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Inward Investment Guides

The Site Selection Checklist: Prepare Your Approach

Regardless of which and how many factors make up the checklist, understanding these decision-drivers, their priority, and potential impact on the project will provide the foundation for the location analysis.

Brad Lindquist, Senior Managing Director, Newmark Grubb Knight Frank and Phil Schneider, President, Schneider Consulting, LLC (Nov 08)
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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

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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