Choosing the right location to expand or consolidate food manufacturing, processing or distribution operations is quite a challenge, leading many companies to solicit the help and expertise of professionals. Deane Foote of Fort Worth, TX--based Carter--Burgess says one of the first things he does is thoroughly understand a company's objectives relating to its products, the location of its markets and the logistics models required to get those products to market quickly.
The first step in the site selection process is to develop an overall plan of what your goals are, agree the experts. This will help ensure avoiding some common pitfalls involved in this complex process, says John Schook, manager of the food and beverage group at Carter--Burgess.
"If you don't develop a master plan even before you locate a piece of real estate, you can end up with a piece of property that's too small to accommodate future needs--or it might not have enough sewage or water capacity for future requirements," Schook says. A good investment on the front end of a new project, whether it's a food DC or food manufacturing or processing facility, is the master plan for the entire project including the property and the facility.
Schook recommends that companies invest in detailed programming analyses of the facilities themselves. Make sure you have a full understanding of the number and position of pallet positions you will require, he says. Also consider the number of truck movements for shipments of finished products and for deliveries of raw material sfor immediate and future needs. Also plan to have enough room for trailer parking and maintenance areas as well.
Having a well--planned document outlining exactly what the specific needs are for the size of the property required, as well as the size and configuration of the facility, will help make the project move along more smoothly, Schook says. For instance, if a company anticipates future growth, it's important to position infrastructure components, such as fire protection, gas, sewage, water and power mains, so they do not to compromise future expansions.
To minimize upfront development costs, sites should be fairly level and smooth. Blasting large rocks can get very expensive.
Companies with a short development timeframe need sites with infrastructure and roadways in place, but these sites are usually more expensive. Companies with more time can look to a community to provide free or discounted land and government incentives that deliver infrastructure at no cost to the company.
Transportation makes the largest impact on the cost of logistics. That's why ideal sites possess quick access to commercial routes, which affect the delivery of raw materials, truck fleet availability, shipment rates and backhaul opportunities. "The ability to deliver in a timely manner without delay or losses is paramount to profitability," Schook says.
While trucks are the standard method of transferring goods, alternative transportation modes could provide cost savings. Rail and inter--modal shipping can be suitable options for receiving heavy food and beverage materials that don’t require precise delivery arrivals.
Another important aspect of logistics is the design of the building. Preliminary planning should properly accommodate items such as wastewater capacity, necessary acreage and truck dock locations. Oversights in these areas can "cause the process flow to be adjusted," so that a plant works less efficiently because of the site's constraints, Schook says.
Becoming familiar with local, state and federal permits, zoning regulations and restrictions and communicating with officials about water capacity and wastewater pre--treatment abilities will aid in the design of the facility.
While various locations may meet transportation needs, a reliable and productive labor force can be harder to find. It is critical, therefore, to identify good community characteristics in site selection, says Craig Morgan, group manager of the Real Estate Services Group at Carter & Burgess.