Business Case Analysis
The stay-or-go decision often precedes site selection and typically presents BLS & Co.’s clients with a choice between expanding an existing facility or establishing a new operation at a different location. Each alternative offers specific advantages and challenges that must be carefully reviewed and understood. A host of factors must be analyzed to determine tradeoffs among operating costs and conditions, financial return and risk. Although the outlays can be substantial (relocation can easily cost $50,000 - $100,000 per employee and severance benefits can be almost as expensive), the decision must go beyond the potential return on investment to consider objective and subjective tradeoffs associated with operating cost reduction, culture change, organizational disruption, span of control, market access and other issues associated with positioning for long-term growth.
BLS & Co. works with clients to identify and test alternative deployment scenarios (relocation, expansion, consolidation) and then to understand both the one-time project costs and the impact of any changes on annual operating expenses. We also identify and assess the possible impacts on the company, its people, customers, stakeholders, etc. Frequently such an exercise becomes a precursor to site selection efforts.
Case study
HelloFresh
BLS & Co. managed a nationwide search that led HelloFresh, an international meal kit company, to relocate some operations to, and expand others in Newark, NJ.
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HelloFresh
Project Overview
HelloFresh, an international meal kit company with offices in New York City and Germany, chose to relocate and expand its operations to Newark, NJ. After a nationwide search, the firm decided to lease a 217,000 square foot distribution space and an additional 20,000 square feet of office space in downtown Newark. The NJ Economic Development Authority estimates the project will yield a net benefit to the state of $4.1 million over 20 years.
Results
- Retention of 89 jobs and creation of 321 jobs in the distribution center; 122 new jobs and 33 retained at the customer care facility (call center)
- Space occupied: 225,000 of distribution space; 20,000 square feet in its customer care center in Newark, NJ
- Economic impact: $4.1 million over 20 years
Location Advisory & Strategy
Site selection was once the domain of boutique consultancies whose most compelling assets were their proprietary databases of location information. The internet has radically altered that value proposition by making geo-specific information and data available to everyone. However, these online repositories offer little help interpreting the data, and almost no assistance facilitating an actual location decision—a real drawback when site selection projects have grown in complexity and the timeframe for location decision-making has shortened considerably.
At BLS & Co., we help clients optimize their location choices via deep process expertise, problem-solving skills and situational awareness. And yes, we also have access to the most effective analytical tools and databases available to evaluate labor markets, logistics, costs, regulatory environments and other critical location variables. We also bring specialized expertise to the assessing of utility infrastructure and energy pricing and to the impact of location on supply chain networks. We carefully integrate site selection with business incentives and real estate negotiations, staffing and training initiatives, and our clients’ overall project schedules.
We have represented global companies across North America, as well as Europe and Asia, where we are able to draw upon the resources of our strategic partners (including Tractus Asia) for specific working knowledge, government and business contacts, and labor force and business climate insights.
Additional location services
Labor Market Analysis
In an era of contracting labor supply and growing demand for specialized skills, successful companies will have to compete for employees in much the same way they contend for customers. BLS & Co. helps clients understand whether a particular location can sustain their business by thoroughly analyzing availability, quality and cost of local labor. As labor markets are organic entities that often transcend political boundaries, we focus on key population, labor force and employment indicators within a custom-designed labor catchment defined by commuting distances and conditions. We augment this statistical approach with empirical research—monitoring employers in target areas and conducting interviews with companies, recruiters, higher education institutions and workforce development officials. We ask penetrating questions about competitive labor demand, wages levels, employment relations, successful recruiting methods and other key variables.
Insights
Technology in Site Selection: “Visualizing” Site Selection
BLS & Co. Managing Director Tracey Hyatt Bosman and GIS and Site Selection Consultant Carissa Foley explore how data and site visualization work closely together (though they rely on different technologies) to support a project team's evaluation of potential locations.
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Logistics / Supply Chain Optimization
The most strategic location for a company’s manufacturing plant or distribution center is one which balances the optimal supply chain network design with operating requirements such as the availability and cost of labor and facilities, tax treatment of inventory and personal property and incentives. BLS & Co. helps clients understand and evaluate transportation costs, shipping methods and service levels for existing and proposed manufacturing, assembly and warehousing locations. We answer questions related to supply chain strategies, including:
Facility Location: Where should we locate our new operation? Do we need one facility, two, or more?
Capacity Expansion: Should we grow at our present location or into another facility
Supply Chain Modernization: Are our facilities in the most efficient locations?
Network Optimization: Is our network configured to achieve a balance of cost and speed to delivery?
