Manufacturing
The Important Questions to Ask When Picking a Key Manufacturing Location
Companies that are at the decision point for selecting a location to manufacture their product have a number of factors to consider, and, for small or medium companies, conducting an international site selection process can be even more complex. What are these factors and how can a company find reliable information to satisfy their queries?
Cost is usually the most important consideration for a company, and there are a multitude of factors that can impact a company’s production costs:
- Is it feasible for a company to develop its own manufacturing capacity or should it contract it out?
- What are the relative costs of suitable land and construction, or are there adequate sites available on the local real estate market?
- What are the costs to acquire and set up production machinery?
- How do utility costs vary from market to market?
- What are the relative costs for labor? For suppliers of inputs and services? And for logistics and warehousing?
- To offset these costs, what incentives are local or state governments offering to bring your company into their jurisdiction?
Access to talent is another consideration:
- Does the workforce in the target market have the requisite levels of education and skill sets that your company will need to initiate and maintain production?
- Do the local secondary and tertiary educational systems have the right programs to develop a talent pipeline for your company?
- How competitive is the job market for the employee profile your company will require?
Access to talent can also refer to the availability of local research and development capacity and engineering assets.
- Is the target market home to a university or research institute with a significant research, development and design enterprise that is engaged with local industry?
- Are there engineering service firms available in the target market that can meet your needs?
A third key factor to consider is location. A location analysis of the target market for the manufacturing operation should reveal the relative impact of transportation and logistics costs for inputs as well as reduce risk for delays in delivery. It should also place the manufacturing site as close to consumer markets as possible and be in a region with excellent connectivity in multiple modes of transportation in order to reduce freight costs and maintain just in-time delivery schedules. A general location analysis should be conducted for all target markets which determines the average value of a number of weighted factors for each site to reveal the best site overall.
Finally, some other considerations concern the regulatory environment.
- What is the level of support a local community and government will provide to facilitate start up? Does the location offer a competitive tax structure to attract new businesses?
- Are there any environmental compliance issues that must be considered?
- Are there free trade zones in the region that your company could take advantage of to reduce or eliminate tariffs on inbound goods?
- And in general, does the region offer an attractive quality of life for management and employees?
In the end, the decision to locate a manufacturing facility does not pivot on one single factor, but rather it is a balance of all of the factors unique and relative to your company’s needs. Global Advantage can help your company meet its production needs in the Arizona – Sonora region.
Why Choose Global Advantage?
Global Advantage is an innovative partnership that leverages the benefits and assets of the Arizona-Sonora region to help those that seek business entry into the North American marketplace and a competitive venue in which to develop their ideas, produce their goods, and benefit from the logistical advantages of the location and surrounding international business ecosystem.
Tucson, Arizona is centered between Los Angeles and San Diego to the west, Phoenix to the north, major Texas cities to the east and Mexico to the south, all interconnected by a robust logistics network of air, rail and roads. It is positioned in a large regional consumer market and trade corridor accessing 34 million people within a 500-mile radius and a 55-million population within a one-thousand mile radius. Tucson provides excellent access to consumer markets and it is well positioned along well-established logistics corridors running east-west between Texas and California and north-south between Mexico, the Inter-Mountain West and Canada. Supply chain connectivity – check. Access to markets – check.
The Global Advantage partnership provides access to the world-class research and development capacity of the University of Arizona and Tech Parks Arizona, as well as top tier engineering, design, and prototyping services from Aztera, Caid Industries, and Ducommun. For those companies ready for full scale production The Offshore Group offers manufacturing services within the Arizona-Sonora region at competitive rates and can assist you with global supply chain solutions.
Access to talent and manufacturing know-how – check.
Cost competitiveness – check.
Global Advantage provides a complete suite of business support and production services, all from a one-of-a-kind location within the NAFTA region.
Give your business a Global Advantage. Contact us today to set up a consultation.
Citations
Facility Location for Global Manufacturing
Cushman and Wakefield Manufacturing Location Index Global Advantage
