How to set up a factory: Steps and tips

Are you wondering how to set up a factory? You should know beforehand that there is no magic formula and each company must be able to apply the work structure that best suits its needs, starting situation and objectives.

However, there are a series of steps and tips that we always recommend to keep in mind. If you execute them correctly and use the right tools to move forward, setting up a factory will usually be profitable and moderately simple. 


First steps to create a factory

You still don't know how to create a factory, but if you follow the first steps one by one, in less time than expected and in a simple way you will be very close to creating a solvent factory.

As in any project or undertaking, the most relevant thing is always to develop a good planning and to have a control of each process that is carried out. Every action must have a result and you should always use metrics to know if that is the desired result and what is the margin for improvement and then improve it. And now we give you some indications to create a factory from scratch:

- A clear business vision

If you are wondering how to set up a factory without it failing in the first year, the answer is, having a clear business vision.

Often, different investors and entrepreneurs believe that a general definition is enough, but many questions need to be answered exactly before starting. For example, who is the customer? What differentiates this factory from others, what is the product, how is it going to be sold, and so forth.

It seems obvious, we know. But it is more common than it seems to start building a factory and make a major investment without a clear business plan.

- Revenue and expense control

Once the main questions have been answered, the actions to be taken and the order will be clearer.

In this sense, it will be necessary to establish a cost or investment for each action. To then calculate the benefit that can be obtained from them in the short, medium and long term. The best option first of all is to choose how these results will be calculated and which program or manager will show them.

At the same time, it will be necessary to control the fixed costs: personnel costs, rent of the premises, electricity, water, taxes, material costs, storage, transport, etc.

- Search for premises or land for the factory

Depending on your sector, the premises or land will have to meet certain characteristics and the location may be more or less important.

Many factors come into play here and something is not better or worse by itself. Is it better to have the factory in Madrid or in Castellón? In the countryside or near the city? On a large or small plot of land? To buy or to rent? Well, it will depend on each project, but what you should know is that this decision is not trivial and can compromise the future of your company.

- Calculate the first investment

As mentioned above, cost management must be implemented for efficient factories and the company's expenses and revenues must be constantly monitored. This is the only way to have a true picture of the project situation.

In this sense, deciding the first investment will be key, although it is not advisable to stop there and, like good chess players, you should think in the medium term to have the situation under control.

-All legal aspects for setting up a factory

Legal regulations are always one of the first steps in any project such as creating a factory, a company or an online business. You will probably need advice and spend a lot of time on it, but it is worth stopping here and not having problems later.

- Select personnel

How do you set up a factory without the right people? Do not rush this step, because it is not only up to you to find the right people for each position. What you must have is a clear profile for each position of responsibility.

- Studying trends, the key to creating a factory

Analyze your competitors carefully in order to incorporate the best of all of them into your proposal. It is also advisable to hire experts to guide you during this process.

- Choose a control and management software or method and system.

For all the steps mentioned above, a clear and efficient control or management system is needed. It must be a system that is unambiguous and capable of storing all data and displaying it in a way that is understandable. For this there can be a professional profile and/or a management tool that will always promote efficiency in production and in the other industrial areas. We recommend you to read this article on how to calculate the oee in production.

Nowadays a month system for factories as the one we commercialize in Mesbook will be a great ally to achieve success.

Tips for setting up your factory successfully

  • Know your industry and the market: you need to know what type of market you are going to enter and what your position will be in relation to others. The better you know your strengths and weaknesses in relation to your industry, the easier it will be to make decisions.
  • Find the right software: most of the problems in the first years come from inaccuracies in the accounts. At the beginning your budget will be more limited and you can't take a lot of losses, so you need to control every action.
  • Focus: since setting up a factory takes so much time, forget about any other entrepreneurial task or any business even if you are not the entrepreneur.
  • Short-, medium- and long-term goals: it is crucial to set goals or a roadmap to achieve.

How to set up a small factory?

If you want to know how to create a small factory you should know that the steps are the same and you will need to do the same processes and dedicate a similar amount of time. The only thing that will probably change is the initial investment, although this will depend on other variables as well, such as the sector.

For example, how to create a brewery will not be the same as creating a car factory or a textile factory. Each sector is different and within these there are also differences depending on the ambition of each project.

- Incorporate the MES System in your company

You already know how to create a factory, or at least, you know the first steps to approach it. It is crucial that all these processes are measured and that the actions are well defined and standardized before making any expenditure or signing any legal aspect.

Therefore, before any progress you need a management and control system, i.e. a factory software. And although you can select personnel to carry out this task, if it is your decision, nowadays this person or persons must also have a trained software, so before you start choose a software that suits you to move forward without errors and guarantee your success.

In MESbook we have different modules for you to choose which MES software best suits your factory. So in the process of learning how to create a factory you will have specialized help .

Our MES system has already helped hundreds of companies to be born and expand within their sector. Contact us and let's start promoting your project together.

Concepcion Albert

Assistant to Commercial Management

Concepcion Albert

Industrial Engineer with more than 15 years of experience in leadership and operations management, developed in the UK and Spain in the food industry and others. Used to train, lead and motivate teams oriented to the achievement and attainment of objectives within a culture of Continuous Improvement, as well as the creation of new business areas.

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