high-volume employment? Does it handle certain products that may be allowed in one area and not in another?” The types of products that will be handled in a facility—refrigerated or ammable, for example—should be in the foreground of a site selection choice. “The type of product being handled can be a major critical factor in choosing a site,” Dunbar says. Closely study utilities, including electric availability. From a logistics standpoint, the growing use of automation means that some companies do not require the large spaces they used to, and they are better able to use “every inch of a facility,” Mitchell notes. “Automation does change the power requirements, so make sure that you have enough power for the facility,” Mitchell says. “Sometimes that can be a problem depending on where you’re located.” In fact, Mitchell has encountered scenarios where the power grid was insuf cient to meet the needs of an automated facility, requiring working with the local utility company to increase the grid around the building and to run generators while the work was being done. If a company is considering existing facilities for a new site—rather than a location where they will build a facility from scratch—then the facility’s composition must match what will be managed inside it. Trying to “make it work” in an ill-suited facility because the location is great will create problems. “We’ve seen situations where logistics facilities, designed for quick leasing to many clients, have a problem: their roo ng materials aren’t adequate for a tenant’s operations,” Mitchell says. “This can make it impossible for that company to get insured, which is a critical issue that needs to be addressed beforehand.” The role of warehouses and distribution centers is too important to overlook inef ciencies when selecting a site in hopes of “ guring out how to make it work,” Dunbar says. “Don’t just make general assumptions,” she advises. “Today, we have the science and technology
When choosing a new site, carefully evaluating the local workforce—their skills, availability, and cost—is crucial. A strong talent pool ensures smooth operations and long-term success for any business.
to achieve precise accuracy when determining things like conveyor length, equipment sizing, or racking dimensions. A thorough understanding of the process will help you make the best decisions.” 3 Evaluate the regional workforce and consider incentives. Companies that have never conducted a site search for a distribution center often make the mistake of focusing solely on the site’s proximity to markets and transportation network. “While these are certainly critical to distribution centers and warehouses, the availability of suitable labor at reasonable wage rates can be equally important,” Lindsay says. “For those centers still requiring a signi cant headcount, the cost to nd and keep workers can be a large portion of the operating expenses.” Evaluating the regional workforce starts with understanding the speci c needs of the facility—the number of workers, the necessary skill levels—and then analyzing the availability of labor in the area that meets those needs. “The process de nes the labor,” Dunbar says. “The process de nes the demands of the site.” Understanding the skill set that you will need and the resources in a region
to help train workers can be challenging for some facilities. The presence of colleges and technical schools is helpful, and local economic development organizations can be great collaborators to identify and develop workers who match a company’s needs. “It’s important to understand the labor dynamics,” Dunbar says. “If it’s not a highly automated facility and you need a lot of employees, do you have the ability to effectively staff it? Some markets have exceedingly low unemployment rates, and they struggle for years to get the appropriate number of workers.” Among the ways that regions try to lure companies to sites in their areas is with an array of incentives. Garner says his rm’s clients generally consider incentives “a nicety rather than a necessity.” “While incentives do not improve the quality of a subpar site, they can be crucial during the nal evaluation and scoring of potential sites,” Garner says. “Initially, we score the sites without incentives, followed by scoring them with incentives to provide a comprehensive comparison.” Lindsay agrees that incentives should be reserved for the end of the site selection process, when decision- makers are weighing a group of nalist locations.
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