The Future of Manufacturing Facility Modernization
Innovations in facility construction
Estimated read time: 7 minutes, 23 seconds
Manufacturing has come a long way since the Industrial Revolution. While the shell of manufacturing facilities remains simple in design, the interiors are becoming increasingly sophisticated. Manufacturers need their facilities to serve as a profit center, designed to improve manufacturing productivity and efficiency, enable scalability, and handle the operation of cutting-edge technology.
"The manufacturing landscape is changing dramatically, from the way we produce goods to how people work inside these facilities," says Brian Tobiczyk, a market executive who leads Mortenson's Manufacturing Community of Practice program. "At times, it feels like it's changing by the hour. But it's an exciting time for the industry because we're solving common challenges through innovation, and reimagining the way we approach manufacturing."
Advances in Cold Storage Facility Design
An explosion in the popularity of online shopping in 2020 fueled the need for more warehouse and distribution space, and required companies to reassess their cold storage capacities—and it continues to this day. However, the growth isn't with B2B food distributors, it's the large supermarkets offering home delivery services.
There's a lot of innovation in the home grocery delivery model because large companies recognized that people like the convenience of having food delivered to their home, even after the pandemic. So, they're making major investments in cold storage facilities across the country to meet the increased demand.
"These cold storage facilities are smaller—around 300,000 SF compared to a 700,000-2,000,000 SF distribution center—and more dispersed to serve multiple delivery areas," says Brian. "Retrofitting owned or rented warehouse space to accommodate increased cold storage needs is one option for manufacturers, but it's not always the best solution. Facilities need a combination of ambient and cold storage space, and proper integration of freezers and refrigerators is critical to prevent costly product spoilage. Technology is another consideration in designing and building cold storage warehouses."
Recent change innovations in the grocery supply chain have led to "dark warehouses." These highly automated facilities have fully automated retrieval systems that require very little human interface. While the investment in the automation system can prove a high barrier, the offset of a smaller physical footprint and lower staffing costs can offset those initial investments.
The cold storage market size is valued at $30.26 billion, with anticipated growth over the next several years. Companies will need to invest in new facilities and focus on manufacturing modernization if they want to keep up with customer demand.
Advanced Technology in Manufacturing
All areas of the manufacturing and industrial industries can use and benefit from automation, AI (artificial intelligence), and IoT (internet of things) technology—whether it's R&D, production, assembly, or distribution. And while this technology isn't a new concept to either industry, it's continuously redefining the way today's facilities operate.
Manufacturers across all industries are integrating more automated picking equipment, palletizers, and loading/unloading systems to move large volumes of products efficiently and with minimal error. Automation has helped manufacturers increase accuracy and efficiency, improve workplace safety, and reduce manufacturing costs. On the logistics side of operations, AI is a critical business tool used to manage orders and track deliveries.
The desire to integrate more advanced technology in manufacturing is fueled by not only efficiency requirements but worker shortages. Manufacturers need more space to keep up with demand; however, they struggle to find enough staffing for their current facilities, let alone a new one.
"Modern manufacturing facilities are already highly automated, but companies are maxed out and trying to think about what's next in an innovative way," explains Brian. "That includes investing in additional levels of automation to ensure they don't have a people problem in the future."
Mortenson built Vermeer Corporation’s manufacturing facility to expand its production capacity and address efficiency and product flow concerns. The 525,000 SF facility in Pella, Iowa, includes ample space for parts production and distribution. Integrating automated pickers and other technology throughout the interior and exterior spaces allows Vermeer to keep up with production demands, even with a smaller warehouse staff.
Technology and manufacturing modernization require a significant investment and can sometimes prove challenging, depending on the manual processes a manufacturer needs to automate. Not all manufacturers can invest in full technology and equipment updates, but they can implement changes in phases. Looking ahead, we’ll see manufacturers building more compact and complex facilities designed to accommodate remote monitoring of highly automated processes.
The manufacturing landscape is changing dramatically. At times, it feels like it's changing by the hour. But it's an exciting time for the industry because we're solving common challenges through innovation, and reimagining the way we approach manufacturing .
Increase in Life Sciences Manufacturing
It’s no secret that life sciences is a booming and evolving industry in the manufacturing world. “We’re experiencing increased demand for life sciences facilities with high-tech R&D and manufacturing spaces,” says Brian. “These facilities have more advanced mechanical requirements than traditional manufacturing spaces and require major capital investments. And they’re challenging to build because of all the regulations involved.
What makes life sciences facilities so different is the sophisticated lab space and complex mechanical, electrical, and plumbing (MEP) requirements. The high regulation of wet labs, dry labs, and cleanroom manufacturing spaces comes with stringent requirements for cleanliness and ventilation. Every detail from the HVAC and filtration to the floor, ceiling, and wall covering materials requires careful consideration.
A customer needed to expand their manufacturing facility to accommodate increased production demands for a new medical device. The space had complex MEP requirements, cleanroom manufacturing space, and sophisticated dust collection and chemical delivery systems. In addition to integrating complicated systems and technology, the customer needed flexibility and redundancy built into every design element to prepare their manufacturing operation for continuous growth.
Reshoring Manufacturing Operations
Heavy reliance on overseas operations, primarily in China, caused problems for manufacturers both during and after the pandemic. One of the industries greatly affected by shutdowns and a sudden surge in demand was semiconductor manufacturing. Chip shortages delayed the manufacturing of everything from small electronics and residential appliances to mechanical equipment and vehicles. These events triggered conversations about reshoring as manufacturers thought about the future of their business.
Now, the federal government is giving incentives through the CHIPS and Science Act to help large semiconductor manufacturing companies reshore their operations. The CHIPS and Science Act of 2022 is bipartisan legislation enacted to help boost semiconductor research, development, and production in the U.S. The passage of the Act resulted in companies investing nearly $50 billion in domestic semiconductor manufacturing.
However, it’s not just large microchip and semiconductor manufacturers considering reshoring. “We’re seeing this trend with some of the smaller tiered manufacturers as well,” says Brian. “But the ability to reshore is dictated by more than economics. Numerous factors come into consideration and some companies are more apt to reshore than others—it all depends on what best fits their business model."
When evaluating reshoring, manufacturers first need to consider their space needs. There’s also a large capital investment in purchasing up to hundreds of millions of dollars in processing equipment. Trying to retrofit that equipment and technology into an outdated building is sometimes cost prohibitive.
“The benefits need to outweigh the costs incurred,” says Brian. “When manufacturers invest that much money in equipment, they don’t always want to retrofit it into an old building. Sometimes, the best option is to build a facility from the ground up that perfectly fits their needs. That is where federal incentives can help manufacturers offset some of the costs associated with reshoring.”
Preparing Spaces for the Future
Future growth requires a flexible infrastructure that makes it easy to expand, reset or position a manufacturing operation. It’s not about the building shell, but what goes inside. Oftentimes, older buildings lack the mechanical and electrical infrastructure required to implement new technology. Unfortunately, these inflexible environments can inhibit an organization’s growth and business goals.
Preparing for the technology of tomorrow is tough because it doesn’t exist yet. So, while manufacturers can’t technically “future-proof” a facility, they can make smart, strategic decisions that won’t inhibit the ability to reconfigure and reset buildings in the future, like investing in movable equipment, and adding redundant mechanical and building components to accommodate growth.
“It’s a challenge faced by many manufacturers," says Brian. “We recently worked with a customer that was considering retrofitting their existing facility. After running through everything the renovations would entail, the process proved too onerous, and they decided to build a new facility instead.” He mentions it’s still valuable to go through the process of weighing a retrofit versus new construction because sometimes it works out for manufacturers to stay in their existing building.
As the industry continues growing and changing, manufacturers and their builders need to remain nimble and flexible in facility design. Mortenson engages with its customers and their industrial engineers from day one to understand the infrastructure and equipment required for the design. We have the right people in place to orchestrate the entire process, from design to construction, and set your project up for success.
Brian Tobiczyk is a market executive with a background in architecture, real estate, and commercial construction. With more than 20 years of experience in the industry, he excels at delivering well-thought-out solutions that address customers' current and future business needs.
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