COMPLETE FACILITY RELOCATION PROJECT CHECKLIST
Relocating or expanding a manufacturing facility is complicated. It’s our hope that the following information helps
you with your project!
However, these initiatives often fall outside the experience and expertise of most manufacturing executives and
management. It often represents a substantial investment with high organizational visibility to the company as well.
Facility relocation is all about planning and precision.
The experts at Campbell Corp. have decades of experience helping clients move and expand their operations.
And we’re here to support you with our comprehensive facility relocation checklist. We could only cram so much
information into this checklist, but it’s a deep well with many complexities. So, reach out to learn more about how
to apply these steps to your project.
- Evaluate the necessity to relocate.
- Develop goals.
- Identify target relocation regions.
- Develop project scope, timelines, and budget.
- Generate a production resource list.
- Benchmark equipment performance.
- Design a new, optimized layout.
- Nail down site planning considerations.
- Secure construction or renovation resources.
- Share relocation plan with stakeholders.
- Formalize your approach to equipment recommissioning.
- Evaluate the Necessity to Relocate in the First Place
Whether expanding your product offerings or gaining market share, a larger facility might not be necessary. The
application of Lean Engineering reduces operational space requirements, while increasing throughput and reducing
lead time.
Often, by applying Lean Manufacturing principles, manufacturers can meet their production goals right where they
are with a drastically reduced investment and schedule.
Generally, the application of Lean can slash a quarter to a third of an operation’s footprint, and we’ve seen this our
clients attain this range.
We’ve also seen increases to capacity by a factor of two or three in the same footprint.
How to Assess Whether You Need to Relocate?
We recommend a few different approaches when considering your options:
Option 1: Take Stock of Operational Activities
Walk your shop floor. Is there Work in Process accumulating before constrained processes?
Informally audit your operators at different periods of the day. Are they actively transforming raw materials
to finished goods? Or are they looking for a tool, sourcing raw materials, seeking clarification, or engaged
in any other non-value-adding activity?
Option 2: Take Stock of Operational Activities
The first step to estimating your operational opportunities in your current facility is to audit your existing
facility to determine how much floor space you need to accommodate Work in Process and aging Raw Materials
and Finished Goods inventories.
Evaluate potential space savings from increasing Inventory Turns. Once parsed of any non-essential inventory,
evaluate the density capacity of your material handling equipment and fixtures.
A good resource can often be your forklift or racking vendor to explore Narrow Aisle and Very Narrow Aisle
forklifts, Automated Storage and Retrieval Systems, and other applications and technologies to reduce the
square footage to store Raw Materials and Finished Goods.
Evaluate your Overall Equipment Effectiveness or OEE. You can get an idea of how you’re OEE by simply walking
your shop floor. Note how many operators are actively transforming raw materials to finished goods.
Do you have equipment or processes with a large amount of Work in Processes in front of it? If your operators
are doing something other than adding value your customers are willing to pay for, you have manufacturing
opportunity by leveraging some simple Lean tools.
- Develop Hard and Soft Relocation Goals
A successful facility layout and relocation initiative includes defining success.
At the onset, define what metrics you want to achieve after reworking your layout or relocating. Examples of these
metrics can include a 50% reduction in material travel, a shortening of Lead Time from 8 weeks to 3, etc.
Keep in mind, a new facility will have soft benefits as well. While soft benefits don’t contribute to shorten the payback
period, many manufacturers identify them nonetheless. These metrics can include Visual Factory elements, the
Customer Experience, employee satisfaction, and many more benefits which are difficult to quantify but can be
important none the less.
Create a checklist to maintain these goals throughout the lifecycle of the project.
- Develop Hard and Soft Relocation Goals
Many manufacturers are simply looking to expand their current facility or relocate within their current region
to reduce relocation costs and maintain their current workforce.
Some manufacturers seek operational, logistical, or fiscal incentives to relocating in a new region or country.
Proximity to vendors and customer bases can reduce the overall cost of transportation. States or counties offering
relatively large monetary and support incentives can sometimes be appealing. However, these areas often have
higher costs of doing business.
Countries with a relatively low cost of entry and labor can seem attractive. But the considerations to relocating
to another country are often complicated and not as straightforward as they might seem on the surface. Risks
include host nation inflation, exchange rate, required employee benefits–including meals and retirement
contributions, unreliable utilities, protection of intellectual property–inflated finished goods inventories, longer
lead times, cultural differences, and increased management oversight.
Engage legal, accounting, HR, and consulting expertise to accurately estimate your start-up budgets and schedule
and realistically estimate your operational expenses while understanding your legal and operational commitments.
- Establish and Manage Your Facility Planning Team
Relocation impacts all aspects of your company: operators, production management, warehousing, sales, EHS, HR,
purchasing, engineering, maintenance, etc.
Involving all stakeholders, and keeping them informed of progress, promotes success. Your team should also include
any required contractors and subcontractors including millwrights, mechanical contractors, and project
management professionals.
- Develop Project Scope, Budget, and Schedule
Whether building a new facility, renovating an existing facility, or simply relaying out existing operations, identify
and communicate what is in scope and what is out.
Is rebuilding aging and tired equipment required to achieve your relocation goals? Investment in new equipment?
It’s at this stage of the project that we often include local architects, engineers, builders, and millwright companies
as well as possible equipment vendors to assist in the realistic preparation of the Project Budget and Scope.
- Generate Production Resource List
Equipment and resource management is key to successfully relocating a manufacturing facility. We have a template
we use as a starting point for our client relocations, but it’s not rocket science. The template includes an equipment
ID along with equipment mechanical, environmental, foundation, and material handling requirements.
We create a digital library, and recommend this as a best practice. The library is the repository for equipment
AutoCAD blocks, manuals, equipment performance requirements, consumable requirements, foundation drawings,
performance tolerances, environmental specifications, and any other resources required for your equipment and
operators to successfully transform raw materials into finished goods.
The Resource List and Library should be available to all design engineers and contractors involved in the design and
relocation of your new facility. These documents can be included in the Contract Documents to preserve the project
schedule and budget and promote project success.
- Benchmark Equipment Performance and Audit Equipment Condition
To ensure your equipment performs to the requirements of your operations, measure, test, or observe and document
all critical performance elements including tolerances, rate of production, defect rate, etc.
If you’re measuring OEE, you might be tempted to think you’re already measuring the performance parameters
required to specify the recommissioning requirements at your equipment’s new location, but these benchmarks are
different. For instance, defect is inherent in the leveling and alignment of a machining center although expressing
a specification in Thousandths is much more definitive than 1 part defect per 10,000 units defines the health and
accuracy of your existing production equipment. Many of the critical specifications can be found in the equipment
OEM installation instructions.
Auditing and documenting your equipment’s condition prior to disassembly and relocation can further protect your
interests in memorializing condition before the equipment is relocated.
Consider including your millwright contractor in this phase of relocation.
- Design an Optimized Layout
Generally, align equipment and processes in the order required for fabrication and assembly. Consider any shared
resources. Prioritize the products and processes that have the largest impact to business.
Design Raw Materials and Finished Goods Warehouses. Explore utilizing equipment to maximize the density of your
warehouses including Narrow Aisle and Very Narrow Aisle forklifts, ASRS solutions, etc.
Plan spaces for any production or process requirements including material movement aisles, WIP storage,
compressor rooms, hazardous material storage, daily huddles, forklift battery / maintenance station, and anything
else required by your organization.
There will also be facility related requirements including sprinkler rooms, a main electrical service area or room, code
compliance including egress and fire walls, etc.
Don’t forget employee amenities including designated employee and visitor walkways. Building codes and OSHA are
often inadequate at planning for your employees restroom, locker room, and breakroom needs. Depending on the size
of your planned facility, consider multiple locations for employee entrance and amenities to minimize the time they
spend accessing their work area and amenities.
Rethink how you use your real estate. For example, a trend for Low Volume / High Mix manufacturers includes
Production Support Suites adjacent to production areas which can include areas for sales, purchasing, engineering,
superintendents, and all other business functions which support a Value Stream. A new facility provides a blank slate
to transform how you do business.
Review your current operations, noting your manufacturing constraints. You can lay out your facility to meet short
term manufacturing goals, but what about future growth? Planning to relieve any cell or line constraints you have
visibility of today will make increasing capacity in the future easier and more efficient.
Keep in mind when laying out your facility some basic principles of construction economies. It is usually more cost
effective to build a square building than a rectangular one. This is due to the relatively high cost of perimeter walls
compared to a supported roof structure.
- Site Planning Considerations
Attention to Site Planning details is critical to the short and long term success of a facility. Planning to add a shift
or for your next expansion at the initial facility design can save investment, time, and headache when your new
facility is no longer adequate to meet your production needs.
Best practices include planning for existing and future employee parking, commercial and employee traffic, access
for waste removal, location and access to bulk gas storage facilities, future access for large equipment replacement,
or any unique considerations unique to your operations and processes.
The site planning team must consider the building codes enforced in the area relating to building setbacks, water
retention, impermeable surfaces, fire department access, etc.
- Find Construction or Renovation Representation
Who at your company will represent you during construction? Owners’ representation of construction management
fills many roles including a liaison between management and trades, representing the manufacturing process
throughout construction or renovation activities, ensuring the work being performed meets specifications and
industry quality standards, and reviewing and approving progress draws.
Depending on the size of the project, this can be a full-time job throughout construction or renovation.
Underestimating the expertise and time requirements of this role opens you up to project risk on budget, schedule,
and overall success. Identify resource(s) within your organization to mitigate your risks or consider hiring a project
manager to represent your interests.
- Plan Your Relocation
The ultimate goal of successful relocation planning is minimizing or eliminating the impact on your customers,
which includes meeting all delivery promise dates.
Communicate the detailed relocation plan to all impacted stakeholders and highlight the impacts and potential
breaks to production.
Whenever possible, start at the first process and relocate processes and equipment downstream. Sequential planning
or start at the last process and relocate processes and equipment upstream.
When necessary, build product to inventory, both Work in Process and Finished Goods, to supplement the downtime
associated with pieces of equipment or lines being decommissioned, relocated, PM’d, reinstalled, and
recommissioned.
- Recommission Equipment
Utilizing the Benchmarking outlined earlier, recommission your equipment to the required specification and condition
required to meet your operational and production requirements and goals. Recommissioning should be a formal
process identified in your project schedule.
Above All, Partner With an Experienced Consultant
