The Situation
Empire Moulding & Millwork, a Novo Building Products company, had an Illinois lease expiring within two years. Before committing to a renewal, leadership wanted an objective answer to a specific question: would relocating to a different facility reduce their logistics costs enough to justify the disruption and expense of a move? The company had a defined set of existing shipping destinations — the analysis needed to translate location options into total supply chain cost.
Most lease renewal decisions are made primarily on real estate economics. Empire's leadership understood that for a manufacturing and distribution business, the cost of the building is often less important than the cost of moving product from it. A location two hours away might look better on a rent comparison while costing significantly more on a total logistics basis.
The Approach
We performed a supply chain analysis using an optimized location-allocation model to calculate the total cost exposure of each candidate location — incorporating trucking distance, trucking time, total sales maximization, and sales margin impact. Four scenarios were modeled: the current location, a trucking-distance-optimized center of gravity, an unweighted center of gravity, and a trucking-time-and-margin-weighted center of gravity. Labor availability and crime index scores were integrated across all sites to ensure the model reflected operational reality, not just logistics math.
The analysis identified a location approximately two hours from the current facility that would reduce trucking miles by 4.2% and drive time by 5.0%. However, the full four-factor model revealed that the labor availability advantage at the current location significantly outweighed the logistics savings from relocation.
The logistics math pointed one direction. The labor data pointed another. The right answer required both — and the model made it visible.