Strategy and Organization

Production Relocation

Securing Competitiveness Through Strategic Site Relocation

Rising costs, skilled labor shortages, and regulatory hurdles are weakening corporate competitiveness. Industrial companies are particularly affected by these structural challenges. When a site is no longer economically viable, companies often consider relocating production capacities – often to Eastern Europe, the US, or Asia. According to a study by the German Economic Institute (IW), one-fifth of industrial companies already produce abroad, and this trend is rising.

However, relocation is never just a cost decision. It’s a strategic move with far-reaching consequences and long-term impacts.

Companies planning a relocation face complex questions:

Which locations align with our future production strategy?
Does nearshoring make sense, or should we consider locations further away?
What risks does a move create for the organization, product quality, customers, and the brand?
What does a relocation look like in terms of timeline, budget, and capacity?

Drees & Sommer provides holistic, data-driven support for your relocation decision—from the initial strategic analysis to successful implementation.

Strategic Site Analysis and Footprint Optimization

A site relocation is rarely an isolated project. Instead, it serves as a core component of a broader optimization strategy meant to stabilize and enhance your entire production network.

The goal is to build a resilient, strategically aligned footprint that drives long-term competitiveness, rather than simply delivering short-term cost savings.

Drees & Sommer guides you through this process with a clearly structured approach.

Our Services for your Relocation

Site decisions are only successful when you align processes, production needs, workforce qualifications, infrastructure, and real estate with specific local market factors.

1. Site Assessment – Analyzing the Status Quo

We establish complete transparency about your current production site to create a reliable baseline for all future decisions.

Comprehensive overview of labor, energy, and real estate costs
Assessment of skilled workforce availability and existing operational constraints
Identification of major structural inefficiencies and current facility conditions

2. Developing Realistic Relocation Scenarios

We identify and evaluate suitable target regions based on objective, comparable criteria, including labor costs, workforce qualifications, infrastructure, energy prices, taxes, regulatory frameworks, and geopolitical risks.

Shortlist of high-potential target regions (Eastern Europe, the US, China, for example)
Detailed breakdown of pros and cons, backed by comparative regional data
Clear justifications for any excluded regions

3. Planning the Factory Relocation

We build a comprehensive business case to drive your relocation decision, focusing on operational and capital expenditures (OPEX, CAPEX), return on investment, break-even points, and market sensitivities.

Direct comparison of operating and investment costs between current and target sites
Calculation of the relocation's break-even point and net present value
Sensitivity analyses (currency fluctuations, energy costs, ramp-up risks, for example)

4. Conducting an Impact Analysis

We evaluate how a move will affect your supply chain, customers, brand image, leadership, and works councils to create a detailed risk and mitigation plan.

Assessment of organizational and operational impacts
Risk evaluation covering talent retention, quality, brand perception, and compliance
Clear guidelines and actionable next steps for the possible transition

What is industrial relocation?

Relocation refers to the planned transfer of full or partial production capacities to a new region or country.
When should a company consider relocating production?

Key triggers include persistently high operating costs, consistently low capacity utilization, talent shortages, or a strategic realignment of the global production footprint.
Which regions are best for a site relocation?

The ideal region depends on various factors, including your specific industry, production volume, level of automation, supply chain dynamics, and strategic goals. Markets like Eastern Europe, the US, or Asia each offer unique advantages and risks that require careful evaluation.
How long does a relocation project take?

Depending on the scope and target region, timelines can range from a few months for partial moves to several years for full-scale facility relocations.
What are the biggest risks when relocating a site?

Typical risks for manufacturers include operational ramp-up delays, supply chain bottlenecks, quality control issues, and reputational damage. However, by factoring these threats into the site decision from day one, you can actively manage and mitigate them.

Your Benefits

We provide seamless, integrated support throughout the entire relocation process from the initial strategic planning to operational launch at the new site thanks to our strategic partnership with management consultancy CYLAD.

Drees & Sommer experts bring extensive capabilities in project management, planning, engineering, construction, digitalization, and commissioning. CYLAD complements this with detailed expertise in corporate strategy and operational excellence. This combination ensures your site strategies do not just look sound on paper, but perform successfully in reality.

You benefit from:

End-to-end solutions from strategy through to execution
Decades of industry experience
Proven execution expertise on complex international projects
Shared accountability that extends far beyond the concept phase

We do more than just develop your relocation strategy, we work alongside you to execute it. We drive the process with clear accountability and realistic timelines to deliver a measurable impact on your competitiveness.

Industrial and Commercial Transformation

Companies are under immense pressure to transform in response to the current energy and climate crisis, new ESG requirements, material shortages, disruptive technologies such as AI, changes in production, and the intensified war for talent. To remain competitive, sites, buildings, and production processes must respond to market demands faster than ever while remaining economically viable, flexible, and sustainable.

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Operational Excellence Automotive

OPEX (Operational Expenditures) have become synonymous with a site’s attractiveness on the global stage: companies with low operating costs see their operations expanded, while those with high costs lose ground within the production network. OPEX is therefore crucial for growth, resilience, and crisis resistance. Drees & Sommer helps automotive companies make their sites sustainably fit for the future.

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Sustainable refurbishment

Our industry experts know how to leverage your potential. They’re involved from the very beginning, running you through diverse scenarios and implementing them as needed. We also offer a complete revitalization package, including project management, planning, and construction management. We combine the big picture with expertise down to the smallest detail.

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