As companies expand U.S.-based manufacturing and logistics facilities, strong procurement strategies are becoming essential to maintaining schedules amid shifting supply chain conditions. Early planning, flexible timelines, and continuous monitoring help reduce delays tied to long-lead equipment and global sourcing.
Keeping the Supply Chain Moving
Driven by global supply chain disruptions and reinforced through tariffs and tax incentives, onshoring has emerged as a strategy for businesses to gain reliability and reduce exposure to unpredictable global logistics networks. But it isn’t only American companies that are building their facilities stateside. International companies expanding into the U.S. market have also recognized the advantages of being in closer proximity to consumers.
Manufacturing and logistics projects require substantial upfront investment, and returns only begin once production is running. With timelines measured in years, many interdependent variables affect speed to market. For process-heavy operations, equipment lead times and procurement challenges are magnified by the same supply chain uncertainty that is driving them to onshore. Early procurement strategies during design, building flexibility into the schedule, and continuous monitoring of materials and equipment availability can mitigate risk.
It’s easy to overlook just how vast the U.S. is compared to other countries and to underestimate how different site conditions and regulations can be from one region to the next. Factors such as zoning, permitting, and entitlement processes differ by jurisdiction, while site constraints, proximity to utilities, even geological conditions can add up to costly delays for owners entering unfamiliar markets.
Engaging an owner’s representative early who has relationships with local authorities having jurisdiction (AHJs), and who is familiar with local civil and site conditions, can help owners establish project controls that enhance predictability. In today’s construction landscape, eliminating uncertainty entirely is unrealistic. However, with the right partners and a flexible contracting methodology that supports long-lead procurement, owners can achieve the critical early alignment and schedule flexibility that keeps projects on track, produces faster commissioning, and delivers true ROI.
Relationships to Navigate Regional Nuance
The U.S. landscape is vast with myriad jurisdictions. Domestic and international companies often underestimate the regional differences that can affect project timelines and speed to market.
When selecting a site, owners must consider the natural landscape’s impact on construction and facility operation. Soil, floodplains, and topography can vary dramatically even within the same state. Equipment needs to be selected or customized for the local climate. Manufacturing and logistics facilities often need to be situated close to utilities. In regions with limited grid capacity or aging infrastructure, alternative energy strategies or phased power delivery may be required to meet production demands.
Early due diligence and geotechnical investigation can prevent redesigns, and engaging local specialty firms that have experience working in a site’s conditions can streamline land development and lay the groundwork for a facility’s long-term success. The same local partners can also provide insight into the local regulatory landscape.
Permitting, zoning, and entitlements can require lengthy approvals, and the requirements vary by municipality. Understanding who the local AHJs are, and taking the time to build relationships as early as possible, can help get projects off the ground. Those relationships make it possible to develop a realistic permitting plan with clear zoning and entitlement timelines.
Selecting the Right Contracting Methodology
Choosing the right contracting methodology is one of the most consequential decisions in a manufacturing or logistics project. It defines the project’s trajectory and determines how and when partners are brought on. Because each method allocates control, risk, and decision-making differently, selecting the right method depends on the owner’s priorities, internal legal and management capabilities, and program of requirements (PoR).
While each approach offers advantages, cost savings are rarely among them. The reality is that no method is inherently more cost effective in practice. Different methods can impact speed to market, but not without tradeoffs of control, risk, and flexibility. Below are the three most common contracting methods and their relevance to current supply chain uncertainty:
- Design-Build (DB) offers the fastest path to construction by consolidating design and construction under a single contract and foregoing the competitive bidding process. This approach accelerates timelines, but reduces owner control over design and quality, making it most suitable for owners with strong internal legal and management capacity and a well-established PoR.
- Construction Manager at Risk (CMAR) engages a delivery partner early through a qualifications-based selection to provide cost, schedule, and constructability input during design. CMAR offers more owner control than DB, but cost estimates rely on early design assumptions with little flexibility to adapt to procurement realities.
- Design-Bid-Build (DBB) is the traditional delivery method, in which owners engage a design partner first and bid the project after design milestones. The owner retains control over design and quality with reviews at the 30-, 60-, and 90-percent design milestones. The project is bid competitively for contractor selection.
Selecting the right contracting method depends on a variety of project-specific variables, however, and an owner’s representative can help assess the risks and benefits to any given approach.
While slower than DB and CMAR, the DBB approach typically allows for greater early insights into potential delays during design and construction, and it provides the time to adjust accordingly. Building checkpoints into the schedule, maintaining vendor communications, and monitoring variables proactively can help avoid delays.
For large-scale facilities, certain design packages, such as MEP systems, can advance ahead of the building design. Treating the traditional 30/60/90 progression as a flexible framework allows early coordination of utilities and long-lead systems, while rolling bid packages and phased releases add further flexibility.
Thinking about the 30/60/90 design progression as less of a rigid linear path and more a holistic average, teams can expedite certain design aspects of the project, such as MEP, to get a head start on site utilities. While the building design may be lower than 30 percent, the site and utility design could be substantially higher.
Procurement Strategies to Reduce Uncertainty
With a contracting framework in place, procurement becomes a primary schedule driver for process-heavy industries like manufacturing and logistics. Equipment is frequently sourced from Europe or Asia, putting it at risk of supply chain disruptions. For equipment fabricated overseas, long lead times are standard and can be built into schedules. When these timelines shift unexpectedly is when things become challenging. Establishing procurement strategies at the outset gives teams the flexibility to adjust sequencing and maintain momentum when variables change.
At the start of a project, creating lines of communication with multiple vendors has two benefits: it keeps teams informed of shifts in actual lead times, and it provides alternative suppliers when one gets delayed. For highly specialized, single-source process-line equipment, clearly communicate special equipment requirements, such as UL listings. International owners or suppliers unfamiliar with U.S. codes need to coordinate a lengthy UL certification process before equipment can be installed.
Owner-furnished, contractor-installed (OFCI) strategies are increasingly common, giving owners the ability to order equipment early and maintain control over cost, procurement, and quality. However, when equipment dimensions or specifications remain undefined, design teams must compensate by overdesigning facilities and utilities. For smaller systems, the impact can be minimal. But for large-scale process-line equipment, some of which spans the length of a football field, even a small percentage of extra space can add significant construction costs.
The Importance of Early Alignment
In the wake of supply chain disruptions and global market uncertainty, manufacturers can still hit operational targets and avoid expensive redesigns by choosing the right delivery method, engaging early, and sequencing design around procurement while accounting for regional U.S. and international nuances.
Each project brings new challenges and demands, and some level of uncertainty is inevitable. Using proactive scheduling, budgetary controls, and strategic procurement, owners can take control and adapt dynamically as projects progress. Manufacturing and logistics companies excel at producing goods, while construction partners help translate their needs and priorities into design and procurement pathways for successful U.S. project delivery.
FURTHER INFORMATION:
Steven Strobel
