Exhibit A – Building approach based on usage requirements.

By Daniel Smirl

According to a recent analysis by PWC, a confluence of factors including geopolitical instability, ongoing supply chain issues, and favorable legislation are making U.S. domestic production an increasingly attractive option for manufacturers across sectors – including both U.S.-based companies and inbounding foreign companies. In this post, I’ll draw on my more than 35 years in the construction and real estate sectors to offer some of the top considerations for companies looking to expand or establish U.S. light industrial/manufacturing facilities.

Step One: Determine Category and Goals

The first step to evaluating facility needs is to determine the manufacturing category and overall goals for the project. The manufacturing category is generally determined by the variety or customization of products, and overall volume of output. The goal may be to expand a current operation or replicate a facility in a new location, or to scale production, which would require a larger facility or consolidation of multiple locations for improved economies of scale. The optimum size of a building is directly related to the size and number of machines or pieces of equipment required for the targeted scale of production, among other factors as outlined in categories A-D in Exhibit A above.

Based on these initial criteria, we can begin to determine if a new, ground up facility would be required, or if leasing an existing facility could accommodate a company’s needs. This would also involve the business decision to own and operate a facility, or to lease from an established developer with a specified lease term to limit future exposure.

Further analysis is required for owners considering a new facility. Location, type of construction, and infrastructure requirements are the top areas for consideration.

Location

  • Geography
    Determining where to place the facility is impacted by its proximity to the company’s customer base and vendors, as well as governmental cooperation and incentives.
  • Logistics
    Also of critical importance is an evaluation of shipping and transportation needs. How will raw materials reach the plant, and how will finished products be delivered to their distribution network? Access to ports, rail lines, and major highways are carefully studied.
  • Environmental impacts
    How will the environment be affected by the plant? Regulations around air, water, and soil contaminants differ by region and locale within a region and must be carefully considered at the early planning stage.

Type of Construction

  • Pre-engineered metal building
    These buildings are generally cost efficient but can lack in curb appeal. They may also lack the necessary fire rating and wind load requirements without extensive fireproofing or structural enhancements.
  • Tilt-up construction
    This building type is popular as it can produce an attractive façade while providing higher fire rating compliance. The internal structure can include pre-engineered steel framing but may require specialty structural steel designs depending on factors such as overhead cranes and roof heights.

  • Structural steel framing with tilt-up or precast façade
    This is the most expensive type of construction but can provide the highest quality and meet all specialty requirements for manufacturing needs and code compliance.

Infrastructure Requirements

  • Utilities
    Power and water requirements are usually the most important for large scale manufacturing. The capacity for consistently delivering power at the scale required as well as water for fire protection and process needs may require major upgrades to existing municipality services. Capacity for handling large amounts of discharge water in existing sanitary sewer systems can also be a concern and may require specific treatment procedures prior to discharge.
  • Transportation
    Roads leading to the facility may need upgrading to accommodate expected traffic flow, which usually involves mandated traffic studies. Road widening, added traffic signals, and deceleration / acceleration lanes in and out of new facilities are often required. Rail spur lines may also be considered, which present an array of issues.

  • Site Conditions
    The nature of the soils and topography of any proposed site must be carefully evaluated since this will dictate storm water retention as well as foundation types and cut/fill requirements. Soil borings and geotechnical evaluations as well as environmental compliance and due diligence reporting are necessary for any new greenfield project.

Addressing manufacturing facility needs in the U.S. requires significant upfront planning and analysis. The Items outlined here provide the basic framework. A host of additional questions and considerations will likely need to be addressed based on a client’s specific needs. Discussions around construction can begin once the planning is set.

About the Author

Dan Smirl

Sr. Project Manager, Cumming Group

Dan Smirl is a Sr. Project Manager within Cumming Group’s Central U.S. region. Currently managing more than $400 million in construction, Dan’s 35 years in the industry have included work on a wide range of manufacturing facility projects and programs incorporating all of the building types addressed here. Dan is routinely consulted on all aspects of manufacturing facility planning, design, and construction.