It’s no secret that site selection for manufacturers is of paramount importance. As my colleague Dave Verner previously discussed, location is everything. Choosing the right site for your manufacturing facility is about proximity to suppliers, distribution routes, utilities, competitors, and a skilled workforce. It’s also essential to find a site and a community that can support your construction schedule and ultimately provide the quality of life that’s appropriate for your employees. To get your facility ready for producing quality products in a timely manner, a lot of things have to go right on the front end, and site selection is a big part of the success formula.
The first U.S. project for a foreign manufacturer is often daunting. Without understanding the site selection process in the United States, many companies end up choosing a sub-par and costly site which also puts their construction schedule behind. Since site selection tends to be among the very first decisions made for a new facility, it’s essential to work with a knowledgeable firm during that process: a group of people who are trusted advisors, helping you navigate the best path.
Let’s consider the plusses and minuses of some of the firms you could work with on site selection:
Real estate firms are a fairly common choice for site selection. They have a lot of properties in their industrial portfolios, and they have plenty of experience with managing programs. They can bring a lot of site options to the table, which is a positive, but they tend to be biased toward their own managed or controlled properties. They often lack the ability to carefully evaluate a site’s infrastructure, utilities, grading and suitability for your specific manufacturing needs. You want engineering guidance in addition to options, but most real estate firms don’t have that necessary engineering horsepower.
In addition to offering a solid network of professional relationships, boutique site selection firms have a substantial amount of site data and demographic data. They can tell you a lot about the local workforce, thereby helping you understand the number and types of employees that might be available for you to hire. But what many companies don’t realize is that these boutique firms often sell their data to local economic development entities, and these entities then make that data available to interested parties in an effort to attract business to their region. What does that mean? If you work with an architecture/engineering (A/E) firm on site selection, the A/E firm can most likely obtain that same important data for free – but also offer an invaluable engineering perspective boutique firms simply can’t provide.
Accounting firms’ core business is to provide accounting advice, but they often get involved with site selection to help secure more accounting business generated by new facilities. They usually focus on the incentives of a site – like tax breaks – rather than suitability. As a result, you could end up with an inadequate site for your needs and be forced to spend extra time and money to prepare it for your facility. In the long run, those incentives are spent making a sub-par site suitable for your facility and instead of reducing your overall facility cost. There is a place in your decision-making process for an accounting firm but it needs to align with their core business – which is accounting, tax advice and the structure of your U.S. entity – not whether a site is suitable for constructing your major capital investment project.
I’ve worked either with or at all three types of the firms I discussed above, so I have firsthand knowledge of the site selection experiences foreign manufacturers usually have with them. Now, as the division vice president for Industrial at an A/E firm, I can attest to the reasons that A/E firms tend to provide the best site selection experience for foreign manufacturers. Here are the top reasons why:
1) Providing a helping hand from the beginning: At GS&P, our Industrial team has worked with many foreign manufacturers who made the decision to locate a facility in the U.S. We know the rules of the game, and we can help clients understand differences between their country and the U.S. as they relate to a huge variety of project elements: construction materials, constructability, the legal system, the HR process, code compliance issues, site certification and more. Our job is to steer you down the right path.
2) Getting ahead of the design process: Since an A/E firm will be the team designing your facility, it makes sense to have them on-board from the beginning, and that includes the site selection process. All decisions leading to the design phase are critical, and any mistakes made can cause project delays, putting it significantly behind schedule, over budget or both. An A/E firm offers a knowledgeable and well-equipped engineering team to evaluate all characteristics of a potential site with the end game – the designed facility – in mind, and anticipate challenges. Will the site require deep foundations? Does it meet requirements for rail connections? What government regulations or environmental considerations need to be considered? Is the site really shovel-ready? An A/E firm provides invaluable guidance to help get the project off to the best start.
3) Resources: One of my favorite things about GS&P is the incredible synergy created when our multiple markets and disciplines come together on a project. Many of the issues associated with the site selection process and facility design involve transportation, architecture, environmental and other sectors. At GS&P, I get to combine my site selection experience with this unique combination of resources to offer our client the most value for their capital investment.