The good scenario: Your product has become so successful that you need to build a new, additional production facility to both increase your production and allow for better coverage of another market area.
The more common scenario: You want to move your current production facility to a place that can run with lower overhead, utility, and manning costs.
Either way, this should be a piece of cake. You’ve already refined your process, determined which equipment works, and have built up a knowledge base at your current facility. All you have to do is use the current plant as a model for the new plant, and you’re done.
Then you hit the on button at the new plant, and find that you can’t make any product. Or it isn’t in spec. Or you start seeing way too many people complaining of complications and body stresses and strains you’ve never seen before. If you’re lucky, it seems like you’re repeating the same mistakes and headaches that you moved past long ago at the old plant. If not, you’ve seemed to have moved backwards. And to top it off, you don’t even have Bill Murray around to make it funny. What happened?
To put it short, you treated the project to build a new facility as if it were as simple as running a copying machine. But even copying machines get jammed. The mistakes I’ve seen:
1 – Garbage In, Garbage Out: Moving to a new location likely means changing raw materials to a local source. It might be “just as good”, but it will be different. Impurities matter, not only the level, but their makeup. I’ve seen projects spend millions trying to react to the fact that they were originally designed for a different feedstock, only to end up as a complete write-off a few years later.
2 – You Can’t Copy What You Don’t Have – Your documentation isn’t as good as you think it is. Yes, you have all the original files and specifications for each piece of equipment you bought when you built the first plant decades ago. But you didn’t update the files as frequently as you updated the equipment. As you expanded the business, you had to work around the pinch points in the design, and slowly rebuilt the plant. Off-shift maintenance got sick of always repairing the drive that constantly failed, so they upgraded it on their own. Your operating procedures soon developed shadows that resided only in the heads of those who used them.
3 – I Used The One Labeled “Abby Normal” – Since brain transplants have been perfected yet, you have to rely on Knowledge Management to get the years of experience built up in the heads of all the employees at the original plant into the heads of the new plant. Take the frustration of training one new employee in a plant of veterans, multiply it by the number of employees, then multiply it by, I don’t know, say 1 million, to see how hard it will be to get an entire new crew up to speed. If it’s an expansion, you might get a few people at the old site transfer over and act like a starter dough does when making sourdough bread. If your shutting the old plant down – be ready to have some bad information passed along by your employees on their way out the door to the unemployment line.
4 – We can build it faster, stronger. We have the technology – Why copy something when you can improve it? Because nobody ever thinks that their “improvement” has a cost or trade off. Soon, you can find yourself in a shootout between the “experts” who are tied to the methods of the old plant and take offense to the thought that the new guys just waltz in and tell them they’ve been doing things wrong all their lives, and the new guys who can’t credit the team that is being replaced with having any common sense – after all, if they knew what they were doing, why is this project going on at all?
5 – You Can Lead A Horse To Water… – Lastly, and it always is considered last in these projects, is getting your customers to accept the new facility. Nobody wants to deal with change, especially if there is no real upside to them. You’ve moved production to save costs, but your customers won’t see that money, they’ll just see the hassle of having to audit and approve the new site. And deal with the supply headaches your startup hiccups give them. And if you don’t think your announcement through completely, you’ll find out too late that you sold your old facility down the river in an effort to generate customer buy-in (“We are building a new state-of-the-art facility to ensure quality production that we haven’t been able to in the past”) and burnt any bridge back to return production to the way it was when the startup goes even worse than I’m expecting.
I’m not saying you have to stay where you are today – you probably can’t. But you have to treat a copy-cat project as seriously as a new design development.