Step 2:
Once
the site selection team has the project foundation in place -
objectives, issues, factors, criteria, and timeline are identified,
prioritized, and weighted - the company-specific site selection
checklist can be completed.
Site selection checklists vary,
often greatly, by industry, function, and company. There are
potentially hundreds of factors that could be compiled into a master
checklist that would cover all of these scenarios - a quick Internet
search will yield several of these "hyper-detailed" checklists. But, in
general, location checklists can be summarized into the four following
categories, and will typically include some variation or subset of the
following factors:
I. Business and Operating Conditions
• Access (customers, suppliers, connectivity)
• Work force (availability, capability, scalability, sustainability, livability)
• Utility infrastructure (power, fuel, water/sewer, telecom)
• Transportation infrastructure (roads, air, rail, port)
• Regulatory/permitting environment
• Business/support services and amenities
II. Geographically Variable Costs
• Work force (wages/salaries, benefits)
• Taxes (income, ad valorem, sales, customs/duties, fees)
• Real estate (land/sites, buildings, lease)
• Utilities
• Logistics
• Incentives (variable cost offsets)
• Inflation
III. Real Estate/Site
• Availability
• Fit
• Expandability
• Flexibility
• Access
• Supporting infrastructure
• Terms
• Timing
IV. Risks
• Natural disaster
• Political
• Social/safety
• Economic and currency
• Regulatory
• Timing
Typical Location Decision Drivers
ACCESS
• Markets or Customers
• Raw Materials or Suppliers
VARIABLE OPERATING COSTS
• Labor, Taxes, Logistics,
Utilities, Real Estate
WORK FORCE AVAILABILITY
• Skilled, Technical,
Management, Expats
REGULATORY CLIMATE
SUPPORT INFRASTRUCTURE
• Utilities, Transportation
REAL ESTATE
However,
it is important to keep in mind that the specific number of factors -
and their rank order within the checklist - will vary greatly by
function and industry. For example, there will typically be
significantly more issues of importance on the checklist of a complex
manufacturing plant location project relative to that of a back-office
function. (Figure 2 illustrates this variability.)
In Sum
Successful
site selection projects result in the identification of a location with
the optimal balance of company-specific operating costs, business
conditions, infrastructure, and risk. Regardless of which and how many
factors ultimately make up the site selection checklist, what is most
important to the project is to ensure that the site selection team
adopts an appropriate decision-making framework and criteria weighting
scheme so that the factors on its checklist are evaluated within a
company- and project-specific context. And, of course, it will also be
critically important to ensure that the location data collected for
each of these factors on the checklist are also project-specific as
well as accurate. A checklist that feeds a poorly constructed location
decision model, or poor data feeding that checklist, will both yield
precisely the wrong result.Phil
Schneider is a Principal with Deloitte Consulting and the leader of its
Global Expansion Optimization and Location Strategy (GEO) practices.
Phil has over 20 years of consulting experience in location strategy,
offshoring, and site selection. Over his career, he has conducted over
250 market-entry and location strategy projects for corporate clients
across the industry and functional spectrum, and throughout the world.
He has also authored numerous articles, speeches, white papers, and
presentations on corporate site selection, location strategy,
offshoring, and economic development.Brad
Lindquist is a Specialist Leader in Deloitte Consulting's GEO practice.
Brad has 10 years of corporate location strategy and site selection
consulting experience, where he has conducted facility and location
strategies, logistics optimization, utility infrastructure assessments,
labor market assessments, site selection, site acquisition, and
incentive negotiations for a broad range of corporate clients
throughout the world.
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