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The Speed Imperative: Life in the SiteSelection Fast Lane

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Title: The Speed Imperative: Life in the SiteSelection Fast Lane


1
The Speed Imperative Life in the Site-Selection
Fast Lane
  • Jack Lyne
  • Executive Editor of Interactive Publishing
  • Site Selection Magazine
  • www.siteselection.com
  • Alabama Business Conference
  • Maui, Hawaii
  • January 12, 2001

2
Safety Aint What It Used to Be Speed
Kills. -- U.S. road-safety slogan forged in the
1960s Slowness Kills. -- Site selection
axiom forged in Information Age
3
  • Coping with the Speed Imperative
  • Three Enduring Truths to Live by
  • E-enable open-source Web-readiness.
  • Architect synergistic portals.
  • Morph transparent metrics.
  • (just kidding, folks these are from the online
    Web Economy BS Generator)

4
  • Some Internet-Age Myths Vis-à-Vis Site Selection
    Business Location
  • Place and corporate workspace will continually
    diminish in importance.
  • Pure-play dot-coms will dominate.
  • The middlemen (e.g., brokers, consultants) will
    fall by the wayside.

5
Some Internet-Age Facts Vis-à-Vis Site Selection
Business Location
  • The speeds of facility-location processes are
    continually accelerating, reflecting the pace of
    the larger business environment.
  • We are, all of us, drowning in information, when
    what we need is wisdom.
  • While many less skilled middlemen will perish,
    the more skilled will remain in demand.

6
Voices from the Site Selection Fast Track
Microsoft looks at the cost of not having real
estate online. . . . Microsoft wants deals done
faster and faster, because it looks at real
estate as enhancing its ability to make money,
not as an additional cost. -- Stephen
Walbridge Senior Managing Director Julien J.
Studley Inc. (handles most of Microsofts U.S.
portfolio)
7
Voices from the Site Selection Fast Track (cntd.)
We had a well-funded biotech company call us on
a Thursday and hire us to help them to make a
headquarters-location recommendation at a board
meeting the following Wednesday. Their HQ lease
was expiring in three months. They thought they
could do it themselves. . . . We get calls
like that all the time. -- National Director
of a Major Location Consultancy (name withheld
for confidentiality)
8
Case Studies in Speed (Very) Fast Facts
  • Once upon a time Normal meant 24 months to
    build a new facility, 16-18 months for masters of
    the universe.
  • Sprint PCS built a 90,000 sq. ft.,
    1,000-employee call center in Rio Rancho, N.M.,
    in 89 days a third of call-center standard.
  • Dell built its first Nashville mfg. plant a
    300,000-sq.-ft. facility -- in 62 days. In its
    first year on the Tennessee site, Dell built 1
    million sq. ft.
  • More and more firms first contacting consultants
    with requests to get into new space in six weeks.

9
Case Studies in Speed Bellagios Hiring Blitz
  • What Bellagio did hired 9,600 employees in 24
    weeks in 1998, including VPs and accountants
  • Screening 84,000 applicants in 12 weeks.
  • Interviewing 27,000 finalist applicants in 10
    weeks.
  • Processing 9.600 hires in 11 days.
  • How Bellagio did it Created fully integrated,
    paperless job-application and HR systems. Saved
    1.9 million.
  • Telling factoid Cisco visited Vegas to benchmark
    system.
  • (For more details Fast Company, January 2001)

10
Case Studies in Speed AOL Finds Bricks to
Support Ailing Clicks
  • Some very ugly mail 96s flat-rate access
    overwhelmed network. Inadequate capacity space
    after hyper-growth.
  • Luck counts No new large facilities in N. Va.
    in 5 years, but AOL quickly found white
    elephant with vacant acreage. Increased HQ space
    40 has rapidly, continually expanded.
  • ED-side speed Site plan approved in 30 days.
    Bldg. plans simultaneously reviewed approved.
    Bldg. occupancy permits issued floor-by-floor.
  • Move-in timeframe 5 months after plan
    submitted.
  • (For more details Site Selection,
    August/September 1998)

11
Voices from AOLs Fast Track
People always say, They must be giving you
terrific incentives. But its not really that at
all. As quick as we need to move, time really is
money. What Loudoun County has given us is
terrific service . . . removing barriers and red
tape. -- Mark Stavish, AOL VP of Human Resources
12
Case Studies in Speed Hondas Turbo Ride into
Alabama
  • The deal Honda in May of 1999 picked Lincoln,
    Ala., for 400 million, 1.7-million-sq.-ft.,
    1,500-employee plant.
  • Initial projected start-up April 2002
  • Projected start-up with fast-tracking Late
    2001, due to state and local area
  • Quickly completing access roads
    water/sewer lines.
  • Expediting environmental permitting.
  • Fast-tracking to meet deadlines for worker
    screening, hiring and training.
  • Having 1,000-acre option.
  • (For more details Site Selection Online
    Insiders Snapshot from the Field, May 17,
    1999)

13
Case Studies in Speed Dell Old CRE Rules Need
Not Apply
  • Big results, small staff In-house CRE staff of
    12.
  • Direct-market CRE model Holds fast to
    direct-sales model. Expands only when model
    dictates . . .
  • . . . and its dictating very rapidly In
    16-month span in 98-99, announced or completed
    five 2,000 employee plants in Tenn., Ireland,
    China and Brazil.
  • Expanding expectations Direct-market CRE model
    dramatically increases expectations placed upon
    Dells service providers (SPs).

14
Case Studies in Speed Dell Computer (cntd.)
  • Heightened expectations for service SPs include
  • Doesnt use ongoing alliances or big, obvious
    multinational SPs. . . . They cant move fast
    enough, and theyre substantially more
    expensive.
  • Architects/contractors must often make on-spot
    bids.
  • ED fast-tracking required 1 year after Dells
    first contact w/ Tennessee, plant turned out 1
    millionth PC.
  • Rewrites existing location norms Only way
    huge plant to Brazil was with virtual
    warehouse. Products/parts go straight through
    customs, goods monitored online.
  • (For more details May 2000 Site Selection)

15
Voices from Dells Fast Track
We have a mantra in Dell corporate real estate
Set unrealistic expectations . . . and then
exceed them. -- Kip Thompson, VP, Wwide Fac.
Mang. CRE Ive learned more in one month
here than I wouldve in five years on other jobs.
After this, any other project will seem
easy. -- Mike Bazydola, Turner Const. Mgr. for
Dell at Nashville site We have another mantra
in Dell corporate real estate No simply means
that you dont yet have enough information. --
Kip Thompson
16
Case Studies in Speed Cisco The Internet
Poster Childs Virtually Integrated Lessons In
Speed
  • Adding 3,000 employees per month as many as 30
    acquisitions in last six months of 2000.
  • For 19 consecutive months in 98-99 brought one
    new building online in North San Jose.
  • Recently announced new 20,000-employee S. San
    Jose campus, plus 7,000-employee N. San Jose
    expansion.
  • Rapidly adding new clusters/expanding existing
    ones, including Boston Richardson, Texas
    Limerick, Ireland.
  • (For more details November 2000 Site Selection)

17
  • VI Model Spreads Wealth and Need for Speed
  • Expansion by association Cisco never touches 70
    percent of its products. Huge growth pressures on
    contract mfgs. suppliers.
  • VI Model creating fast-growth sector We target
    high-growth companies. Id say 40-50 of our
    business now is from third-party outsourcing
    outfits -- mfg.., call centers and shared
    services, mostly. -- VP w/ major
    consultancy.
  • VI as prototype? Gartner Group By 2005, 70
    of all product- and service-based industries will
    be dominated by virtually integrated enterprises
    (0.7 probability).

18
  • Speed Need Internet
  • Common Site-Selection Blunders
  • Insufficient self-sufficiency Nets info
    explosion spurring many firms to adopt
    look-ma-no-outside-help strategies.
  • If we build it, they will come Many firms
    mistakenly assuming that labor cluster means
    labor availability.
  • Information overload at a glance Google search
    for Hawaii and labor data and 2000 produced
    42,400 results. Much data either old or in
    conflict with other sources.
  • Gratuitous plug section, beginning and end
    Development Alliance (developmentalliance.com)
    provides 150 searchable demographic variables for
    all states, counties, most major metros.
  • .

19
  • Challenges/Opportunities Speed Ups Premium
    Placed on High Skills
  • Reading the data leaves Exclusivity of data
    extinction. Expert interpretation of data
    success.
  • Knowing the drill Average firm may undertake an
    expansion every 5 years. Major consultants do
    100s/year.
  • Higher business risks higher value placed on
    skillful risk management Speed need increases
    projects odds for failure (missed windows of
    opportunity, inadequate time for location, hiring
    considerations, etc.).
  • Smart growth complicates the equation Election
    Day results from San Francisco, Arizona.

20
  • Perhaps the Biggest Speed Challenge for
    Consultants Is Internal
  • Meeting the challenges created by the ongoing
    acceleration of site selection processes means
    that consultant organizations must rapidly
    disseminate their most skilled players expertise
    -- particularly to the newer members of the
    enterprise.

21
  • Its Going to Get a Lot Faster Out There
  • A late mover in Internet adaptation, real estate
    hasnt yet felt the full impact. But its coming,
    and fast
  • Ford/GM Anticipate saving 6.5 billion in next
    6.5 years by moving supply chain operations
    online.
  • Cisco Saving 800 million-plus a year by
    putting key business applications on the Web.
  • XML Will X-celerate things XML protocol will
    organize data so computers can communicate
    directly without human intervention. Conceivably,
    suppliers and manufacturers could roboticly find,
    buy and sell goods and services.

22
Voices from the Fast Tracks Foggy Future If
past history was all there was to the game, the
richest people would be librarians. -- Warren
Buffett This is not the beginning of the end.
It is the end of the beginning. -- Winston
Churchill during the Battle of Britain.
23
Thank You for Slowing Down Long Enough to Listen
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