The company is riding the crest of sustained business expansion, economic and market conditions are strong, competition is vulnerable and they're running out of space. They believe that we can best assist them in a layout and construction of a new or expanded facility that will more adequately meet the anticipated needs of the business. While optimistic about the future, they are also rightfully concerned about the immediate consequences of the planned expansion. These are all concerns that need to be considered as part of this important decision. However, physical expansion should probably be considered only after all the factors regarding capacity utilization have been fully evaluated.
Storage space is probably the most common occurrence.
Increased space is needed due to excessive raw material, WIP and finished goods inventory. In these situations, facility expansion addresses the symptom, not the cause of the problem. In time, the situation at the expanded facility will be the same as in the present facility. Reconfiguring the production area into cells may dramatically reduce the space required, minimize move distances and provide substantial increases in throughput. Likewise, many companies focus only on the square footage of the facility and ignore the potential of the cubic footage.