By CORNELIUS TIMMERMANN

The client, a company experiencing continuous growth, planned to invest in a new production plant on its existing site to align with its growth strategy. However, during the concept phase, it became apparent that the initial investment costs for the planned new building would significantly exceed its budget.

This prompted the need for another planning loop to compare the planned demolition and new construction with upgrading the existing building structure. In both scenarios, integrating new machine technology and future technologies was guaranteed. The objective of the exercise was reduction of the initially calculated investment costs by ~40%. To achieve these reductions, there were several approaches:

•        Analyse the current building fabric and evaluate the necessary investment costs for partial demolition, upgrading, and measures of the building envelope.

•        Comparison of the investment costs for demolition and new construction versus upgrading the existing structure.

•        Identify limitations due to the existing building structure and their influence on the planned machine technology and efficient production processes.

•        Feasibility and risk assessment of the two variants regarding production processes, technologies and automation.

•        Creation of a step-by-step plan that enables the implementation of demolition and new construction.

•        Development of a step-by-step plan to reduce investment costs.

There were many benefits that could be achieved. A comparison of the calculations showed that upgrading the existing building structures did not bring any significant investment savings.

Thanks to the step-by-step plan developed, the investment costs could be reduced to such an extent that demolition and new construction were economically feasible.

The necessary competencies would be transferred to the new location step-by-step. Administration and peripheral areas would remain at the existing location.

Later expansion options and evolutionary stages were retained and installed during ongoing production. The step-by-step plan ensured maximum flexibility and customisation options and ensured that the company’s strategic development remained secure for the 10 years.

A comparison of the calculations showed that upgrading the existing building structures did not bring any significant investment savings. Thanks to the step-by-step plan developed, the investment costs could be reduced to such an extent that demolition and new construction were economically feasible.

The necessary competencies were transferred to the new location step-by-step. Administration and peripheral areas remained at the existing location. Later expansion options and evolutionary stages were retained and can be installed during ongoing production.

– The writer is a senior consultant at Lignum Consulting, an independent firm specialising in the wood and furniture industry that helps businesses tackle the industry’s evolving challenges. He can be reached at c.timmermann@lignum-consulting.com.

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