Location manufacturing North America
The company identified the need to set up a new manufacturing plant for this product type in North America.
Assignment
Our client is one of the leading manufacturers of industrial tooling products. The company faced significant growth in North America for one of their relatively new product groups. As this product was now produced in only one plant which was located in Europe, the company identified the need to set up a new manufacturing plant for this product type in North America.
Project summary
The client company is a leading manufacturer of industrial tools and related consumable products. The company has a global manufacturing sites network with presence in North and South America, China, South-East Asia, as well as across the EMEA region. However, for one of their fast-growing product groups only one manufacturing plant exists (in Europe).
North America (US, Canada) is the main growth market for this product group and therefore the company’s management initiated a project to determine the feasibility of setting up a new manufacturing plant in North America. The scope of the project from a geographical perspective included the United States, Canada and Mexico.
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, who were in parallel also working on the technical feasibility study and overall investment business case.
The steps taken in the location selection process are as follows:
- Kick-off phase: scoping the project and the potential new manufacturing site from a size, labor, expansion and key location requirements perspective.
- Longlist analysis: a longlist of 20 potential manufacturing locations across the three countries in scope (US, Canada, Mexico) was defined based on initial research by BCI. 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 10 locations in 2 countries for further research. Critical factors in the analysis were e.g. availability of relevant talent, proximity to specific suppliers and also the security risk and quality of life in each location as the company intended to have a significant number of highly qualified expats work in the plant.
- Shortlist analysis: the 10 locations on the shortlist were analyzed based on a detailed set of Cost, Quality of the Business Environment and Risk factors. We conducted in-depth desk research on each of the locations, using our own databases, public sources, information from economic development agencies in the States/Provinces, counties and metro areas in scope, recruitment firms, real estate brokers, etc. The result of this detailed analysis was the selection of the top-3 locations for fieldwork analysis.
- 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 agencies, municipalities, recruiters, similar companies, etc. were held and detailed due diligence was done.
- Final selection: the final selection was made based on this last step and a roadmap for the implementation phase was developed.
Results
The company selected a region and preferred site in Canada and started the implementation planning process.
“The fact-based approach by BCI was what we needed as we had too many different opinions within the company. The analysis led us to the right decision that was accepted by all stakeholders involved”