Is It Time to Relocate Your Manufacturing Facility?
As your company’s clients, processes, capacity and capabilities fluctuate and evolve over the years, the plant you occupy may no longer be the most ideally suited for your current manufacturing needs.
But how does the savvy business owner assess if it is indeed time to relocate their manufacturing facility? Knowing when to move, as well as where and how to relocate, can be a complicated and daunting decision making process.
As Southwest Michigan’s leader in industrial plant relocation, we understand the critical elements that must be looked at in assessing a potential manufacturing relocation. We help our clients determine if (and when) relocation is optimal by considering a wide array of factors including their business goals, current capacity, potential capacity with improvements, expected demand, and projected growth.
Then, like any important business decision, we boil it down to the bottom line. We calculate the ROI (Total Saving / Total Cost) of staying and improving, compared to relocating. Next we calculate the break-even period (how long it will take to pay for itself) if you relocate.
The end result is a clear financial picture of if and when it makes sense for a manufacturing facility to incur the expense and temporary inconvenience of a major relocation.
Total Cost of Manufacturing Facility Relocation
Of course your real estate investment is one of the biggest costs of relocation. Comparing greenfield (with no building) and brownfield (with existing facility) properties is a starting point. Depending on your facility’s dimension and dock requirements, building a new plant may be lower or higher in cost than retrofitting an old one. We also examine the possibility of renting versus buying a new location.
However, real estate costs are just the tip of the iceberg when determining ROI. Utility usage can account for one of the biggest line items in your budget, and energy costs can vary greatly. Additionally, in many facilities up to 30 percent of energy is wasted. So assessing your new plant’s projected utility usage and energy efficiency is paramount.
Other costs to be evaluated include everything from property taxes and insurance costs to the transportation costs that are related to the proximity of your raw materials, customers, and distribution centers.
Total Return on Manufacturing Facility Relocation Investment
A new facility also offers many excellent opportunities for a high return on a relocation investment. Manufacturers can find new opportunities for making their production processes even leaner than they were before. For example, a new, improved, well thought-out floorplan can enhance efficiencies over older facilities that grew haphazardly.
Labor savings can also be realized with new equipment or improved automation that reduces operator hours. And while key management and skilled laborers will likely relocate with you, a move may mean savings in terms of a larger, more skilled or even cheaper available labor force.
Moving closer to your raw material supplier, distributors, and end customers can also contribute to significant returns in reduced transportation costs. Additionally, locating closer to ports, rail hubs or terminals can provide you with more shipping options as well as more competitive pricing.
Manufacturing Facility Relocation Services Southwest Michigan
If you are wondering if it’s time for your manufacturing facility to move, call CMS, Southwest Michigan’s leader in manufacturing plant relocation. We will help you assess and implement the critical elements necessary for a smooth, successful and cost effective transition to a new facility.
We provide state-of-the-art relocation services for manufacurting facilities large and small in Kalamazoo, Battle Creek, Grand Rapids, Lansing and across Southwest Michigan.
Call CMS today for a relocation consultation and see how we can ensure an efficient and well-orchestrated move that minimizes interruptions and gets your organization back to work as quickly as possible.