John Barry & Associates specializes in Facility Planning, Move Coordination, and Industrial Engineering. They help businesses of all types re-engineer their facilities to work more efficiently by improving space utilization and process flow. Their portfolio includes clients such as Titleist, Herbalife Nutrition, Porsche, and many others worldwide. With over 64 years of experience and a team of engineers, MBAs, facility design experts, and project managers, JBA has been able to support businesses facing eminent domain concerns and assist in their relocation.
- Make the most out of a relocation. Bob’s entire process revolves around the concept of “Improve While You Move”.
- Outsourcing the creation of the project budget usually results in additional insights and significant savings.
- Electricity power upgrades can take a surprisingly long time.
- Lighting costs can add up quickly on larger and older buildings that may not have adequate natural light through skylights and tilt wall panel windows.
- ADA upgrade costs can be shockingly expensive when overlooked.
- JBA’s expertise in improving a company’s process during a relocation is usually offset with productivity, lab and efficiency gains.
Justin Smith, Senior Vice President with Lee & Associate’s Irvine office spoke with Bob Barry, the President of JBA, to get his perspective on some of the challenges and opportunities that companies face when relocating to a new facility.
How do you set up a new building while still operating?
We’ll first meet with a client and define their facility requirement which would be the total square footage they need, and then a breakdown of their manufacturing, warehouse, office and varying support areas. Then we get into the three things people ask us for up front: facility requirement, new or existing building, and an initial budget. One of the areas where we provide the most value for clients is by really driving home the concept of “Improve While You Move”. A lot of clients only move a few times in the life of a business. We always encourage them to take a look at new ideas. We may share new ideas that automation companies might share at their industry conventions, so it’s a big opportunity to implement these improvements. We’re not only helping somebody move efficiently but looking at a blank sheet of paper to see how we can improve the process with their current equipment and automation.
People want to improve while they move, but of course, they have a budget. We come in with a budget at X dollars and usually the client will want us to pull it off for less, so we do a lot of value engineering. A lot of clients over the last several years – which I think is pretty powerful – are finding a lot of value when they task us with creating a test budget. If we have one building to look at right now for a manufacturer that makes valves, it might cost anywhere from 10-40% more to occupy due to power upgrades, heavier construction for an office build out, adding dock doors or other issues. Test fits are a way to figure out how it would fit, and then what it would cost to occupy. In some cases, clients really like the different ideas that we’ve provided, but they’ll implement them in phases.
One of the main challenges right up front is time. We have a client right now who really needs to move. They have to be out of where they are currently located in a 6 to 7 month window, but with their heavy manufacturing operation, an ideal time would have been 10 or 12 months. In a distribution center, which we’ve done a lot of, you don’t require as long of a timeline normally due to the fact that the vast majority of the warehouse might just be racking. The key thing is looking at your racking relative to current permits; many clients will look at getting new racking if necessary.
The other thing we really encourage clients to do is look at their power requirements. When you go into a building, you might have a beautiful building that you get very excited about it, but it may have 600 or 800 amps and you may need 1200 or even more. The power requirements are both potentially a cost issue and a timeline issue because then the power departments – whether it’s in San Diego, Orange County, or LA – have a tough timeline. Without knowing, some clients will say, “Oh my gosh, it’s going to take five months to upgrade the power”, so I think it’s really important that people are looking ahead. It’s awesome if they have a year or more, but sometimes it doesn’t work out that way.
If somebody is thinking about making a move, the earlier we can get in the better. A lot of people we help move have been in the same spot for 7, 10, 20 or in some cases, over 40 years. As a result, they have no idea or very little idea of the requirements that they must meet now, like ADA or high pile storage. For example, some of their racking – which is doing a fine job for them now – will not meet the current codes in Ontario, so they may be forced to get a new rack to meet the codes. Or perhaps they’re moving from an 18-foot clear building to a 32-foot clear building and they’ll need updated uprights to maximize the utilization. Whenever possible, we try to get something going earlier than later because the time can be costly.
How is a budgeting plan organized?
The budgeting process is really important. What we try to do is leverage not only our team that has a collective 200 years of experience, but we try to get some real good, solid vendors to support the budget process. For example, if I’m going to build out an office, you can build out an office at a low end of $60 or $70 a square foot or you can go all the way up to $500 or more for an attorney’s office, etc.
One thing that people don’t often think about is lighting. The warehouse may have lighting, but they may have manufacturing and assembly areas that need a good amount of drop lighting or more extensive lighting. The other thing we really like – if we have any say about it – is skylights. We really encourage people if they’re building a building to not only do a good percentage of skylights in the ceiling, but to also use the tilt wall panels as an opportunity to add more light as you’ll see more often nowadays. Some buildings need very little light during daytime due to the skylights and the panels, but if you have to buy lighting and you start taking into account the square footage of a good sized building, you’re going to spend a lot on lighting.
Another thing is, if you get into an older building, then you have to do ramps, ADA, and other issues. People have a hard time getting over the cost to build restrooms. It’s a shocker because they’re relatively small square footage, but have all the plumbing, lighting, and requirements of ADA, etc., so restrooms are another thing that we will often talk about.
One other thing I often tell people that’s really phenomenal but true is, if you want your team to do some new processes, new procedures, and new systems, the ideal time to ask them to consider these options is when you’re making a move. Psychologically, when they get into that new building, they have a wonderful opportunity to try new things. We always emphasize that it’s kind of like moving into a new house. It’s really powerful how many new ideas can be leveraged within the new space.
Another point I make is to put at least a 15% or 20% contingency at the bottom where you’ve studied the heck out of all the different angles of what it’s going to cost. Some people feel like that is a high percentage, but after doing it for 40 years, you find that there’s always some surprises, no matter how much you study or how much you analyze.
One aerospace company had us do a study where they internally looked at what it was going to cost for them to move. They came up with $7.5 million. We came up with $10.5 million to move. Now, they weren’t happy, of course, to hear that, but those numbers were very helpful for the higher ups and making the decision when to move. I find that really good budget data, even though it might surprise most clients, really shows what it costs to move and if they have really good data, then they can make good decisions.
We try to find out how many different ways we can offset the cost of our service. And sincerely, we normally find five, six or seven individual line items that can be blown away from the total cost. One of them is an improved layout. When you take the ideas of the client and the combined 200 years of manufacturing process improvements at JBA, you can brainstorm and go through multiple revisions of a layout, and that in itself, can blow away the costs due to the fact that the new layout will require less productive labor to process the same goods.
Getting assistance from the right group of experts is key. We find that a lot of clients will really get excited about ideas. What they also get excited about is advancements from other industries that they can carry into their industry. We’ll be the first to admit, that after traveling millions of miles and working on small, medium, and large companies, you’re always learning. One of the things we’re doing is sharing the best practices, but if their processes are very specific to them and they want to be protected, of course we’re comfortable signing an NDA and things like that.
We moved a popcorn manufacturer. They were in nine different buildings and moved into one. It was a huge cost to do that, but the efficiency of labor space, inventory, and process flow is now outstanding. People who do move often will really underestimate the cost of making the move, but also underestimate what kind of added value and added productivity they can enjoy.
Do you ever get involved in multiple sites for the same company? Or is it usually an incremental change where you deal with one at a time and then the next?
Both. We do a lot of multiple facilities and a lot of distribution companies.
Porteous Fastener would be one. They sell nuts and bolts, built millions of square feet across the country, and were sold a few years back. They would have plans in all of the major markets and then we would help them, and firms like them, to assess where to place inventory relative to the overall logistics of serving their customers.
We will look at where would be the best spot. We just finished a job that’s confidential, but it was for a large Chinese firm that was looking to manufacture here in the US. We studied their particular industry relative to where suppliers were, where customers were, and logistics. A lot of our work is engineering analysis. The Chinese firm was thrilled not only with the detail of analysis, but also how we demonstrated how Atlanta, for example, beat out Dallas for very specific reasons. On top of all the engineering analysis, we had graphics to show the corporate leaders why, in that case, Atlanta beat out others. The client wants good solid analysis because in this case, they may spend more than $20 million on a big manufacturing plant, so you want to have it in the right spot.
How do you keep track of all your findings?
We use Google Business Drive to manage a lot of our files. It’s a great question because one of the things that I like about our business is we have people like me who have gray hair and we have people who are in their early 20s. The reason I bring that up is that we really continuously improve our project management, reports, and scheduling systems. We do a lot of migration planning which is kind of like a simulated move, so you can watch a move on paper before you do it.
One of the things I think a good consultant does – and the larger ones are just spectacular at it – is build up file tools that can be used with multiple clients. As you build a file of data, facts and information, you can look at most recent similar budgets to see what works and what doesn’t. When we really get into an industry, for example, apparel distribution companies, then we can really drill down into what are the best practices within that industry.
A lot of our work is looking at how can we not only do our work well, but efficiently. If somebody is spending X number of dollars an hour, but we can do it quicker and save the client money, then we’re leveraging our talents more.
How should people think about costs? Is it on a project basis, hourly basis, square foot basis, etc.?
Normally, if somebody is going to move a complex manufacturer, distribution, assembly operation or a combination of the two, we’ll take a look at different steps – the budget, the schedule facility requirement, the layout, the different steps in project management construction – all the way through the move. We’ll have a matrix and we’ll figure out the hours that it takes based on the level of individuals, so you might have someone with 40 years of experience versus someone with 2 years of experience.
We take those hours times the rates, and then that drives the proposal. The higher the level of complexity, the more work is required. We did a ground up heavy duty manufacturer that made aluminum parts and they had millions of dollars of equipment. From the dirt up, the 24-month program, 60,000 square foot plan would be maybe $3 a square foot or $180,000. Now if you had a standard 10,000 square foot distribution center and it was moving to 15,000 square feet, that whole job might be $20,000. Every project is going to be different, but I would say the cost relates to the complexity of the operation rather than the actual size of the facility.
For more information regarding this interview, please contact:
Justin Smith, SIOR
Senior Vice President