Manufacturing Expansion Analysis

CASE STUDY:


MANUFACTURING EXPANSION NEED:

RIVERSIDE MACHINE AND ENGINEERING


SITUATION: Growing manufacturer was at capacity in current facility and was considering adding on to existing facility. Before moving forward with the expansion they consulted with KW Commercial / Envision for a third party opinion.

DISCOVERY: Our analysis determined several important factors;

  • Even after expansion the facility would work for Riverside’s operation but would be more of a band-aid than an efficient fit for their operation.
  • The expanded facility would again be outgrown in the 5 years or so.
  • The cost of the addition would far exceed the expected disposition value in 5 years when they would need to move again (no more room to grow on site).
  • The inefficient layout and largely unchanged impression of the facility would not appeal to the higher level clientele they were pursuing.

SOLUTION: We were tasked with coming up with a solution. We were able to find an existing property that did not meet Riverside’s initial search parameters but it proved to meet and even exceed their larger objectives:

  • We were able to find them a World Class manufacturing facility that would resonate with both existing and targeted medical and hi-rel customers.
  • This new facility was 2X the size that was needed or planned with the original expansion, and therefore excluded from consideration originally.
  • Through our strong relationships and effective negotiation, Riverside was able to acquire the property at effectively the same cost as their originally proposed addition, and even less when pulling out the disposition of their existing facility.

CONCLUSION: KW Commercial / Envision was able to help Riverside solve their space shortage dilemma, while stepping up into a true World Class facility that will meet their growth needs for many years into the future. This was done at a net cost lower than what they were expecting for the original expansion plan. Riverside has reported significant gains in manufacturing efficiencies as well as new customers and deepen relationships with existing customers.