Industrial Site Selection: How To Choose the Right Location

Author Justin Fink Read bio
Tags: industrial site
Date: August 19, 2021

Industrial site selection is a strategic decision that usually involves several different but equally important criteria connected to technical, economic, social, environmental, and sometimes political issues.

Therefore decision-making for industrial site selection requires appropriate tools and knowledge to enable data collecting, analysis, and site management to address this complex, multifaceted scenario.

In this blog, I will introduce IPG’s approach for making strategic decisions on choosing the perfect industrial location. Let’s get right onto business.

What Makes a Good Industrial Site?

Just as good location and neighborhood are everything for personal real estate, the same goes for finding the right manufacturing site for industrial needs. Now, how to choose the best location for your business?

Well, I advise you to think through some considerations and opt for an industrial location that will be able to give you the best geographic position to succeed.

Considerations for site selection criteria for industrial buildings:

  • Think about from where and how are you going to source raw materials and workforce
  • How the next industrial site fits into your distribution model and needs
  • How the location of your industrial site will impact your supply chain and the neighborhood in general

A building during contruction phase

Industrial Site Classification – Know Your Niche

It is normal that different industries require different factors. For example, secondary industries are those that take the raw materials produced by the primary sector and process them into manufactured goods and products.

Examples include heavy manufacturing, light manufacturing, food processing, oil refining, and energy production.

The tertiary sector is also a service sector but involves the selling of services and skills, such as health service, transportation, education, entertainment, tourism, finance, sales, retail, etc.

The quaternary sector is made of those industries providing informational services. This can be information and communication technologies, consultancy, advising, scientific research, etc.

What must a factory consider when deciding on a new location?

Accessibility To Materials Used In The Manufacturing Process

While accessibility to materials used in the manufacturing process is of vital interest to the manufacturing plant, sometimes markets may be half a world away from the source of material supply.

If the materials used in the manufacturing process are way too large, heavy, or low in value, it might be advantageous to locate the industry as near as possible to the source of the material. This can also reduce the exces­sive costs for transporting your items.

Environmental Protection and Industrial Location

The protection of our natural habitat is another, very important manufacturing site selection criteria. How to choose a location for business if not in alliance with environmental requirements. Here you have to consider these factors:

  • Wetland studies
  • Threatened and endangered species review
  • Geotechnical review
  • Cultural resources review

Industrial pollution is one of the major causes of air pollution, which further creates an imbalance in the ecosystem.

At the same time, industrial processes have negative environmental impacts, causing climate change, loss of natural resources, air and water pollution, and extinction of some species.

Poorly chosen and uplifted industrial site selection is a threat to the global environment as well as economic and social welfare.

Industrial contruction site

Transportation Infrastructure

Transportation is one of the largest costs in the industrial sector, taking from 45 percent to 70 percent of the gain. Most of that is the cost of shipping goods from the warehouse to customers (namely to households) rather than getting goods from a port to the warehouse.

This is why it’s so important to position your business and industrial site as close to a large population center of customers as possible.

You need to get materials in and product out, so the transportation options at your site also have important consideration such as:

  • How close you’ll need to be to major interstates and highways
  • Does your site needs to be rail-served (and if so, whether rail infrastructure exists or can it be developed at your potential industrial site)
  • Do you have the transportation infrastructure you need? And if not, how much will you need to invest to build it?

Indus­trial location for manufacturing plants tends to be sited where a variety of readily accessi­ble transport choices are generally available.

Transport facilities thus are the im­portant links that bridge material supply and reach the market. Railroads, highways, ports, and air­ports close at hand are important considerations for the location of industries.

Choose the Right Industrial Site With IPG

The process of choosing a location for a warehouse, fulfillment center, or manufacturing site has gotten significantly more complex in recent years amid the rapid rise of e-commerce and strong competition for labor.

Finding the right industrial site takes time and consideration, but knowing the right questions to ask is a helpful place to start. If you’d like a little extra guidance, get in touch and we’ll connect you with an expert who can help.

IPG offers site selection service and advising for users that look for warehouses and other industrial real estates and their perfect locations.