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10 Factors to Consider When Selecting Site for a New Manufacturing Facility

Getting it right when it comes to selecting a site for a new manufacturing facility is key to the success and profitability of a business.

Come to think of it, if you get it wrong with selecting a site for your new manufacturing facility, you will struggle to get your raw material to the facility, you will struggle to get your products to the market, and you will also struggle to get labor.

In essence, if you are considering starting a new manufacturing business, then you must make sure you choose the right location to build your manufacturing facility.

Of course, not many entrepreneurs who are interested in starting a manufacturing business know what to look out for when selecting a site for their business.

In case you fall into this category, I want you to know that you are reading the right article. In this article, we will guide you on some of the essential factors you should consider when selecting a site for your new manufacturing facility.

10 Factors to Consider When Selecting a Site for a New Manufacturing Facility

  1. Location and Accessibility

When we talk about location and accessibility for a manufacturing facility, we are talking about proximity to suppliers and customers.

In essence, before settling down to build your new manufacturing facility, you must consider the distance to your suppliers. You must make sure the location is also accessible to your distributors.

Please note that you must make sure the site you choose for your manufacturing facility has good connectivity to major highways, ports, railroads, and airports for efficient distribution.

This is very important because most workers usually consider access to transportation before applying to work for a company.

  1. Workforce Availability

To be honest, if you are able to get a site location that attracts a good number of both skilled and unskilled labor, you will be able to select the best from a labor pool when you are recruiting, and of course, you might also be able to negotiate favorable wages that can fit into your budget.

In essence, before settling for a site location, make sure you assess the availability of skilled and unskilled labor in the area, including the potential to draw from local talent or the need for specialized skills.

  1. Regulatory Environment

In the United States, and of course, in most countries of the world, you cannot just go ahead to build a manufacturing facility in any location of your choice.

You are expected to follow what is known as the zoning code of the state or city. In essence, when selecting a site for your new manufacturing business, you should make sure you consider the regulatory environment of the city or state.

Investigate environmental regulations and any potential impact on manufacturing processes. You should also study and understand local zoning regulations and permit requirements for the kind of manufacturing business you want to start.

  1. Infrastructure

When we talk about infrastructure, we are talking about the availability and reliability of essential utilities such as water, electricity, natural gas, and wastewater treatment.

Apart from that, you must also make sure the site location has access to reliable internet and communication services for data connectivity and operational needs.

  1. Land and Real Estate Market

Before settling for a site location to build your new manufacturing facility, you must make sure you evaluate the cost of land or existing facilities in the location, and you should also confirm their availability, size, and suitability for your manufacturing needs based on the type of manufacturing factory you want to build.

  1. Supply Chain Resilience

When we talk about supply chain resilience, we are talking about the alternatives you have to get your supply chain flowing in case there are emergencies of different capacities.

For that reason, before settling for a site location to build your new manufacturing factory, you must first carry out a risk assessment; you should consider the resilience of your supply chain by evaluating potential risks such as natural disasters, geopolitical issues, or disruptions.

  1. Market Access

In business, proximity to customers is non-negotiable. So, before settling for a site location to build your new manufacturing factory, you should make it a point of duty to choose a location that provides convenient access to your target market or customer base.

You must analyze the feasibility of establishing a distribution network from the chosen site. For example, if you are considering building a factory that manufactures kayaks, and boats, then you should consider a site location that is in and around a riverine area.

It would be a bad business decision to build such a business in a city or town that is landlocked, a city without a river or lake, etc.

  1. Economic Incentives and Competitive Landscape

Before settling for a site location for your new manufacturing factory, make it a point of duty to investigate potential tax breaks, grants, or incentives offered by the local or state government to encourage investment in the city or state where you want to build your new manufacturing factory.

You should also make sure you research the presence of competitors in the area and their potential impact on your market share and workforce recruitment.

  1. Quality of Life

Your employees’ well-being should be paramount, hence you should consider factors that affect the quality of life for your employees, such as local schools, healthcare facilities, and housing options.

Of course, you don’t want to build your manufacturing factory in a community where your workers can hardly access local schools, healthcare facilities, housing options et al.

In conclusion,

Apart from all the factors listed above, it is important that you conduct a comprehensive site selection analysis, including a cost-benefit analysis and risk assessment et al. The data and information you arrive at will help you make an informed decision about the most suitable location for your manufacturing facility. You may also want to work with experts or consultants who are into site selection.