Step 2: Developing a Successful Plant Relocation Project Plan

Kenneth Stem

Written by Kenneth Stem

This post is a shortened version of a blog first published on China Manufacturing Consultant’s (CMC) website in December 2019. It covers step 2 in their 9-part series about Plant Relocation. CMC is the sister company of MTG that helps improve factory operations for its clients in China. 

In step 1 of this series, we covered the foundation for successful factory relocation – gathering of preliminary data. By analysing the five most important perspectives – Manufacturing, Construction, Environmental, Legal, and Human Resources (HR) – we are able to determine the most important aspects to consider when developing an initial plan.

Information regarding the size, scope, and potential needs of your new manufacturing facility will help you shape your initial plan. The data collected in the first step of plant relocation will help you and your team get a better understanding of the framework and constraints that you may have to grapple with over the course of the project.

The purpose of an initial plan is to both determine the relocation action plan and anticipate unforeseen circumstances. Having this plan will help you prepare for most of the “known unknowns.” However, this does not mean that there won’t be unforeseen circumstances, because there usually will be.

2 Important Questions for your Facility Relocation Project Plan

Armed with all the preliminary information, you and your team will need to address two big questions in the initial planning process.

Has the site been selected? Does one need to be identified and evaluated? 

It may be surprising, but the team in charge of the relocation may not have much input regarding the site location. If the new site has already been chosen, then you can move onto the next question. However, if it hasn’t been decided yet, you must develop criteria for an acceptable location based on the preliminary data gathered in the previous step.

The process of finding the correct location is often not as straightforward as it might seem. Though you are armed with all the information and understandings from the first step, reality will likely be different, and the value placed on certain considerations may change. For example, you assumed your site needed to be in a certain location, but upon closer inspection the labor rate or tax situation there is not advantageous.

Will it be necessary to construct a new building?

Discussing the characteristics of a new building

Similar to site selection, constructing a new building or using an existing building each present their own advantages and disadvantages.

Using an existing building is usually cheaper and quicker to get operational than a new build. Most countries and regions also have the industrial capacity to alter the building to match your company’s needs. On the other hand, a new building allows your company to design it according to your specific needs. A modular design gives you the flexibility to expand as needed with simple-to-add segments. At CMC, we often advise our clients to use a modular design, especially if they are unsure of their production needs in the future. 

The bottom line

When developing your initial plan for plant relocation, you should be both careful and thorough. While most companies only think about their old location and replicating it at the new site, moving is actually a great opportunity to make changes that improve your layout while reducing costs.

For more lean manufacturing tips, please visit the China Manufacturing Consultants blog.

If you are thinking about moving your manufacturing facilities and would like to talk through these questions, please contact us.

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