Plant Relocation and Consolidation
Mergers and Acquisitions in the industrial manufacturing arena were very strong in 2015 and continue at a high rate in 2016. In fact, deal volume is happening at the highest rate in over a decade. The annual average is well over 70 billion dollars. These consolidations take place among US based firms as well as in multinational deals. There are a number of reasons for this high volume. There continues to be a large amount of capital available both to investors and among manufacturing firms themselves. Private equity firms and venture capitalists are looking for opportunities to purchase and grow innovative technology companies while manufacturing firms are looking for opportunities to expand in high growth areas. In the process, these same firms may also be looking for opportunities to sell parts of their operation, perhaps areas they consider non-strategic in order to raise additional capital. The result of these transactions is often consolidation and relocation of facilities or manufacturing lines and may include cross-country or out-of-country moves.
To the investors or corporate executives, the integration of facilities and manufacturing lines is sometimes looked at as a boring and unimportant afterthought. But nothing could be further from the truth. In fact, a detailed plan and execution of the relocation of manufacturing facilities is a critical step toward success and how well this is undertaken will have a significant impact on a company’s chances for success. Successful manufacturing plant integration requires looking beyond the immediate concerns of a physical plant and its location or the money that can be saved by consolidating facilities.
When undertaking plan consolidation in 2016, those implementing the consolidations should carefully consider the impact of innovations in manufacturing that are currently available. Where possible, they should upgrade the plant to include newer and more innovative technology. Innovations such as additive manufacturing, nanotechnology, the Internet of Things and next generation robotics should all be considered as possibilities to change how the relocated plant is structured and operated. The relocated plant should, as much as possible, be upgraded to keep pace with the digital revolution.
When a company is undertaking a consolidation or a relocation they should engage a strong and knowledgeable partner to help them with the planning and implementation. New or upgraded manufacturing machines may need to be designed and fabricated. Software may need to be updated. Existing equipment which will be relocated must be carefully documented, dissembled and installed. The new facility must be built out with all the necessary utilities and services for the consolidation and this must be completed in a timely schedule.
At Optimation Technology we have extensive experience in supporting relocations and consolidations. We have a trained engineering team who can develop necessary new and modified manufacturing equipment as well as teams of electricians, field machinists, welders and pipefitters who can assist with the disassembly and reinstallation of equipment. We have knowledge of the latest trends in manufacturing and the benefits of implementing them. We can work with a manufacturing team to help make any consolidation successful and cost effective.