How to Successfully Relocate an Auto Plant
Published on : Monday 23-09-2019
Commercial Moving, Writer Relocations.
Last year, Maruti Suzuki India moved out of Gurugram – the place of its birth back in the early 1980s. It was becoming far too cumbersome for the auto major to continue manufacturing cars in the middle of a city which had transformed into a bustling megapolis in recent years. Likewise, about five years ago, Toyota’s North American arm decided to move its plant from Southern California to a place near Dallas. The company said the main factors in choosing a location like Dallas included factors like housing availability, logistics and quality of life.
There are several examples like these where auto plants across the globe are forced to relocate their facilities owing to many reasons. It could be the need to consolidate facilities to reduce operational costs or urge to fulfil the growing needs of business. It could also be to set up new product lines and moving operations to larger facilities or keeping up with increasing demand. Another reason could be a response to evolving market pressures which requires relocating closer to customers or supplier network.
Irrespective of the reasons, though, relocation initiatives for facilities as large as auto plants are never easy. They come with their set of challenges and the process can be overwhelming and tough. Yet, a comprehensive plan before embarking on the relocation can be of great help for the company as well all stakeholders involved for smooth transition and adjustment in the new facility.
Auto plant relocations require a different level of commitment and stakeholder engagement. The level of consultancy is immense and involves intense planning, scheduling and risk management. Good project management from initiating, planning, monitoring and control and finally the actual execution is extremely essential during the whole process. Relocating an auto plant could take anywhere between four and six months.
Detailed planning and communication are the first steps in a project as major as relocating an auto plant. This is of prime essence because when a running production operation is being relocated, there must be no production stops due to an undersupply of parts. This means that any production relocation has to begin within the planned timeline and with a proper yield of good parts.
However, auto relocation projects are mostly better off backed by a professional project organisation. These experts are well prepared and experienced at handling the organisation and implementation of the process with their efficient planning. They have adroit teams that are skilled at managing aspects right from the approval processes from local authorities to defining the necessary start-up inventories and ensuring their availability.
Another major issue with relocating auto plants is the safe movement of equipment. Considering that equipment is such a vital cog in the wheels of an auto plant, its movement is a major aspect in the whole process. Before the relocation, it is essential to carry out a detailed audit that will help reveal which of the machinery is redundant and can be disposed of or which of it can be moved to the new plant. Chances of loss of equipment or damage to it during the move are also a possibility. The project team, therefore, has to ensure all the property, including the company’s plus any clients’ or vendors’ onside property, is properly packed and tracked before, during and after the move.
Covering all the goods and inventory under transit insurance is an important step even if the moving is within the same city. While accidents can still happen, at least the company can seek compensation charges from the insurance provider if the goods are insured. Relocation partners can help in getting a good insurance proposal to reduce the overall risk of the transition project.
When moving inventory which can typically range in 1 Million SKUs (Stock Keeping Unit), it is crucial that the origin and destination tagging of these items are in sync and the ERP (Enterprise Resource Planning) systems have been updated and are ready to handle such a huge volume of record updation.
There is also a chance that some assets or equipment may not be ready for the transition immediately or at the same time. For such parts, there may be a need to find a secondary location where these items can be stored safely. This will reduce their risk of being misplaced or stolen during the complicated journey involving several people and moving parts.
While the actual moving is a prime phase, planning and installation of the new plant layout is another important step in an auto relocation project. The company has to ensure that the entire set up is well equipped and as functional as the old one which is not easy. There are myriad factors to consider since auto plants can have complicated processes with several divisions and teams to worry about. Each one has its own workflows with physical workstation setups that they have perfected to facilitate smooth operations. Redesigning each of these facilities individually to achieve a proper flow is not easy. This calls for strong teamwork between the project team and the stakeholders.
In addition to these physical factors involved in the relocation, there are also several other aspects where the company needs counselling and consultation as well as actual help. Employees, suppliers, customers, and anyone else who may be affected by this move need to be given enough communication.
Employees have to be updated properly so that their morale isn’t damaged. There is need for counselling to be provided to employees to ease them into the whole moving process and make it better for them emotionally as well as logistically. Some project teams have the expertise to manage everything from providing housing for employees, orienting them into the new cities to even conducting group tours of the new city for them.
It’s no small endeavour to relocate an auto plant and facility. There are so many aspects involved in the whole process and they all have to managed carefully. A professional third-party consultant with essential proficiency can be of great help in advising and managing the move smoothly.
Praful Gupta is Business Head - Commercial Moving, Writer Relocations. The company offers domestic and international relocation services for office spaces, industrial facilities and equipment, hospitality and healthcare.
