Whenever we think of shifting a lot of anything, it arouses a significant amount of stress inside us. Most of us have experienced the stress of moving to a new home in our life. Now consider moving a factory to a new location. It seems scary thinking of all the equipment, machinery, and facilities present in a factory.
Moving a factory is a daunting task which requires meticulous planning, preparation, and skillful execution. That’s why you need reliable services like A&A Machinery Moving to help you out. An entrepreneur must weigh all the pros and cons before deciding to move a factory. Mismanagement and poor planning may bring about dreadful consequences for the factory and concerned employees.
The Top Reasons for Moving a Factory
Thinking about relocating your plant but don’t know how to go about it? Businesses can choose to relocate a factory for different reasons. Here are a few of them.
- Achieving growth is the prime goal for any factory or business. To accommodate growth, a factory often requires a physical expansion of the facilities. Lack of space for expansion in the present location may compel the owner to move a factory.
- A factory’s lifeline depends upon its supply chain. An effective and efficient supply chain can increase the supply chain surplus and eventually the profit from the factory. It involves all the parties involved from the supplier to consumer to fulfill a specific need. To make the supply chain more profitable, a factory may need to be moved.
- Rent, labor, and transportation costs are the most conspicuous expenditure incurred by a factory. A factory may need to move to an area which is transportation friendly and provides cheap labor or incurs less rent.
- Shifting to an appropriate marketplace for grabbing a business opportunity is also a reason for moving a factory. For example, an IT factory may move near Silicon Valley.
- Utility costs, which are quite enormous for a factory, may considerably vary from place to place. To reduce utility costs, a factory may change its location.
Scopes for Positive Modifications
Moving a factory to new place provides opportunities to incorporate a wide range of positive changes which the owner wanted but could not do in an earlier set-up.
- A factory can bring about a significant cut in its supply chain and operating cost by moving to an area favorable for business. This includes reducing rent, transportation issues, utilities, and other cost factors.
- A better space provides an opportunity to install more efficient and technologically advanced equipment, replacing old ones. Most importantly, one can rearrange the business module according to his or her current requirements.
- Moving to place with better business scopes leads to better customer access. Thus, it can be favorable for further flourishment of the factory.
The Top Things That You Need to Consider
Before moving your business, you may want to take a look at the following factors. Know that even small things can make a big difference.
- Getting a place that fits exactly with the requirements is not that easy. It is the first obstacle an entrepreneur encounters prior to moving a factory.
- Disruption in production is obvious when moving a factory. It is going to affect the profitability of the business for a good amount of time. Prior stocking of bulk inventories in alternative locations, preferably to a rented facility, may help for coping with temporary production loss.
- Moving a factory involves sorting, packing, and transporting bulk resources from one place to another place. The cost of moving things is likely to be quite high. Prudence in distinguishing essential and nonessentials may reduce the cost of moving.
- A factory has quite a good number of employees. Many of them are talented and devoted to the well-being of the company. Retention of talented and skillful employees while moving is a challenging task. Recruiting new employees in the new location is a slow and difficult process. Certain incentives may help in retention of skilled executives and workers. Consider the following:
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- Disturbance allowance
- Reimbursement of house-hunting costs
- Subsidy for excess house rent
- Help to arrange a mortgage
- Reimbursement of legal moving costs
- Catering to utilities like electricity, gas, water, telephone, and internet lines also needs prior consideration. Contact a number of local service providers to obtain cost-effective contracts
- Adapting to a new environment is a difficult and gradual process. After relocating to a new facility, a factory needs to be running with functioning operations as soon as possible. Grabbing the market in a new place is also challenging. Online marketing prior to moving may facilitate that.
Conclusion
Moving a factory is a complex process which needs adequate brainstorming before jumping to its execution. It is an expensive venture and thus should be weighed against potential benefits, profitability as well as the convenience of stakeholders involved. If convinced by overriding prospects of a new location, it should be executed carefully to minimize the disruption and overall inconvenience.
