Tips for Successful Plant Relocation and Consolidation
Every year Deloitte carries out surveys. One of the surveys and trends addresses the state of mergers and acquisition trends. Recently they published their comprehensive look at M&A activity for 2019. Their survey looked at deal trends and predicted deal strength will remain strong in 2019. Some of the reasons cited were tax reform, a more relaxed regulatory climate, and growing cash reserves among corporations and investors.
In their survey, 79 percent of respondents expect the number of deals they close in the next 12 months to increase. One area that continues strong, also because of tax reform and relaxed regulations, is the manufacturing sector.
It is expected that manufacturing deal volume will continue record rates. The annual volume is presently over seventy billion dollars. 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 some investors and executives, the complexity of integration of facilities and manufacturing lines is often underestimated. They look at it as an afterthought in the deal. Nothing could be further from the truth.
In fact, a detailed plan and execution of the relocation and integration of manufacturing facilities is a critical step toward success. How well this is undertaken will have a significant impact on a merger’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.
A detailed plan and execution of the relocation and integration of manufacturing facilities is a critical step toward success.
When undertaking plan consolidation in 2019, those implementing the consolidations should carefully consider the impact of currently available innovations in manufacturing. 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 designed and fabricated. Software may need 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.