Relocation Vademecum

What you need to know about relocation… before you start asking questions.

When the relocation involves a single piece of equipment or a group that does not constitute a strategic technological base for the plant, the task for an experienced relocation company usually does not pose a great problem, and the organizational planning is quite simple. The main role, as in any case, will be played by the contractor’s experience (both their own structures and external suppliers) and the available equipment and personnel resources.

Apart from minor movements to supplement the machinery park, production relocation, i.e., the relocation of machines, equipment, production lines, and technologies, has become a natural element of investment, optimization, and efficiency improvement processes. For global manufacturers operating in technologically and economically diverse markets, it is one of the most important elements of business model organization, permanently embedded in the investment process. In general, why do we relocate equipment, production lines, and even entire factories? There are many individual reasons, but recently we have observed several leading trends in this area:

• Moving in relation to the demand/supply of the product in the market and derivative market conditions – mainly applies to global manufacturers.
• Consolidation of production centers – there can be many factors here, but investment consolidation combined with product optimization usually dominates.
• Comprehensive sale of market product – know-how and material technology.

When we are not talking about individual devices but about relocating technological clusters or entire production processes, each of these cases is a significant organizational and execution challenge for the investor, and proper preparation for the relocation process is one of the decisive elements for the success of the entire project. Especially when the task is carried out during ongoing production. In such cases, we face many more challenges than when installing completely new technology, as time is often the key. It is worth noting that in projects where the realization time (or rather, the time for restarting production) is crucial, planning should involve an experienced practitioner/planner in similar projects. The best solution here is to engage relocation industry professionals and assign them a comprehensive operational plan or its specific scope.

When we are not talking about individual devices but about relocating technological clusters or entire production processes, each of these cases is a significant organizational and execution challenge for the investor, and proper preparation for the relocation process is one of the decisive elements for the success of the entire project. Especially when the task is carried out during ongoing production. In such cases, we face many more challenges than when installing completely new technology, as time is often the key. It is worth noting that in projects where the realization time (or rather, the time for restarting production) is crucial, planning should involve an experienced practitioner/planner in similar projects. The best solution here is to engage relocation industry professionals and assign them a comprehensive operational plan or its specific scope.

1. Estimated realization time vs. client expectations
2. Terrain and logistical conditions at both locations (disassembly and assembly)
3. State of technical preparation, especially the media facilities of the new location
4. Evaluation of the new layout or, if not available, development of the placement/layout plan
5. Specific nature of the relocated technology/industry
6. Non-relocation determinants to be performed during the relocation
7. Initial calculation and budget preparation
8. Selection of the contractor (if the advisor/planner does not have their own facilities)
9. Formation of a joint implementation team
10. Relocation plan (implementation)

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The implementation plan for a large relocation project should be developed well in advance. Of course, this depends on the scale of the operation, but most leading trustworthy contractors of strategic projects require at least a 12-month time reserve. It should be remembered that many factors can affect the realization time: difficulty scale, logistical conditions of the area, production safety zones, access conditions, work at specified hours, rules for performing so-called high-risk work, “hot” work, etc. It is important to identify these factors as early as possible together with the contractor. Remember that the contractor evaluating and planning the operation has a set of tools that can accelerate the realization: preparatory work before the so-called “machine break” (production stoppage), increasing executive resources, multi-shift work, staged realization, use of non-standard equipment, etc.

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Terrain and logistical conditions at both locations
Assessing these conditions is an important organizational and calculation factor. Preparing and securing the so-called relocation routes in most cases falls within the contractor’s scope and does not pose a problem for an experienced company, but the existing condition has a significant impact on the price and realization time. Attention should be paid to the physical possibilities of passage – widths, heights of openings in rooms, floor load capacity, outdoor terrain conditions, etc.

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State of technical preparation of the new location
Connecting the equipment to the so-called supply or process media can be a significant part of the entire project. For example, planned existing installations should be thoroughly checked against the new machinery park requirements without compromises. However, it is worth realizing that newly built media installations not only ensure efficiency but also provide the possibility of expansion and ease of maintenance. In both cases, safety and communication conditions, current standards, and legal regulations should be taken into account. If media sockets have already been prepared, for example, by the developer, their state should be compared to the finally accepted layout of equipment placement regarding their distance, type, and adopted standard – too large differences will constitute an additional cost factor for the relocation contractor. If no installations have been prepared, their execution should be entrusted to the entire relocation contractor. This allows avoiding misunderstandings “at the junction” and misunderstandings resulting from the division of responsibility.

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Evaluation of the new layout/placement plan
The plan for the new arrangement of equipment and production organization must take into account infrastructure conditions, logistical organization, equipment sizes, and technological process conditions. New planning also provides many optimization benefits – using the experience of the previous production organization, we can “improve” it by eliminating many losses related to logistical processes, stock locations, etc.

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Specific nature of the relocated technology/industry
Today, the market for relocation service providers includes small, medium-sized companies and those for which even a very large-scale task is not a barrier. When choosing a contractor, it is worth evaluating not only their economic, technical, and organizational potential but also unique experience in a given location – installing a factory in Asian conditions is different from doing it in Europe. The second important element is experience in a specific industry. The portfolio of implementations for the locksmith or metallurgical industry does not guarantee success in tasks for the pharmaceutical or aerospace industry. Of course, the transfer of equipment itself is a similar process, but the preparatory, protective process, as well as start-up, acceptance, and production permits – are decidedly different.

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Non-relocation determinants
The relocation operation is often an organizational and structural “revolution,” but above all, it is a temporary stoppage of production processes. The time without production does not have to be unproductive. For the investor, this is an opportunity to use the team for maintenance work, cleaning, painting equipment, housekeeping, or securing the “old” area. The investor’s maintenance services perform minor repairs, modernizations, overdue service work, documentation updates, etc. Sometimes these are not necessary tasks within the investor’s purview. Then this falls within the relocation scope. Additionally, there are new start-up conditions imposed by legal regulations, including adjusting the electrical supply to current regulations, testing (in particular) the effectiveness of protection against electric shock (a protocol must be created), adapting the equipment to the so-called minimum health and safety requirements, machinery directive, and possibly tool directive.

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Initial calculation and budget preparation
In the case of relocating single devices or small production areas, budget calculation is not a difficult task for the investor, if only due to the small scale of the planned operation or the experience of similar tasks carried out in the past – it is good to use the comparative method here. A much greater challenge will be preparing the budget for a large project of a comprehensive relocation of an entire plant. Here, the best solution will be to use consulting services or conduct a so-called preliminary tender action. A budget verification audit performed by experienced specialists will allow a multifaceted view of the project and minimize the risk of “overshooting” the budget.

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Selecting the right contractor
The advising entity does not always have its own executive facilities, but the investor does not have to implement the relocation project with its author. It is important, after completing the preparation process, to create a proper inquiry in terms of scope and subject matter. The assessment of responses, i.e., offers, should primarily include the scope included in the main price, the course of implementation divided into stages, and an indication of the estimated amount and type of dedicated resources (equipment and personnel). In the content of the implementation conditions, it is worth paying attention to the declared realization time in working days, payment stages, and exclusions, i.e., the “offer does not include” formulas – here surprises often appear that require clarification. Even the best-developed plan cannot predict everything, so the offer should include a declaration of readiness to perform additional work not included in the scope with the rate and settlement methods specified by the contractor.

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What next after selecting the contractor
The first stage of joint action with the contractor is conducting an audit to prepare a detailed implementation schedule for the project. It is also advisable to create a joint permanent implementation team whose first task will be to assess the audit results, imposing specific and verified relocation processes on the main implementation schedule, production plan, modernization plan, or other planned timing requirements.

What else should we expect from the relocation contractor? Here are a few important issues necessary for the investor:

• Preparing, preferably in the form of a presentation, the “relocation plan,” including, among others, responsibility structure – indicating persons responsible for individual processes on both sides, implementation schedule stages, templates and documentation flow, supervision plan for fixed assets.
• Preparing a risk assessment and backup plan.
• Plan for relocation routes and temporary storage areas.
• Insurance – in the general scope of civil liability, but indicating that these are services related to moving, loading, unloading, and installing machines. (an additional securing tool may be a project-dedicated policy guaranteeing direct flow of compensation funds; if road transport is involved in the relocation process, cargo insurance will also be required).
• Cooperation in setting up equipment according to the provided layout.
• Specifying the method of equipment marking.

A relocation project, especially one related to moving an entire technological process or stopping production, requires very good organizational and planning preparation from the investor – undoubtedly a difficult task. There remains the entire process of physical transfer and effective re-startup. And these tasks should be performed by professionals. Therefore, the selection of the contractor, apart from the price, should take as a fundamental criterion the answer to the question: What is their experience? (here, references) and are they capable of doing it? This will allow us to avoid the “unfinished highway” effect and thus losses.

Sebastian M. Gawron

CEO / SURET