Technical and Operational Feasibility for Industrial Projects: How to Turn an Idea into a Successful Production Line

Executive Summary

Technical & Operational Feasibility is the true engine behind any industrial or manufacturing project.

While a financial feasibility study answers “Is the project profitable?”, the technical feasibility study answers “Is the project viable, and how will it operate?”

This guide delves into selecting the right technology, choosing a project location in industrial cities, designing supply chains, and efficiently managing daily operations.

The objective is to equip readers with the criteria that ensure continuous production while minimizing both technical and financial waste.

Glossary of Technical and Operational Terms

Professional Description

Term
The maximum output a factory can produce within a given period. Production Capacity
The time elapsed from ordering raw materials to their delivery. Lead Time
A reference guide detailing how each task within the project should be performed. SOPs (Standard Operating Procedures)
Processes ensuring the product meets defined specifications. Quality Control (QC)
Areas with dedicated infrastructure to support manufacturing facilities. Industrial Zones

1. Importance of Technical Feasibility in the Arab Industrial Renaissance

The Arab region is experiencing an unprecedented industrial revolution, from clean energy projects to food and manufacturing industries.

Key differentiators in the region include specialized industrial zones such as MODON (Saudi Arabia), JAFZA (Dubai), and the Suez Canal Economic Zone (Egypt).

  • Advantage: These zones offer plug-and-play services, significantly reducing technical setup costs.

  • Challenge: Strict adherence to environmental standards and local/international certifications (e.g., ISO, SASO).

2. Pillars of Technical Feasibility for Factories

A professional industrial feasibility study focuses on four core pillars:

A. Location and Infrastructure
The site is more than land—it’s access to resources. Evaluate:

  • Utilities: Electrical load, water supply, industrial wastewater treatment.

  • Logistics: Proximity to ports, airports, and highways to minimize shipping costs.

B. Technology and Production Lines
Should the production line be manual, semi-automated, or fully automated?

  • Trade-off: Automation increases CapEx but reduces OpEx over time and ensures consistent quality.

  • Maintenance Contracts: Ensure local availability of spare parts to prevent production downtime.

C. Process Engineering
Design the flow of raw materials from receipt to finished product.

  • Objective: Minimize internal distances and prevent operational bottlenecks.

D. Specialized Human Resources
Define the technical organizational structure: number of engineers, technicians, and operators needed, along with training plans.

3. Operational Feasibility: Managing the Daily Pulse of the Project

After establishing the factory, how do you ensure continuity? Operational feasibility addresses:

  1. Procurement Management: Build relationships with reliable suppliers and secure strategic raw material stock.

  2. Standard Operating Procedures (SOPs): Document every step to ensure consistent performance with or without direct supervision.

  3. Preventive Maintenance: Scheduled machinery maintenance to avoid costly unexpected breakdowns.

4. Efficiency Levers: Accelerating Technical Feasibility

  • Digital Twins: Simulate the production line digitally before purchase to verify efficiency.

  • Automation & AI: Integrate ERP systems linking sales, inventory, and production automatically.

  • Local Suppliers: Reduce global supply chain risks and increase local content.

5. Sources of Technical and Operational Data (2020–2026)

  • Standards and Quality Organizations: GCC Standards Organization (GSO), Egyptian Organization for Standardization & Quality.

  • Ministries of Industry & Energy: Industrial city maps and utility cost data.

  • UNIDO: Technical templates for small and medium industrial projects.

6. Case Study: Eco-Friendly Packaging Factory

  • Challenge: High and inconsistent costs of imported raw materials.

  • Technical Solution: Adjusted the production line to incorporate 40% locally recycled materials.

  • Result: Production costs decreased by 15%, and the project received government incentives for supporting the green economy, unexpectedly increasing the Net Present Value (NPV).

Checklist for Technical and Operational Readiness

  1. Is the land size sufficient for future factory expansion?

  2. Are electrical loads verified with the local utility provider?

  3. Is there a Risk Register for major technical failures?

  4. Are alternative suppliers for key raw materials contracted?

  5. Does the factory layout comply with occupational health and safety standards?

  6. Have industrial waste disposal costs been calculated?

  7. Is the chosen technology operable with the available local workforce?

Common Mistakes in Technical Studies

  • Neglecting maintenance costs: Only considering machine price while ignoring operating and annual maintenance costs.

  • Overestimating production capacity: Purchasing oversized machinery for an immature market, wasting capital.

  • Ignoring environmental regulations: Starting construction before approvals, risking project shutdown.

Key Takeaways

  1. Technical and financial feasibility are two sides of the same coin: any technical error directly translates into financial loss.

  2. Strategic location in industrial zones saves on infrastructure and logistics costs.

  3. Appropriate technology is not always the most expensive but the one that best fits the local market size.

  4. SOPs transform a factory from personal effort into a sustainable institution.

  5. Local content is a strategy to reduce risks and increase profitability.

7-Point Action Plan for Industrial Investors

  1. Define the product: specify final technical specifications (Specs).

  2. Select technology: compare three production line suppliers (European, Asian, local).

  3. Secure land: initiate applications in approved industrial zones.

  4. Design workflow: map production flow to ensure efficiency.

  5. Workforce planning: identify required skills and recruit competent personnel.

  6. Secure supply chains: sign preliminary MoUs with raw material suppliers.

  7. Obtain licenses: begin environmental and industrial approvals immediately.

References:

  • UNIDO Industrial Design Guide.

  • Arab Ministries of Industry reports on incentives and industrial zones (2025).

  • Arab Industrial Development & Standardization & Mining Organization – periodic reports.