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Harbor Freight Tools
Harbor Freight Tools operated a national distribution center out
of Southern California. Current and projected volume called for
the establishment of a second warehouse, somewhere east of the
Mississippi River.
WDGC was commissioned to recommend the optimal location for the
second distribution center. Our first charge was to ascertain
the least cost location based on freight economics. That was in
the eastern Tennessee/western North Carolina area. We then
determined that a 250 mile radius was acceptable based on
transportation costs.
Next WDGC conducted a locational screen to identify a shortlist
of three candidate areas. Labor market indicators played a key
role in defining the shortlist. Subsequently, WDGC launched a
first hand evaluation of the three areas. This included a series
of interviews with local manufacturers and wholesalers. We
sought a location wherein Harbor Freight Tools could achieve
employer of choice status at a favorable wage level. Other
prominent considerations included truck service/cost (including
backhaul opportunities), ready to go/fast track construction
sites, low natural disaster risk, no inventory tax, nonunion, 4
lane highway linkage, and delivery times to customers.
The end result was a location in Dillon, SC. While Dillon was
further removed from markets and carried a higher freight tab,
labor and occupancy costs more than offset the differential.
Additionally the company received a significant incentives
package equal to about $10,000 per new job. Harbor Freight Tools
has enjoyed much success as a leading employer. Recently the
company doubled its capacity in Dillon. |
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