DEAL Zone :: Articles
Site Selection: A Whole New World
by Melanie B. Avner, Plant Site Locations, Winter 2001
This article is also available on the Plant Site Locations newsletter website.

NAM's new partner, DEALTEK, offers an innovative solution to ease the site selection process for growing manufacturers. Putting a trained staff of site selection professionals and an enterprising pair of software approaches to work on your behalf, DEALTEK will put you in the driver's seat as you manage your company's expansion.

In the world of site selection, there are often so many pieces to the puzzle that even the most seasoned manufacturing executives must enlist the help of an outside party to ensure a successful site search. For more than two years, the NAM Site Selection Network (SSN) has been helping National Association of Manufacturers member companies gather valuable information on sites and communities for their relocation or expansion efforts. Now, through a special arrangement with DEALTEK, Ltd.—a technology-driven development, expansion and location consulting firm—NAM members have access to services that, in conjunction with the SSN program, will help ensure an expedient, cost-effective search process.

Dealing with the Data

Once your company has decided to make its move, the SSN can provide you with the data you’ll need to begin evaluating different sites and communities.

But let’s back up a few steps. What if you’re not sure whether your company should undertake an expansion, relocation or similar capital investment project in the first place? How can you be certain the parameters you give the SSN are appropriate? And once you receive the SSN report, how will you know which aspects should be the subject of your focus, or how to effectively analyze the information?

Enter DEALTEK. DEALTEK has a complete range of services and technology tools to help your company determine the best option among the possible capital investment scenarios. DEALTEK consultants will help you forecast the results of your decisions through sophisticated modeling, define the optimal decision for your company, and implement it as efficiently as possible.

DEALTEK will work with your company to determine whether operational or facility changes are needed to achieve your corporate strategy and objectives. If such a change is called for, DEALTEK will help you determine whether your company should engage in a location selection (a country, state or county) and/or a site selection (a specific piece of raw land or an existing building) initiative. If your company decides to pursue a location and/or site selection, DEALTEK’s professionals will assist you in identifying your search requirements so you can effectively use the SSN’s data-gathering system. And when you receive the SSN report, DEALTEK will enable you to evaluate that data using its proprietary software technology. With this technology, you can actually model the bottom-line results of the choices that the SSN has presented for your consideration. In addition, DEALTEK will handle communications and negotiations with community and state officials, property owners, utilities, contractors and lenders on your behalf. And as an NAM member, you’ll receive any or all of DEALTEK’s services at special preferred rates.

“NAM members now have access to DEALTEK’s consulting services from the start,” says Ellen Davis, executive director of the NAM Site Selection Network. “DEALTEK has developed revolutionary site-search technology that will take the entire process to the next level. By examining the data we’ve gathered and helping the manufacturer find the best site based on its specific needs, DEALTEK is opening a new world of site selection to NAM members.”

The Technological Tools

Through its software programs, called DEALS (Development, Expansion and Location Solutions) and Expert DEALS, DEALTEK will help you analyze all of the information the SSN provides based on your business priorities. For example: If close proximity to rail service is more important to your company than labor costs, but less critical than tax credits, DEALTEK’s DEALS and Expert DEALS can electronically compare the information from the SSN report to find the best site based on those needs.

Both DEALS and Expert DEALS are powerful decision-making tools, but there is a major difference between the two. DEALS helps a company arrive at the optimal decision using objective, quantifiable information based on your company’s business needs and the SSN search results. DEALS can model the start-up and future costs of the different alternatives and can calculate the impact of any offered or desired economic incentives.

"By examining the data we've gathered and helping the manufacturer find the best site based on its specific needs, DEALTEK is opening a new world of site selection to NAM members."
-Ellen Davis, NAM

Expert DEALS performs the same functions and takes the process one step further. The software can assign value to subjective criteria, such as your company’s preferences and corporate philosophy. Expert DEALS takes into consideration your company’s “gut instinct” about a particular area and makes it quantifiable.

All of your company’s needs are taken into consideration and weighted appropriately. The result is a decision that’s not just right for your company, but as close to your ideal as is practical given your company’s time and budget constraints.

Here’s how Expert DEALS works. DEALTEK enters all of the community and state information provided by the SSN into the Expert DEALS database. Corporate-level and project-level information, such as your company’s prioritized business needs, also are entered into the database and further factored into the program. Expert DEALS will quantify “soft” issues such as preferred climate, quality of life indicators and your company’s subjective “wish list.” Next, the program combines those soft issues with the “hard” issues, such as tax incentives and labor costs. Expert DEALS then compares all of those elements with respect to each potential location, site and other transaction alternative under consideration. Finally, based on all of the company-specific variables, Expert DEALS extrapolates the data in order to calculate the optimal choice.

The Real World

Cooley Inc., a Rhode Island-based manufacturer of specialty reinforced polymer membranes, enlisted DEALTEK’s help when sales growth created a need for greater capacity for its coating and extrusion operations. According to Don Harris, Cooley’s chief financial officer, Cooley’s first step was to ask DEALTEK to gather information on the company, critique its current search strategy and provide input. “We wanted it to be an interactive process with DEALTEK,” says Harris. DEALTEK engaged in extensive interviews with Cooley executives to determine the company’s site-search criteria and business needs.

Armed with the detailed, specific information supplied by DEALS or Expert DEALS software, site-selection executives get a clear "big picture" of a site's impact and opportunity.

The SSN then provided critical data on more than 20 potential sites. By creating a list of pros and cons, as well
as projected costs for each site, DEALTEK was able to help Cooley narrow its site search down to two possible candidates.

At this point, DEALTEK began negotiating with the communities. “DEALTEK went out and tried to negotiate the best deal for us from an economic perspective,” says Harris. “That involved interfacing with all the appropriate state, local and federal economic developers, tax officials and regulatory officials. A lot of detailed information gathering goes on in that phase, and there’s a myriad of questions and answers that have to be reviewed at a very detailed level.”

According to Harris, DEALTEK was able to provide Cooley with access to information they otherwise would not have had, an advantage that made a real difference in the negotiations. “They’re sitting in front of these economic development officials, and they know what deals have been given to other like situated companies in the area,” said Harris. “That’s a level of research that your average planning person doesn’t have.”

Before, during and following the negotiations, DEALTEK presented Cooley with an economic analysis of the two potential sites. DEALTEK was able to tell Cooley what its total cost of doing business would be in each particular area, both with and without the outcomes of the negotiations.

According to Harris, that was invaluable to Cooley. “I can’t emphasize that enough. It’s not really, ‘what goodies did I receive from the economic development officials,’ it is: ‘what is the total cost of doing business,’” Harris notes.

Harris reports that DEALTEK’s software ultimately enabled his company to make the decision between the two sites, which distinguished DEALTEK from other consulting firms. Using the software, DEALTEK and Cooley were able to plug in several different variables and calculate the consequences of the different “what ifs” of site selection in order to choose the best site. Then, together, DEALTEK and Cooley negotiated and secured the optimal scenario.

Harris describes what could happen when companies do not enlist the help of a consultant or outside party. In addition to the possibility of missing out on key incentives and tax credits that could be identified and negotiated, Harris explains that companies can easily be caught off-guard when it comes to the political climate in the new community “We had some minor political issues with our project that DEALTEK was out ahead on, and we’re thankful for that,” Harris points out.

Based on his experience, Harris further described the value of employing the assistance of a firm like DEALTEK. “If you’ve never done this before and you’ve never seen how effective this process can be—utilizing the right person and the right approach to finding and negotiating the incentives—you probably don’t realize how much money could be left on the table from a negotiation viewpoint, and how complicated the decision-making process can be. Each company has its own requirements, but when you put them all together, it’s important that they be analyzed properly in order to come up with the right location,” Harris explains. With DEALTEK’s help, Cooley Inc. found the best location for its new facility and will soon begin construction.

Above and Beyond

The individual pieces of any puzzle can only be appreciated when they are placed together to create a final image. Similarly, the various components of a site selection project cannot effectively operate independently of one another. DEALTEK and the NAM Site Selection Network each have their own niche in the site selection process, and together they have developed an integrated system through which they help guide NAM members through every critical phase of their site searches. The goal is to create the best possible economic outcome for your company and your new or expanded facility. By putting this powerful tandem to work for you, DEALTEK and the SSN will help the pieces of your site selection puzzle fall right into place. -PSL

For more information on DEALTEK Ltd., contact Rhett L. Weiss, chairman, or Chuck MacCary, president, at 703-442-4860. For more information on the NAM Site Selection Network, contact Ellen M. Davis, executive director, at 800-790-4010.

DEALTEK, DEAL Zone, DEALS, "Development, Expansion, and Location Solutions," Expert DEALS,
and "Turning Decision Choices into Choice Decisions" are registered trademarks of DEALTEK, Ltd.
The DEALS ® software program and the method of using it are covered by US Patent Number 7,640,196.
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