Imagine you were a facilities director (if not one already). In Part 1, you faced the decision upper management made to consolidate engineering and manufacturing at a single site, and you were given 12 months to accomplish the task.
A year can be an eternity in many manufacturing companies (two product cycles for this one), but to achieve that schedule would be a more herculean task than senior management would anticipate, so you hired a facilities consultant to help make that deadline.
Notably, there were four things you found to be true about the site: (1) The manufacturing facility was the larger of the operations. (2) It had enough available space on site to construct the expansion for its engineering counterpart. (3) No land purchase was needed in the high demand industrial park in which it resided. (4) It would be easier to move engineering than manufacturing.
As a facilities consultant, when presented with this project opportunity and the proposed more-leisurely-than-usual schedule, I presented you with the following concerns:
Municipal and State Approvals: Land development approvals could require 6-12 months for approvals before any earth was moved. The size of the undertaking would likely trigger a traffic study, which might require offsite improvements (road widening, turn lanes, traffic lights), expenses not included in the proforma for this project.
Disruption: At a minimum, the manufacturing facility would lose building access on the site of the addition. There would also be the disruption of the dust of construction and occasional utility stoppages as systems were switched. Also likely were the renovations needed to the existing building to create circulation with the addition, and to relocate functions along the common wall. The truck access road would need to be relocated to bypass around the addition. This lost productivity and downtime would be a cost added to the proforma.
Employee Retention: While the two facilities were within a 30-minute driving time, engineering employees who lived in the opposite direction would be adding 30 minutes to their commute. Many would decide to look elsewhere. Of course, the ones who would move on would be the ones with the skills most in demand and the ones hardest to replace. Cost to find and train replacements and lost productivity would be another expense.
These are the unintended consequences of what appeared to be the fastest way to accomplish this consolidation.
Although building a new plant elsewhere at a point between the two plants would have eliminated the latter two concerns, it may have amplified the first concern. Another site could have offered zoning, storm water management, utility, and unhappy neighbors that expanding at the current site avoided.
My suggestion of acquiring an existing facility was first met by you with derision. When I likened it to buying a late model used car, you began to nod. Retrofitting a generic facility to meet needs would be less costly, and quicker, than buying new. And given the desirability of the present sites, the proceeds from their sale might just have covered the purchase of the new facility and much of its renovations. Yes, there would be the downtime of the move, to be done in phases, but this would ultimately be less disruptive than manufacturing on an ongoing construction site. Intensive due diligence would be key. Within two weeks you found and began negotiating the acquisition of an acceptable and affordable facility about midway between the two plants.
The schedule was beginning to look more doable. As we planned the phased move, you determined the hardest and most critical function to move was the test facility. Aside from the sensitivity of the equipment to be moved, re-certifying the facility always seemed to require more time than anyone programmed. For testing, and a few other areas, you decided to buy all new equipment and have the vendor handle the installation and certification, as well as selling off your existing equipment once the move was completed. Having a state-of-the-art testing facility helped the manufacturing team more positively embrace the move.
Ultimately, we were able to further reduce the construction duration and meet your goal by focusing on the following construction strategies as part of our Rapid Project Deployment process:
Design-Build Project Delivery: PSU/CII study found it to be at least 33% faster than design-bid-build and 23% faster than CM @ Risk, with a 6% cost reduction and 10% increase in quality.
Collaboration via integrated project teams employing BIM 360 Technology.
Advance ordering of long lead items.
Modular construction and prefabrication of partitions and mechanical-electrical systems.
Just-In-Time delivery on construction site.