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Dipesh Patel is the President & CEO of DP Gayatri, partnering with OEMs and Contract Manufacturers to automate and scale operations. A seasoned management consultant and graduate of the UofM Carlson School of Management, he brings strategic leadership to a portfolio of manufacturing and automation companies delivering factory automation, contract assembly, facility relocation and expansion, and supply chain localization across the U.S. and Latin America.
Every factory relocation we have advised on or executed has produced an operation that was different — sometimes better, sometimes worse, never the same — as the operation that started the move. The labor pool is different. The supplier base is different. The customer logistics are different. The regulatory environment is different.
If your business case assumes you are picking up the same factory and dropping it in a cheaper geography, the case is wrong. Here are the five questions that surface what you are actually signing up for.
Not the average wage. The labor reality. What is unemployment in the metro? What is the turnover rate among manufacturing employers? What is the median tenure? What is the skill density for your specific work — controls technicians, assemblers, welders, whatever you need? A 30 percent wage savings disappears fast if turnover doubles and training cycles eat your floor.
Where do your inputs come from? Where do your finished goods need to go? Every relocation adds inbound and outbound freight. Some adds customs and broker overhead. Build a parts-flow map from supplier to customer through the new location before you sign. The map usually surfaces cost you did not budget.
Some operations are document-and-go: the SOP, the BOM, the routing. The new team can run it. Others require engineering presence — process knowledge that lives in a few key people. If your operation is in the second category, the relocation timeline is not just "set up the floor." It is "set up the floor and keep two engineers on rotation for six to twelve months." That is real cost.
A relocation announcement reshapes relationships you may not want reshaped. Customers may question continuity. Suppliers may revise terms or walk. Local economic development authorities may revisit incentives. Each of these is a conversation you should have on your terms before the announcement, not after.
Most relocations underestimate how long it takes for the new operation to hit steady-state quality and throughput. Plan for 90 to 180 days of dual-operation overlap where the old and new sites both run. Plan for a quality dip in the first 60 days post-burn-in. Build the cash to fund that period before you start, not after.
When the destination has a deep labor pool for your skill mix, the supply chain math improves, the engineering is documentable, the customers are diversified geographically, and you have funded the dual-run period — relocation can be the right call.
When any of those break — and at least one usually does — the case has to be strong enough to absorb the shortfall.
DP Gayatri has executed factory relocations between US states and across the US-Mexico border for OEMs in heavy industrial and electrical assembly. If you are running the numbers on a move and want a second set of eyes on the assumptions, we do that work as part of our consulting practice.
