By: Joe Iatauro, Executive Managing Director
A recent survey by the Council of Supply Chain Management Professionals (CSCMP) and ToolsGroup found that while companies had a positive outlook as they started 2022, many are now concerned that labor shortages, material delays, surging inflation, and escalating fulfillment costs will negatively impact industrial operations moving forward.
To navigate a dwindling workforce, many companies are moving toward increased automation, utilizing their staff on projects of higher value. Some are relocating entirely to find a facility that better accommodates their needs. Others are expanding their geographic footprint to combat rising transportation costs.
Without question, to succeed, companies must rethink and redefine operations. Unfortunately, these changes are not always that simple. Companies often find that competing priorities and program complexities result in disjointed solutions that miss the mark.
Planning for Success
For businesses to grow in this rapidly changing economy, owners, occupiers, and end-users alike must understand their industrial portfolio’s vulnerabilities and address them in a way that accounts for all processes, procedures, and real estate.
While companies will consider a project or program’s total cost, schedule, and layout when making changes, they typically approach projects in a one-dimensional, isolated way. Because of this, companies fail to dive into how each project or program relates to other business functions, creating “solutions” that are not:
a.) Resilient enough to optimize performance long-term; or
b.) Flexible enough to account for changing needs.
For example, as more companies look to incorporate automation into a space, they need to conduct in-depth facility planning that accounts for equipment layout and production flow while simultaneously considering economic incentives, infrastructure, and potential obstacles. Sites must also be assessed through a short and long-term lens so that designs can evolve.
An All-encompassing Approach
Planning and foresight are critical to successfully designing and developing a space for manufacturing, food processing, cold storage, and distribution. Companies must incorporate anticipated business functions and devise a total solution that includes capital improvements, inventory management, the supply chain, material handling & equipment, ESG objectives, and of course, real estate. This is accomplished by:
- Developing a Business Case: Aligning company and department goals while considering the product or package type, process validations and certifications, and project budgets and schedules.
- Devising a Facility Plan: Creating block diagrams and equipment plans incorporating automation, the number of lines, processes (batching, blending, mixing, pasteurization), optimization, material and finished goods inventory, flexibility, and integration.
- Due Diligence: Determining which facility is best (existing or greenfield), the need for rail, zoning and special permits, restrictions, environmental conditions, water and waste, and improvements while factoring in the business impact (transportation impact, labor viability, and economic incentives).
A strategic Program Management approach drives productivity and performance by rethinking or redefining a geographic footprint or operations based on these points. Only then can companies integrate new, performance-based technologies, incorporate flexibility to minimize disruption, and take steps towards environmental sustainability.
Solutions that Deliver
At Stream, our National Program Management team partners with clients to understand their business needs and plan for their success. This deep understanding of client needs and relationship-building focus is why Stream is different from many transactionally based firms and defines how we work with companies to develop customized, scalable solutions.
Whether your business demands a transformation of industrial space, incorporating technology, reducing your environmental impact, or driving efficiency, Stream provides the true end-to-end program delivery that accounts for your people, processes, and future goals.
At the end of the day, you get what you plan for.
Joe Iatauro is the Executive Managing Director for Stream Realty Partners’ National Program Management Services division. With over 18 years of experience, Joe has led the development and construction of more than 20 million square feet of manufacturing, mission-critical, semi-conductor, warehouse, distribution, cold-storage, office, and other asset types.