New technologies impact business operations. Likewise, office complexes, warehouses and manufacturing facilities housing these businesses experience a similar reaction.
A company’s response to facility challenges will influence profitability.
Any building discussion starts with reviewing the existing facility’s operation and life-cycle costs. Pushing a standing structure’s life expectation may save cash today, yet equate to operating at below optimum efficiency. Ten percent of a building’s lifetime cost is in construction, 90 percent is in operating the facility. An older facility not reflecting today’s efficiency in construction pushes that 90 percent line higher.
Properly designed new construction supports operations for decades to come, providing freedom in selecting building size, layout, features and location. Rebranding is also an opportunity, with companies using the fresh physical appearance as a good time to refresh customer perceptions. New construction challenges include time and cost, and if relocation is required, trials in supply and distribution logistics and employee accessibility impact the ledger.
Consider time and urgency of the need. A divisor between openings in busy construction schedules and future inflationary increases (for 2017 between 4 percent to 6 percent) may aid in the decision.
Building remodels in most instances minimize time and cost, creating an efficient existing space. Obstacles include delays and interruptions from existing building use, disruptions to ongoing operations, and no new space added. Add to this the mysteries of older buildings and required items such as fire protection, accessibility, new energy codes and other such items.
In renovation, getting a building “up to code” usually will “up the cost.”
Building expansions provide additional space utilizing 21st century technology with fewer disruptions, yet may leave unaddressed questions regarding functionality in the existing square footage.
It is possible that no facility is perfect for a business, yet in the end, it’s about selecting the approach by balancing needs and results.