Finding a manufacturing facility is not too difficult, but finding the right facility for your particular company needs is quite a different task. Manufacturing is the mainstay for every product-related business.
Securing the best facility for your unique needs is a pivotal decision that can either hamper production or help launch a business to new levels of success. We share some following considerations that can help you make the right manufacturing facility decision.
Absolutely the first and most critically important factor is location, says Thomasnet. Location affects so many facets of the business production this entire article could be focused on it. We mention just a few in this brief article. logistics is a logical, basic concern for any manufacturing location. How a product is accessed and delivered can make a huge impact on everything from marketing, pricing and delivery costs. All of these directly influence the final cost to the consumer. That final cost often affects sales more than any other single factor.
Workforce availability and quality is another key consideration of location. It is always prudent to find a location with a workforce that matches the kind of work the facility utilizes to make its product. For instance, rural areas may not be the best place to locate a technology-producing company. Generally, rural area work forces are more agriculturally inclined. Railway access, interstate and highway infrastructure must also be considered. Delivery of raw materials and end product delivery from the facility need decent delivery routes to and from the new location.
Tax incentives aside, local real estate prices weigh heavily on site selection. Local, state and federal taxation make up a good percentage of these total costs. Employees likewise are attracted or not based on the amenities an area offers. Good schools, entertainment and dining choices matter greatly to prospective workers. These factors directly impact the cost of living for employees.
Cost of living in turn drives worker wages up. Since the cost of labor is roughly equal to the cost of materials and equipment, this is a major part of the total cost of production. Employee insurance and other benefits either attract a quality workforce, or the lack thereof hampers hiring good workers. This is but a brief sampling of the kinds of expenses that go into calculating total costs of facility location. These costs also lend witness to just how important location decisions always are.
Good Factory Match
Factory locations are extremely expensive. This is money the company must spend before it earns any revenue. The last thing a new location needs is an expensive re-construction or extensive remodeling. This cost should be avoided if at all possible.
The best way to avoid these expenses is to find a facility that was built for a production process as similar to your own as possible. Check out the work areas, and how they are laid out. Are they sequentially set up like they need to be to best accommodate how you build what you build?
Look for a location that best matches your production, pickup and delivery process. Doing so can save both move-in time and renovation expenses.
Interview Potential Manufacturers
If you are resourcing the manufacturing for your new location, visit potential candidates and tour their facilities. Look closely at the production technology they already employ. Does it fit, or can it be easily adapted to fit, what you produce?
Is the machinery and technology current, modern, clean and well-kept? Does the prospect show a real interest and excitement about your product? Have they in the past, or are they currently producing either a similar product, or are they using a very similar production method you use to make your product? In short, does the facility closely match what you need it to do for your company?
How is your prospective manufacturer’s industry reputation? Is he an industry scoundrel with multiple code violations, frequent downtime and poor or low production volume? These are standards questions you must get answered before any deal is struck.
Additional Pertinent Information
Ask for current clients and go speak with them. Confirm with the manufacturer details like production times, materials access, and how he prefers to handle payment. This is a terminally important question.
Does he handle the entire production in-house, or does he use other companies for parts of the process? For many, this is a potential deal-breaker. How many different companies do you want handling your production? Each additional company represents potential production complications, and that rarely bodes well.
Use due diligence when either selecting a new production facility for your own company workforce. Be even more demanding if you are seeking to outsource your production to another production facility. Your production is your company’s lifeblood.