travel all over the country and meet with all types of businesses that have recently relocated or expanded. While I always enjoy hearing the success stories and will be forever curious about why a business chooses one location versus another, sometimes we learn more from the failed relocation projects and what companies should have done differently. Here are my top fatal flaws that manufacturers who are relocating or expanding should consider.
Biggest Fatal Flaws in Manufacturing Relocation/Expansion Projects
- Site/Infrastructure Not Ready or Appropriate. I recently saw two companies, from different parts of the country, purchase sites that did not have any access to water/sewer. Another common fatal flaw is ensuring that there is electric and gas access, but not checking with the utility to ensure there is adequate capacity. I’ve seen companies requiring 53’ trucks choose industrial parks with roads that are inadequate for that size rig. Another site had contamination issues that extended the timeline and increased the overall cost of the project. The list goes on.
- Workforce Issues. Walking into a new region and just expecting the workforce to be there is a big fatal flaw. I’ve seen companies that were non-union try to expand to union-heavy locations (and vice-versa), as well as locations with workforces that have pervasive substance abuse issues and the lack of people to fill specific occupations.
- Costs. Companies have to look at all their costs. I recall the story of a company that was relocating to a desert state because the workforce, transportation, incentives, site, etc. all looked good – but then forgot to take into account the air conditioning costs that would be required in this new location. Everyone on the company’s internal site selection team got fired. There was another project where the perfect location had an unwelcome surprise: the city had a hook-up fee of $750,000 to access the city water supply. The lesson here is that costs which may not be “a big deal” in your current location might be a huge deal somewhere else. Always make sure you do complete due diligence on all operating costs before signing on the dotted line.
Note that none of these companies were clients of Ady Advantage or any other site selection firm; these were companies that decided to do it themselves and, as a result, paid the price. If you are considering relocating or expanding, contact Janet Ady at 608.663.9218 for a complimentary consultation to help you achieve a positive outcome.