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Factory investments and equipment acquisitions are major undertakings to a company and their success is critical, as success of the company itself also often hinges on the investment. In these cases, mere price is not the deciding factor, as quality and delivery time must also be optimized according to the company’s requirements. To ensure the success of an investment project, resources are also needed. Too often we see investments being carried out while the people involved are still engaged in performing their regular tasks.

Utilize the checklist for factory investments >>

What is sought with the investment and what is the timeframe for it?

With factory investments, as with acquisitions in general, the specification of the investment is important. We know what the investment consists of, what the budget for it is, and the timeframe in which it must be implemented. This may seem obvious, but several different views regarding the investment may exist. What does the word “good” actually mean to each person involved? 

Factory projects usually arise in companies every 10–15 years, at which point the project requires commitment. Investments are significant projects with regard to their size and involve major financial contributions, in particular. Therefore, it is important to invest both time and resources from the beginning to ensure success. This type of work can rarely be done while working on one’s regular tasks. Handling these types of projects inhouse often leads to under-resourcing regarding both staff and investments. For example, I can recall a situation where an additional investment of €100,000 would have provided significant savings, but the company was unwilling to commit any more resources for the investment in question.

 

Day to Day Tasks Must Be Handled

Simultaneously with investments, the regular business of the company must also be handled to ensure continuous cashflow. It is therefore relevant to
question whether the company has sufficient resources for everything. In many cases, competency within the company for these types of tasks is also from the last time a major investment was made, i.e. from ten years before. How where things done back then? Are there things to learn or documentation from
previous projects? Have things changed from the previous investment? Once again, the world is a very different place compared to the situation from ten
years ago. 

In my opinion, it is important to include at least one external specialist, who has a fresh handle on acquisitions and the entire investment process – and to do so from the very beginning. As the project progresses, it is then possible to introduce more experts or even an entire investment team. New people bring new skills to the project and often increase the enthusiasm of your own personnel as well, as new work is not piled on existing employees.


“Many people still think that equipment can be acquired by simply ordering it."

Timing Investments Correctly Is Challenging

The The correct timing of an investment acquisition is a massive challenge to the entire operation of the company. When the economy takes a downturn, it would be best to launch investments and carry out acquisitions quickly. But what are the financial resources available for this? During better times, such as now, every machine shop is at full capacity for at least 8 weeks and it may take up to a year to receive the necessary equipment. Many people still think that equipment can be acquired by simply ordering it.

The success of the company is often on the line with factory investments. If your company is planning, launching or has already launched a significant
investment, review the Factory investment checklist. The list has been designed as checklist for all those involved in investments. Maybe it will remind you of things that might be forgotten in a rush. Go through the list, checking each item, and contact an acquisition specialist for help where necessary.

 

Ari Koivistoinen is an experienced acquisition specialist who has lead various projects from maritime industry investments to service contracts. Ari has more than 20 years of experience with acquisitions.

 

DOWNLOAD THE CHECKLIST

Read also:

Accessing Outside Specialist is Easier Than You Think

Are Developmental Tasks Related to Procurement Buried Under Routine?

 



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