The Situation

When costs are as high as the temperature inside your manufacturing facility in Singapore, it’s time to consider relocating to a more cost effective location in ASEAN

  • Twin City Fan & Blower is an industry leading designer and manufacturer of high quality custom, semi-custom, and standard fans ranging from heavy duty industrial process fans to OEM fans to a comprehensive line of commercial supply and exhaust fans.
  • Due to the company’s extensive expertise and long-standing reputation for proven quality, Twin City Fan & Blower products continue to be specified around the globe – with expanded manufacturing and service operations located in the U.S., South America, Europe, India, China, and Singapore.
  • Twin City Fan engaged Tractus, and their Singapore-based partner, to conduct a comparative analysis of the optimal location in ASEAN in which to establish a second Southeast Asian manufacturing facility and validate management’s preference to invest in Thailand.

The Project

Tractus applied its systematic, disciplined and objective site selection methodology using Twin City Fan’s identified location criteria that prioritized total operating costs as well as the location’s ability to expand sales in the local market

  • Twin City Fan’s objective was to identify locations that would yield a 30% reduction in total costs and provide opportunities for expanding sales into the local market in which the new plant was located.
  • The search area included Cambodia, Indonesia, Malaysia, Myanmar, the Philippines, Thailand and Vietnam, with finalist sites identified benchmarked against Twin City Fan’s existing Singapore operations.
  • Tractus identified location criteria based on a review of the client’s core business drivers including one-time investment and operating costs, operating conditions as well as investment and operating risk factors.
  • A long-list of locations were scored against Twin City Fan’s defined critical and important selection criteria, then rated, and ranked using an objective multiple-factor decision-making methodology resulting in a short-list of X preferred locations.
  • These finalist locations were evaluated on probability and severity of adverse consequences that may impact the investment in each of the locations and a risk-adjusted rating and ranking of the finalists was determined.
  • The finalist locations were benchmarked against the current Singapore facility to determine whether any of them met the minimum costs savings threshold of 30%.

The Solution

Management’s expectation that Thailand would be the best location for an expansion investment was validated by the research and analysis, although Vietnam and Malaysia were closely competing locations

  • Tractus’ analysis and recommendations provided the client with a clear, databased and process-backed view of the various markets across three different weighting scenarios.
  • While the results validated Thailand as the location best able to meet the Twin City Fan’s criteria, they also presented Vietnam and Malaysia as potential alternative locations based on fixed and variable cost and operating condition performance as well as and proximity to Singapore.