Site Selection
Definition
Site selection is the structured use of spatial analytics to choose the best location for a facility given demand, costs, risk, and operational constraints. It synthesizes demographics, customer behavior, accessibility, workforce skills, utilities, zoning, incentives, environmental conditions, and competition. Analysts model trade areas with drive‑time isochrones, gravity or spatial interaction models, and catchment cannibalization among candidate sites. Constraints include parcel size, setbacks, flood and wildfire exposure, and total landed cost. The process ends with scenarios—shortlists with quantified upside, downside, and sensitivity—so executives can decide with confidence.
Application
Retailers use site selection to locate stores and micro‑fulfillment hubs. Manufacturers balance labor pools, logistics to suppliers and markets, and energy prices. Health systems identify clinic and urgent care placements that close gaps in access. Public agencies site schools, fire stations, and shelters against response‑time standards. Renewable developers choose parcels with grid capacity and environmental compliance. Because assumptions age quickly, teams keep living models that update as new data arrive.
FAQ
How do you avoid double‑counting demand when overlapping trade areas are evaluated?
Allocate demand probabilistically with a gravity model that splits each consumer among candidates by attractiveness and travel cost. Sum the shares to get incremental revenue per site; this prevents the same person from being counted in full for multiple options.
What is the role of qualitative filters after quantitative scoring is complete?
Community sentiment, permitting risk, and brand fit can dominate otherwise strong scores. A red‑yellow‑green review with local experts prevents late surprises and identifies mitigation options like design changes or community benefits.
How should you structure sensitivity analysis for executives?
Vary the few inputs that drive most uncertainty—spend per capita, capture rate, rent, and wage growth—and present tornado charts and best/likely/worst cases. This shows which sites are robust winners and which are fragile bets.
When is it smarter to lease nearby than to build on the top‑ranked parcel?
If time to market is critical, if capital is scarce, or if regulatory timelines are long, leasing can capture most benefits quickly. Run NPV comparisons with realistic option values and exit clauses before committing to construction.