For example, selecting a site in a flood-prone region can expose the organization to supply disruptions. Locating the facility in an area with limited access to rail, road, or water can limit production capacity or the ability to find the required workforce. A properly sited facility can operate when a competitor’s facility is offline due to a natural disaster or efficiently expand when the demand for the product increases. In addition, the right site can also minimize risk associated with GMP/cGMP processes, such as rodent control.
This article discusses developing a plan that not only serves the purpose of developing a strategy but also forces consideration of other aspects of the process. Refining the plan and working through the major hurdles of environmental factors, access, utilities and regulatory considerations will provide a more robust strategy anchored in a logical process that creates confidence and efficiency among all site selection team members. Below, I’ll explain the factors every organization should consider when looking to mitigate risk, achieve success, and uncover the best location for the organization’s next facility.
Priority No.1: Consider the End at the Beginning
The first step in achieving success is understanding what success looks like. The same is true for site selection. The process should begin with the end in mind; however, defining the end can prove to be difficult. When looking for the next site, consider starting with a basis of selection (BOS) document that contains input from all internal stakeholders. This will become the guiding document that can be shared with the rest of the internal and external site selection team. This single document will provide the framework for creating a team and help maintain cohesion by providing efficient and effective communication.
Many organizations see site selection as a task and don’t truly consider the benefits that the right location can provide, especially in FDA-regulated markets such as food and beverage. Begin by conducting a SWOT analysis to examine your company’s strengths, weaknesses, opportunities, and threats that will help determine the business case for the facility. Use those findings to develop key performance indicators (KPIs) and then consider additional topics that are seen as short-term and long-term trends for the specific sub-market within the overall industry. Lastly, include any ancillary goals or metrics that the project team considers.
Once this list is generated, group similar items and rank these groups by order of importance. Upon completion of this process, review the list again, this time considering current and future trends in technology, i.e. lights out/dark factory requirements such as reliable connectivity, backup power, computing capabilities/power densities. This BOS document will help guide and inform the decisions throughout the entire site selection process.
Priority No. 2: Environmental Factors
An early assessment of environmental risks is critical. This may include weather and climate threats such as flooding, droughts, earthquakes, hurricanes, and tornadoes; it can also involve site constraints of existing natural resources like wetlands and streams that require special permitting. Weather can affect how and when you work. Consider the potential impact to the construction project and the long-term resilience of the facility. While mankind has learned to live with the weather, it can still disrupt operations and damage the physical facility.
Other environmental factors are less direct in their impact on the facility location. For example, locating a facility close to a water source is a benefit in terms of utilities but can also be a breeding ground for insects that may be difficult to eliminate and prevent from gaining access to the GMP areas of the facility.
Priority No. 3: Access
Access to both the right type of workforce and the right transportation infrastructure is another key consideration.
If the recent past has taught us nothing else, it has taught us the value of the workforce. Depending on the site that’s chosen, the correct workforce may or may not already be present. Part of the site selection process should involve asking workforce-related questions. Consider the following:
- What is the facility’s radius of influence or the radius from the facility that will be affected by the facility’s operations?
- How far is the anticipated commute for the potential workforce?
- What is the current workforce capacity within the radius of influence?
- What is the current level of training of the potential workforce?
- What other competition for the workforce is in the same area? How does this facility/organization compare in terms of benefits, pay, job satisfaction, opportunity, and training?
- What educational institutions are within the area that can be strategic partners for workforce development?
- What type of raw materials/ingredients are being anticipated, and how do they arrive (i.e., rail, barge, road, combination)?
- What is the finished product, and how it is shipped (i.e., rail, barge, road, combination)? Are just-in-time (JIT) deliveries being utilized, or will warehousing be required?
- If trucks are being utilized, how many will be needed, and will the number of inbound and outbound trucks affect the local traffic patterns and cause congestion? How are the trucks queued before entering and leaving the facility?
- What is the security plan for the entire site?
- Is this site a free-trade zone (FTZ), and will it require additional security?
- How does the facility maintain its cGMP standards around the exterior?
Utilities are an essential part of any facility, and in the current environment, they are all becoming scarcer. The traditional rules of thumb for water, power, and gas consumption rarely apply in today’s modern production facilities. The incorporation of technology — such as electronic controls, robotics, automatic storage and retrieval systems (ASRS), etc.— has not only increased power demand, it also means there has to be an increased emphasis on the quality and reliability of the power.
Water and wastewater is another utility often taken for granted in parts of the country, but even today it must be an identified risk with an associated mitigation strategy. Gas and potentially hydrogen are other municipal utilities that should be considered.
The reliability of these utilities must be evaluated, and resiliency mitigation measures should be considered and, at the very least, planned for. These strategies can involve dedicated on-site power generation from cogeneration, simple gas cycle generation, or the addition of small modular reactors (SMR) as they become more readily available. Water resiliency may take the form of stormwater collection and treatment for non-potable water use, such as non-contact process water.
Priority No. 5: Regulatory Considerations
The product being made, ownership structure of the organization, and its track record of being a good community partner all play a role regarding the type of reception the facility will receive from the federal, state, and municipal stakeholders. A good relationship can lead to favorable incentive packages.
While the Food and Drug Administration is ultimately regulating the processes inside the plant, the major regulatory body you’re most likely to encounter during the site selection process is the Environmental Protection Agency. Each jurisdiction is different and will have its own unique process of project approvals to turn an expansive piece of agricultural land into the site for any type of manufacturing facility. Because this process can have a big impact on the project cost and timeline, create a detailed plan for the required approvals during the site selection process. There may be site-specific permitting requirements, community engagement, negotiations, trade-offs, and multiple levels of government involvement.
With any site, there are a number of regulatory bodies and issues to consider. Depending on the product, there may be incentives available for more sought-after industries, while others are going to be seen as a negative by many in the neighboring community because of the impact to the local environment.
While the Food and Drug Administration is ultimately regulating the processes inside the plant, the major regulatory body you’re most likely to encounter during the site selection process is the Environmental Protection Agency. The EPA will weigh in on issues ranging from emissions to wastewater treatment.
A Vital Part of the Nation’s Infrastructure
As one of the base physiological needs represented by Maslow’s Hierarchy of Needs, the food and beverage industry is a vital part of the nation’s infrastructure and should be treated as critical to national security similar to energy infrastructure, cyber, and defense. This article serves to provide a starting point for a successful site selection process that will benefit any company operating in this sector. To make the right long-term investment, be sure the site selection strategy considers utilities, workforce, access, and regulatory concerns, and always begin with the end in mind. These five steps will save you time, money, and headaches down the road.