Factory Relocation Dos and Don’ts: Guide For Successful Transition

Factory relocation can be tedious and tiring. Fortunately, you can simplify the process by following the Factory Relocation Dos and Don’ts guide or having the right partner like CE Interim by your side. When done properly, it can prove to be the best decision for your business. If not done right, companies are vulnerable to unnecessarily high expenses, downtime, and hindered growth.

Many companies are moving to strategic locations such as Eastern Europe, the Balkans, Asia, and the Middle Eastern regions that offer reduced operational costs, a skilled talent pool, favorable regulations and conditions, and other key benefits.

If your company is also planning to relocate the factory or logistics to a different location, whether a new region or homeland, this blog post is meant for you.

In today’s blog, we will explain the crucial Factory Relocation Dos and Don’ts that will help make the process seamless. Let’s get started!

What is Factory Relocation & Why is it Needed?

Factory relocation is a tactical business process where a company moves its manufacturing unit from one geographical location to another. The purpose of this movement is to utilize the benefits offered by the new location to improve operational efficiency, simplify their supply chain, reduce expenses, and eventually, boost the business.

There are two types of factory relocations:

• Off-shoring
• Re-shoring

Offshoring refers to moving the manufacturing plant to a different country while reshoring is the process of bringing production back to the company’s home country.

Countries like Slovakia, Poland, Hungary, Romania, and Serbia, to name a few, offer key benefits such as inexpensive resources and labor, a skilled talent pool, and a favorable business environment to help companies operate smoothly with greater efficiency. That’s why companies are moving their factories to these regions.

Dos of Factory Relocation

Here are the Dos to follow before, during, and after factory relocation to a strategic location:

1. Perform Thorough Planning & Strategizing

Your company should spend a sufficient amount of time to plan the process entirely. The more time you allow for strategizing and risk assessment, the more will be your chances of a successful transition. 

There are an overwhelming number of factors you’ll have to consider which require a good amount of time to counter. You can also build a schedule and set milestones for the transition to ensure machinery and equipment are moved in a way that there is the least downtime. That’s why you should leave the process to professionals. 

2. Have a Comprehensive Cost Analysis

You have to assess all potential costs involved in relocation such as real estate, transportation, installation, recruitment, etc. to make proper estimates. You may also need to incentivize your staff for the additional efforts they will put in throughout the process.

Furthermore, you must give special focus to hidden costs like downtime, employee relocation, and disturbed business processes while planning the move. It’s wise to understand that relocating operations and expecting cost savings from day one is a road to nowhere

3. Involve Key Stakeholders Early

Involving key stakeholders from the beginning will help ensure a seamless transition of your operations from one place to another. You should deploy effective communication strategies to keep everyone informed and avoid unforeseen circumstances.

4. Select the Tactically Right Location

You must select the right location to relocate your manufacturing unit. To do that, assess all the factors involved with the movement, check what your business requires, and shortlist several locations that check the boxes. 

Focus on infrastructure, labor market, regulations and tax rules, operational costs, and other relevant factors to finalize the perfect location. Countries in Eastern Europe and the Balkans have proved to be the most strategically good options for businesses recently due to their favorable regulations, skilled workforce, lower operational costs, and proximity to key markets.

5. Ensure Compliance with Legal and Regulatory Requirements

It’s crucial to understand the local laws and regulations before finalizing a location to relocate. Following this, you should ensure the compliance of your company with them to avoid legal hurdles and pitfalls. 

You should also consult with local experts to be conscious of the regulations. Additionally, there are some unsaid rules in every region for cultural sustainability that you shouldn’t ignore.

6. Develop a Solid Risk Management Plan

Identifying potential risks and roadblocks early and deploying appropriate mitigation strategies in place will help you complete the transition smoothly. Unforeseen circumstances are imminent as factory relocation is a tiresome process. 

You must have a contingency plan, such as seeking help from interim professionals, especially if your company is going through times of crisis.

7. Maintain Clear and Open Communication

You must develop and follow clear communication strategies with employees, suppliers, and customers to avoid potential shortcomings, risks, and hindrances. Maintaining transparency and providing regular updates to everyone, especially key stakeholders is crucial for the transition.

8. Minimize Operational Disturbances to Reduce Downtime

You should create plans focusing on minimizing disruption to operations as it will help you maintain production during the transition and avoid high downtimes. A phased relocation approach and having backup plans can be an effective way to tackle disruptions, reduce downtime, and prevent financial losses.

9. Conduct a Post-Relocation Review

Once the relocation is complete, it’s essential to evaluate its success, identify emerging issues, and resolve them timely. You have to assess areas for improvement and put forth plans to overcome the shortcomings. 

10. Hire a Professional Interim Manager with experience in Factory Relocation

Hiring a professional interim manager with extensive experience in factory relocation is a strategic decision that can significantly impact the success of your transition. Look for a company with a proven track record in handling complex industrial relocations, as well as a verified talent pool of industry experts who bring a wealth of knowledge and practical experience to the table.

They are adept at developing custom relocation strategies tailored to your company’s unique requirements, ensuring that every aspect of the move is meticulously planned and executed. From coordinating logistics and managing timelines to overseeing equipment dismantling, transport, and reinstallation, they can ensure minimal disruption to your operations.

Their ability to foresee potential challenges and implement proactive solutions helps mitigate risks, while their leadership ensures that all team members are aligned and focused on achieving a seamless transition. Professional relocation managers can transform the daunting task of factory relocation into a streamlined and efficient process, thus ultimately safeguarding your business continuity and operational efficiency.

Don’ts of Factory Relocation

Here is a list of Don’ts you must follow throughout the factory relocation process

1. Don’t Rush the Planning Process

You must never rush the planning process while relocating your factory to a different location as it increases the chances of potential risks, leads to excessive disruption of operations, and devoids you of the time to consider all essential factors.

2. Don’t Underestimate the Costs

Never underestimate the costs that are commonly overlooked during factory relocation. Having a comprehensive budget in place alongside contingency funds can help you complete the transition seamlessly.

3. Don’t Ignore Employee Concerns

Factory relocation has a big impact on employees and it’s natural for them to develop concerns. You should never ignore them, follow clear and open communication, and have a support program in place. 

4. Don’t Neglect Supply Chain Considerations

Factory relocation will have a key impact on your supply chain and you should consider its associated factors. There should be strategies for maintaining supplier relationships and logistics efficiency, and if they are neglected, operations will be disturbed.

5. Don’t Forget to Update Your IT Infrastructure

Your relocation plan should not ignore the importance of updating IT infrastructure according to the new location. It’s essential to ensure data security and system continuity while moving.

This completes our guide on Factory Relocation Dos and Don’ts

Final Words

These are the key Factory Relocation Dos and Don’ts your company should follow. Careful planning, communication, and risk management can ensure a successful transition and keep your operations prospering.

Strategic planning and execution can help your company reap the maximum benefits of relocation. However, it is not easy to make your move successful without opting for professional assistance.

When it comes to factory relocation to Eastern Europe, CE Interim is the partner you can rely on. Our expert team offers complete, end-to-end solutions, making the entire process smooth and worry-free. We take care of every detail, so you can remain focused on your business.

Let our customized solutions ensure your relocation’s success. Contact us today to see how we can assist with your factory move.