Footprint Planning And Location Strategy In Light Of The Pandemic

The Covid-19 pandemic is changing how people work, and companies, based on their specific operations, may need to make location decisions to align their real estate footprint with their future work models. Going forward, a fully remote workforce deployment model is unlikely to be adopted by most large corporations, but a hybrid model may be a reality, with a percentage of the workforce working remote permanently and the remaining managing alternative work arrangements. Furthermore, employees’ level of comfort with returning to offices and the potential for increased surveillance such as antibody testing, temperature screening and contact tracing should be considered. There are a multitude of factors that affect a company’s ability to successfully transition to this new model of work, and a future-thinking corporate location strategy is paramount.

Manufacturing facilities: The Covid-19 pandemic provides an opportunity for manufacturers to reconsider their supply chain resiliency and decentralize their manufacturing capabilities to multiple regional facilities to reduce dependency on a single geography. Although this approach may contradict recent centralization trends, in the wake of this pandemic, companies that have continued to thrive are likely ones with geographically diverse manufacturing footprints. These companies can ramp up operations in locations not heavily impacted by the virus and dial back or shut down in locales that have outbreak concerns.

Corporate offices: For organizations that depend on in-office interactions to maintain productivity, leadership will need to determine and implement clear policies and procedures prior to returning to the workplace to ensure the health and safety of their teams. Organizations that have more flexibility to adjust to a long-term increase in remote work can explore reducing and repurposing their physical office space as well as renegotiating leases. Corporate leaders should also consider longer-term deployment implications, including potentially rebalancing footprints between urban core and suburban locations to mitigate any future issues with high-density facilities, such as elevator capacities and multi-tenancy.

Distribution and logistics centers: Distribution and logistics centers are becoming increasingly important, as consumers have adopted new purchasing habits during the Covid-19 pandemic. Organizations reliant on distribution and logistics centers need to evaluate their facilities networks and confirm that their facility locations are optimized to mitigate business disruption impacts and ensure efficient delivery while protecting the health and safety of employees.

Data centers: To support the growing digital commerce and logistics demand, data center location strategy and maintenance will be an area of ongoing capital investment across a number of industries. Now more than ever, organizations are looking for secure and reliable data storage infrastructure to ensure seamless and secure data access to maintain business continuity and mitigate productivity losses. For some organizations, owning and operating captive cloud-enabled data centers will empower effective management of their entire data-connectivity pipeline, and site selection to help optimize for weather, energy, maintenance and connectivity is critical.

The breadth and depth of impacts of the Covid-19 pandemic have yet to be fully realized; however, one component that could set companies apart is the willingness to make capital investments in facilities to increase operational footprint resiliency and mitigate business continuity risks.