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Physically-aware N-detect (PAN-detect) test improves defect coverage by exploiting defect locality. This paper presents physically-aware test selection (PATS) to efficiently generate PAN-detect tests for large industrial designs. Compared to traditional N-detect test, the quality resulting from PAN-detect is enhanced without any increase in test execution cost. Experiment results from an IBM in-production application-specific integrated circuit demonstrate the effectiveness of PATS in improving defect coverage. Moreover, utilizing novel test-metric evaluation, we compare the effectiveness of traditional N-detect and PAN-detect, and demonstrate the impact of automatic test pattern generation parameters on the effectiveness of PAN-detect.