Location DC industrial company

Identifying the best location for a new consolidated distribution center.

Assignment

Our client, one of the leading manufacturers and trading companies of industrial products and tools applied in e.g. the yacht and shipbuilding industries, had a number of distribution centers across Europe and identified the need to look for the best location for a new consolidated distribution center of approximately 20,000 m2 / 200,000 sqf.

Project summary

The client company is a leading, US-based, manufacturer of industrial products and tools applied in e.g. the shipbuilding industry.

The company has a wide range of products, from high value capital equipment to high volume/low margin spare parts and components.

Consolidation of the existing distribution centers was intended in order to create scale and automate the processes and also to harmonize customer service across the different parts of the business.

Our approach

In this project we followed our proven approach to location and site selection. The project was executed in close cooperation with the company’s project team, including both management and functional experts of different business units involved in the scope of the project.

The steps taken can be summarized as follows:

  1. Kick-off phase: scoping the project and the potential new distribution center from a size, labor, expansion and key location requirements perspective
  2. Longlist analysis: a longlist of 16 potential distribution center location across 8 European countries was defined based on initial research by BCI. This list also included the company’s current DC locations. A desk research analysis was conducted to compare and rank these locations based on a limited set of critical locations factors. The result of this step was a shortlist of 8 locations in 4 countries for further research
  3. Shortlist analysis: the 8 locations on the shortlist were analyzed based on a detailed set of Cost, Quality of the Business Environment and Risk factors. We conducted detailed desk research on each of the locations, using our own databases, public sources, information from economic development agencies in the countries and regions in scope, recruitment firms, real estate brokers, etc. The result of this detailed analysis was the selection of the top-3 location for fieldwork analysis
  4. Fieldwork: a combined BCI/client team went on visits to the selected three top locations. Actual site options matching the client’s criteria were visited, meetings with economic development 1.     agencies, municipalities, recruiters, similar companies, etc. were held and detailed due diligence was done
  5. Final selection: the final selection was made based on this last step and a roadmap for the implementation phase was developed

Result

The company selected a region and site in The Netherlands for realizing this new distribution center. Incentives opportunities were assessed but real financial incentives were not available. However, agreements were made with the pertinent authorities to facilitate the company in the landing process (licenses, labor market).

“By applying this fact-based approach of BCI we were able to come to a well-based location decision, leaving the emotions some of us had with some of the candidate locations off the table”