Global competition is putting companies in a pressure cooker, forcing them to reduce costs and reassess their supply chain strategies—and making distribution increasingly important to a company's economic success. It makes sense, then, to position warehouses and distribution centers (DCs) in optimum locations.

Identifying the best location for warehouses and DCs can be a time-consuming and complex assignment. Many different factors come into play, and shippers must consider and compare a long list of facts and figures when making the choice.

It's a daunting task, but there's no need to go it alone. Site selection consultants, economic development agencies, and developers of distribution centers and industrial parks are all eager to help. It's important to keep in mind, though, that although these parties offer useful advice, they're not all unbiased.

In the early days of a search, companies usually do not want the localities they're considering to know they are looking at them. That's why many hire consultants to anonymously gather information.

Many site selection consultants today identify the most geographically advantageous locations by using software to model transportation and distribution patterns and customer locations. They then investigate the specific advantages and disadvantages in terms of cost, infrastructure, and labor of individual communities within those areas.

The consultant may search for many months, collecting data from dozens of communities and measuring those findings against corporate-established criteria. They typically organize all of the relevant information in a matrix format so individual factors can be compared.

In addition to conducting location research, consultants can advise shippers on negotiations with real estate developers and local governments. They also rely on their past experience with various town, county, and state governments to guide their recommendations.

Site selection consultants often are assumed to be neutral and objective. But some may tend to favor certain locations or facility developers, so it's up to the shipper to carefully evaluate consultants' recommendations. (One place to start a search for site selection consultants, by the way, is the International Economic Development Council's directory of websites, at www.ecodevdirectory.com/siteselections.htm)

One of the main reasons state, regional, and local economic development agencies exist is to bring new business (and jobs) to their areas. Accordingly, they tout their geographic advantages, labor force, transportation services and connections, cost of living, and so forth—all with an eye toward making their regions as attractive as possible.

It goes without saying, then, that economic development agencies are biased. But that doesn't mean shippers should bypass them altogether. In fact, these agencies have much to offer, and shippers can and should make the most of their services—as long as they keep that inevitable bias in mind.

A key advantage of working with economic development agencies during a site search is that they can provide data for a wide geographic area. These agencies work with local and state authorities to gather comparative data on such topics as utility costs, taxes, quality of life, and transportation infrastructure, notes Greg Brownstein, marketing vice president for the Piedmont Triad Partnership, which represents 12 counties surrounding Greensboro, N.C. "An organization like ours ... can be a single point of reference where companies can gather information, rather than having to approach 12 separate economic development agencies," he says. Continued...

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