A hidden champion in mechanical engineering secures its competitive edge through a data-driven, strategic location decision supported by a HANSE Interim Manager.
Do you know how to relocate a production site successfully?
While German companies invest billions in international acquisitions—31 billion US dollars flowed into the US market in 2024 alone—one critical question arises: how do you make a sound, strategic location decision? Expansion involves more than capital. Choosing a new site means balancing multiple factors, from the availability of skilled labor and logistics to long-term competitiveness. A poorly chosen location can lead to unexpected costs, production delays, and staffing issues. That’s why professional location assessment is essential to minimize risk and unlock potential.
The Challenge: Managing a Strategic Site Relocation in Mechanical Engineering
An internationally successful hidden champion in mechanical engineering faced a decisive challenge: in order to meet increasing customer demands and remain competitive in the long term, the company needed to restructure its production capacity. A new plant in Central Eastern Europe was planned to expand both manufacturing and pre-assembly capacities for high-precision components. At the same time, the goal was to establish an optimized production structure and ensure a strategic site selection. A poor location decision would have had serious consequences, as production costs, delivery times, and quality control are all highly dependent on local conditions.
The Assignment
The planned site relocation in the mechanical engineering sector was shaped by several key factors. The availability of qualified specialists at competitive labor costs compared to Western Europe was essential. The goal was to strike the right balance between cost-efficiency and technical expertise to ensure continued excellence in production quality.
In addition, the expansion had to align with existing locations and employees.
A robust, data-driven decision-making framework was required—one that considered financial, operational, and strategic factors alike.
It was also important to include risk factors such as regulatory uncertainty, cultural differences, and long-term infrastructure development in the evaluation.
HANSE Interim was commissioned to conduct a structured location assessment and deliver a reliable basis for decision-making.
The Solution: Structured Location Assessment as a Success Factor
Kick-Off Workshop as the Strategic Foundation
The project began with a strategic kick-off workshop that defined the key requirements for the new site:
- Production and processes: Ensuring optimal conditions for core component manufacturing
- People and organization: Assessing the local availability of skilled professionals
- Logistics and supply chains: Reviewing infrastructure and transport connections
- Buildings and infrastructure: Clarifying construction and site-specific conditions
- Legal and tax conditions: Analyzing regulations and potential tax incentives
- Market access and supplier networks: Securing long-term advantages through local partners
Based on these criteria, a detailed evaluation process was designed to systematically analyze and compare potential sites.
A structured evaluation was particularly important, given the complexity of relocating a mechanical engineering operation, where many technical and economic criteria are interconnected.
Data-Driven Analysis Using the IBG Matrix Method
With the defined criteria in place, a comprehensive evaluation process was carried out. Using the proven IBG matrix method, various regions were first compiled into a longlist and objectively assessed. The top-performing regions were then shortlisted for in-depth analysis.
This structured approach ensured that financial, logistical, and labor market factors were all included equally in the decision-making process. A detailed SWOT analysis of each location provided further insights into potential risks and opportunities.
The systematic analysis enabled the company to manage its site relocation in mechanical engineering with a clear, data-driven approach—identifying both risks and opportunities early on.
The Result: A Reliable Basis for the Optimal Site Decision
Next, exploratory visits to the most promising locations were planned to gather qualitative insights and establish local stakeholder connections. These on-site visits made it possible to include not only hard data, but also soft factors such as cultural aspects, work ethic, and innovation potential in the decision-making process.
The data-driven analysis revealed clear economic differences between the candidate regions.
One example was a comparison of labor costs in selected Central Eastern European countries versus Western Europe, which illustrated how key economic metrics play a role in professional location assessments.
Additional factors such as energy costs, government incentives, and infrastructure development projects were also considered in the final evaluation.
Risk assessment was a particularly important part of the process. By examining geopolitical developments, potential trade barriers, and economic uncertainties, the company was able to design a location concept that promotes long-term stability and growth.
Thanks to this structured approach, the relocation was not only operationally sound but also strategically secure.
Conclusion
Thanks to the structured methodology implemented by the HANSE Interim expert, the company gained a reliable foundation for its location decision. The insights generated now serve as a solid basis for upcoming planning and implementation phases. In addition, the systematic approach enabled early identification of risks and opportunities—allowing the company to set the right strategic course with maximum confidence.
This project story demonstrates how a methodical location analysis supports companies in making sustainable, future-focused decisions — a key factor for long-term competitiveness.
A successful location decision is a powerful lever for cost optimization, efficiency gains, and sustainable market positioning.
Companies that base their decisions on data gain not only economic benefits but also strategic security in an increasingly globalized competitive landscape.
Location Assessment Expert
Best regards
Your HANSE Interim Management
Andreas Lau
