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Infrastructure / Accessibility - How Important is it?

By Edward Drennan

Real Estate Sales Representative with Century 21 Miller Real Estate Ltd. 4793863

August 17, 2017 12:46 PM

Finding Your Ideal Commercial/Industrial Building - Part V

Welcome back! Infrastructure / Accessibility and its impact on site selection are discussed:

Accessibility Can Make or Break Your Business!

No matter what type of business you are in, infrastructure and accessibility are critical considerations. There are many accessibility considerations that are similar between business types. Some examples of these similarities would be:

Can your customers find you?

Is parking required and, if so, is it available?

Are there people available to hire with the skills you need?

Can you get product into and out of the building easily?

Is the square footage sufficient for the purpose?

How much can the business grow in the available space?

Are adequate services (heat, lights, telecommunications, etc.) available?

Is there room for growth on the property / land?

Once you get past these basics though, there are a number of accessibility issues that are specific to the type of business. For this discussion let’s concentrate on a production facility. Your requirements will initially be defined by what type of business you are in, what type of product you make and what is required to make that product. For example, if you need large quantities of fresh water you obviously would not be looking to set up in a desert environment. What you need to consider is what raw materials and services will be required and how to get them to your proposed facility. In most cases you can have the material shipped to your plant but in some cases it is better to locate close to the source. Even that will probably require some short distance travel so the question still remains: how to get the raw materials to your plant?

The basic methods of transport are road, rail, water, air and pipe. Each has its strengths, weaknesses and cost factors, which we are not going to talk about here. Instead, the key is that once you have decided on the transport method, then you then need to consider whether the prospective site has adequate receiving capability of whichever type(s) selected.

Road:

For most companies this means: Do you have an adequate (number & size) of loading doors/docks for the number of trucks needed to both receive and ship out product, even during peak times? A rough estimate allows 2 full truckloads an hour per loading door.

Depending on the type of material being loaded or unloaded this could change quite dramatically, but at least it is a starting point.

Rail:

The obvious question is whether rail is even available. If it is, you still need to determine how many rail cars will be placed at any given time and how often they can be delivered or removed from the site being considered. What is the existing rail car track space and railway service levels: Regular spots/week and is it scalable to meet peak demands? One of the points you certainly want to look into is where your proposed facility is on the rail spur line, how weather may impact usage (e.g. snow / ice / vegetation / debris removal) and if part of the line is privately owned (potential limitations charges/costs over the years). If you are at the end of the line you may end up being responsible for a higher percentage of the rail maintenance costs then if you are at the head or the middle of the line and finally whether the railway and/or private owner is invested to keeping your line section well serviced based on its future business plan and needs.

Water, Air & Pipe:

Water can mean either ships or barges. Air can be either airplanes or helicopters (though in some cases it can also be by blimp). Pipes, with the exception of natural gas, usually do not have a distribution network to individual plants. In any of these three cases, most people are not going to have direct access to that mode and therefore the material must be transhipped from a central distribution point to the actual plant location. Usually this would be done by either road or rail and would therefore fall under the points noted above.

Bulk Storage:

One other issue that may be of major concern is bulk storage. If any of the raw materials is received via bulk containers and then transferred into bulk storage tankage there is likely to be containers sitting on site waiting to be unloaded (or loaded if you also ship bulk material). Are the available tanks large enough to accept a full load or does it need to be unloaded in steps? Related to this, what is the average length of time from when the tank is empty enough to accept a full shipment to when the tank is empty? If it is more than a couple of days there is usually no problem but if it is only a couple of hours then you will have scheduling issues as long as this situation continues. These issues will lead to extra costs, both for demurrage and for expediting of the loads. This is definitely a situation where a bit of preplanning can save the company a great deal of time, money and aggravation.

Most of these issues fall under the general heading of “flow”. While we have been concentrating on receiving in this post, we will pick up from this topic and concentrate on flow inside the facility in the next post.

Remember, an understanding of all the factors involved and preplanning of possible future requirements and options can help ensure fewer issues and lower costs in the long run as your business grows and prospers. Working with professionals to help you address these issues and possibilities will make your life far less stressful and grow your business as time goes by. Give us a call and let us help you help yourself.

Stay tuned for part VI – Importance of Production Flow

Part IV - Cost Is It The Most Important Factor?

Part III - Size Matters!

Part II - Location, Location, Location!

Part I - Finding Your Ideal Commercial/Industrial Building