Case Study

Industry: Supply Chain

Region: South Central United States

Assignment:

1. Identify a market with a strong employment base in which to locate regional flagship distribution hub for a company experiencing rapid growth in the south central United States.
2. Locate an existing facility or build-to-suit opportunity within this market that is strategically positioned to service existing clients and able to accommodate aggressive growth as company expands over the next 36 months.

Approach:

• Meet with the client to discuss locations of existing customer base and future growth markets. Based on this conversation, identify a major metropolitan area on which to focus the search.
• Initiate a transportation study to identify traffic patterns within the chosen city, taking into consideration current and planned development projects that might impact future transportation in the area. Based on the transportation study and the client's timeline for growth, narrow geographical range to a few key areas centrally located within the metropolis.
• Perform employment demographic study to ensure that the client could draw from a substantial regional employment base. Also create a map of routes likely to be taken by commuters to ensure employee satisfaction and retention.
• Contact federal, state and local governments to identify tax credits and incentive packages available to new businesses. Simultaneously, begin working with architects, engineers and general contractors to design a facility based on the client's needs.
• Identify 4 ideal sites and propose to client. Based on client response, negotiate with representatives from 2 facilities to obtain best possible terms.

Outcome:

The client ultimately selected a building that was less than 10 years old, centrally positioned within the region and located in an area that had recently completed infrastructure improvements, making transportation problems unlikely in the near future. SRC was able to leverage the recent construction to gain two additional advantages: reduced occupancy allowed SRC to negotiate extremely favorable economic terms, and expected growth in the newly improved area provided the client with ample opportunity for employee recruitment. Due to SRC's efficiency, the client was able to open the facility even earlier than planned. The facility was a great success, and now serves as a model for all of the company's new distribution centers.