1. © Foremost Quality Logistics Confidential 1
How the Site Selection
Game is Played?
September 10, 2013
PREPARED BY:
Tim Feemster
Managing Principal
Foremost Quality Logistics
O: 469-554-9873
C: 214-693-7689
tim@feemsters.com
@tsfeemster - twitter

2. © Foremost Quality Logistics Confidential
What about Site Selection & Using a Professional
• Site selection is both an art and a science, best handled by
professionals
• Almost all companies are risk averse
• Most company employees have never moved a site in their
existing company or even their entire career
• I have done over 100 start-ups in my career, most site
selectors have not done that many
• Many site selection companies have specialties- incentives,
taxes, data centers, etc. but don’t team with others
• You may know more about a subject than the site selection
company. Use this to your advantage?
• Incentives rarely make a bad location a good one, be careful
• We are site eliminators, not selectors
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Teamwork- Team projects like those that come down from the State.
Who is LEADING, who is not committed, are you on the same page?
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Seven Trends Affecting Industrial Site Selection
1. Growing demand in emerging global markets
2. Rising transportation costs
3. Emerging logistics hubs and the expansion of
the Panama Canal
4. Downward pressure on rents, now ending
and a “flight-to-quality” in real estate
5. Opting for more flexibility with 3PLs
6. Navigating more stringent financial hurdles
7. ecommerce, mcommerce, scommerce
Source: Napolitano, Maida (2009), “Site Selection: 5 Trends for the New Economy,”
Logistics Management, Vol. 48, No. 9, pp. 42-47. and Foremost Quality Logistics Logistics
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10%
20%
30%
40%
50%
60%
RentLaborTransportation
0%
50.3%
21.8%
9.5% 7.8% 4.3%
Customer
Service
Admin Supplies Other
2.7% 2.2% 1.2%
Inventory
Logistics Cost Breakdown- 2006
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17.3%
Source: Establish, Inc/HWD & Foremost Quality Logistics

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Logistics Cost Breakdown- 2012
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0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
Transportation Inventory Warehouse
Labor est
Warehouse
Fixed est
Administration Other
62.8%
22.9%
5.9%
3.9% 3.8%
0.8%
PercentofLogisticsCost
Cost Category
14.4%
Source: CSCMP & Foremost Quality Logistics

7. © Foremost Quality Logistics Confidential
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
High Tech Regional
Retailer
Consumer
Fulfillment
Light
Manufacturing
CPG
Manufacturer
National
Retailer
Food &
Beverage
41% 42%
24%
12%
62%
34%
19% 21%
72%
50%
65%
23%
54%5% 4%
5%
5% 5%
2%
6%
29%
19%
9%
8% 3%
9%
2%
5%
14% 14% 12% 16%
4% 4%
Inbound Trans Outbound Trans DC Fixed Inventory DC Variable
Freight, Freight, and Freight, then Labor and Love
Source: CHAINalytics
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%ofSupplyChainCosts
60%
63%
72% 74% 77%
85%
88%

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Data Center Project
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Start With Supply Chain Strategy to Get Leverage
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Source: Gartner / AMR Research

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Location Screening for Industrial/Manufacturing
Let the data lead us. Identify locations by looking at everything at the start instead of
artificially starting with a set of predefined “preferred” or “best-in-class” areas.
First Pass: Fatal Flaws
Screen out locations with fatal flaws e.g. Locations
with insufficient connectivity or high logistics cost.
Second Pass: Major Flaws
Rule out Locations with major flaws e.g. Locations
with key attributes but inadequate infrastructure
like no intermodal, international airport or
seaport access.
Third Pass: Manageable Flaws
Consider Locations that meet all critical criteria
but have manageable issues – flaws that can be
remedied or mitigated through negotiations with
government officials
Preferred and back-up Locations (1-2)
Quantitative Analysis
And Desktop Research
Identify All Site Selection
Criteria
Site Due Diligence,
Qualitative Data
Gathering, and Cost
Modeling
Short List of Preferred
Locations and Sites
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Source: Foremost Quality Logistics

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Business Location Services & Site Selection Process
Phase 1
Strategic Context/ Criteria
Development
Phase 2
Initial Screening
Phase 3
Location Assessment
Phase 4
Field Visits/ Alternative
Development
Phase 5
Negotiation/Selection
Derive location strategy
from business strategy.
Articulate location
threshold requirements
based on critical
attributes for target
metro areas.
Develop preliminary cost
profile to determine
relative emphasis on
critical criteria, including:
•Labor
•Operational
Requirements
•Operating Costs
•Quality of Life/Business
•Operating Environment
•Other
(One day)
Finalize initial decision
criteria threshold
requirements.
Assess initial list of
communities based on
threshold requirements:
•Labor attributes
•Cost structure
•Operating
environment
•Other attributes
Narrow location listing
Primary and secondary
research to prioritize
communities Geo-
variable cost
comparison
Trade-off analysis of
qualitative factors vs.
geo-variable operating
costs
Re-evaluate market
priorities – assess
market factors and
opportunities in relation
to objectives
Confirm occupancy
requirements and
operational issues
Create a short-list of
communities.
Conduct field visits
designed to assess the
following:
•Potential site/building
options
•Incentive possibilities
•Labor market
•Logistics infrastructure
and costs
Identify alternatives &
distribute RFP’s
Analyze proposals
•Present location analysis
& recommendations
Finalize location
preferences:
•Revalidate location/site
criteria and site options
•Site visits for final 2-3
locations
Evaluate/negotiate
incentives
Establish site
preferences
Negotiate lease
Finalize incentives
Maintain flexibility
Manage contingencies
Outcome Outcome Outcome Outcome Outcome
Location strategy and
criteria developed
Initial screening yields
ranking of potential
locations
Final communities
selected for site visits
Multi-market
competition/ Mgt.
prepared to decide
Using multi-market
leverage,
location/site chosen
Final communities
selected for site visits
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Source: Tim Feemster Foremost Quality Logistics

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RFP Critical Elements
• Regionalization will get you more hits
• Correct and up to date data
• Answer all the questions
• Use an appendix to add additional details or elements not
asked for in the RFP
• Site certification can be a real plus or can be a Fatal Flaw-
remember what I said about RISK
• Consistency of message between partners- state, regional,
and local- deviate and it will cost you
• Site tours can make or break the process
• Remember site selection is GLOBAL, not just the US or your
neighboring State/City
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Source: Tim Feemster Foremost Quality Logistics

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UK, Japan/Taiwan, Germany, & Canada are Top US Investors
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Source: Congressional Research Service 2012 & Schneider Consulting

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Manufacturing is the Largest US FDI Sector ($83B in 2012)
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Source: Schneider Consulting

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Relative to US firms in the same Industry, Foreign Company Trends
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Source: US Dept of Commerce 2012 & Schneider Consulting

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Top 10 Site Selection Criteria- Warehouse/Distribution
1. Transportation costs – both inbound and outbound
2. Logistics infrastructure – highways, intermodal, rail, FTZ
3. Labor costs & availability
4. Supply Chain interruption risk
5. Business climate- is there love
6. Rent /lease terms/ownership
7. Taxes & incentives
8. Utility rates
9. CAM charges
10. Access to public transportation- BRAC commute distance up
to 40 mi (80+% of workers in study) Source: Tim Feemster Foremost Quality Logistics
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17. © Foremost Quality Logistics Confidential
Top 10 Site Selection Criteria- Manufacturing
1. Labor costs & availability
2. Transportation costs – both inbound and outbound
3. Supply Chain interruption risk
4. Logistics infrastructure – highways, intermodal, rail, FTZ
5. Utility rates
6. Business climate- is there love
7. Taxes & incentives
8. Rent /lease terms/ownership
9. CAM charges
10. Access to public transportation- BRAC commute distance up
to 40 mi (80+% of workers in study)
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Source: Tim Feemster Foremost Quality Logistics

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What does the Future Hold?
• Mobile social, and e commerce will explode
• Transportation & port infrastructures will be more gridlocked
• Fuel prices will remain volatile & but on average increasing
• Customers will expect faster and more predictable lead times
• Global trade activity will grow, but so will its costs, risks, and
complexities
• There will be more sources of financial and operational risk
• Sustainability initiatives will have greater influence on supply chain
networks, facility construction, and transportation choices
• Ageing populations will create labor constraints in Logistics
• The rules for lease accounting may change the Rent vs. Buy vs. 3PL
decision in some companies
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Source: Tim Feemster Foremost Quality Logistics

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Soon, I am going to be up to my neck in ALLIGATORS - Questions?
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