The Problem with the United States Postal Service
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Components of Project Management and Stakeholder Management
There are several components of project management that encompass the spectrum of project management. Right from the initial setting up of the project to the closure, each phase brings a new set of challenges and components to the art of project management. Specifically, the project manager has to manage the team and take bottom-line responsibility […]
Why Donald Trump Will be able to Stop Outsourcing ?
Donald Trump has positioned himself to be a populist leader. Although in reality, he is an opportunist leader. He has promised his voters that he will stop outsourcing and protect their jobs from cheap foreign labor. Most political pundits did not believe Trump will be able to achieve anything of that sort. After all, even […]
Where Does the United States Go From Here and the Impact on Business and Economy?
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Service Module – Setting Up and Configuration Control
It is of utmost importance for any business enterprise to maintain their existing customers. A proper after sales service through quick response prompt delivery is needed for enhancing customer satisfaction. Service need may encompass scheduled as well as unscheduled maintenance, warranty management, defect identification etc. Salient feature of a service related module: Proper and Systematic […]
Facility Location is the right location for the manufacturing facility, it will have sufficient access to the customers, workers, transportation, etc. For commercial success, and competitive advantage following are the critical factors:
Overall objective of an organization is to satisfy and delight customers with its product and services. Therefore, for an organization it becomes important to have strategy formulated around its manufacturing unit. A manufacturing unit is the place where all inputs such as raw material, equipment, skilled labors, etc. come together and manufacture products for customers. One of the most critical factors determining the success of the manufacturing unit is the location.
Facility location determination is a business critical strategic decision. There are several factors, which determine the location of facility among them competition, cost and corresponding associated effects. Facility location is a scientific process utilizing various techniques.
For a company which operates in a global environment; cost, available infrastructure, labor skill, government policies and environment are very important factors.
A right location provides adequate access to customers, skilled labors, transportation, etc. A right location ensures success of the organization in current global competitive environment.
A geographic area becomes a focal point for various facility locations based on many factors, parameters and issues. These factors are can be divided into primary factors and secondary factors.
A primary factor which leads to industrialization of a particular area for particular manufacturing of products is material, labor and presence of similar manufacturing facilities. Secondary factors are available of credit finance, communication infrastructure and insurance.
Facility location is critical for business continuity and success of the organization. So it is important to avoid mistakes while making selection for a location. Errors in selection can be divided into two broad categories behavioral and non-behavioral.
The goal of an organization is customer delight for that it needs access to the customers at minimum possible cost. This is achieved by developing location strategy. Location strategy helps the company in determining product offering, market, demand forecast in different markets, best location to access customers and best manufacturing and service location.
If the organization can configure the right location for the manufacturing facility, it will have sufficient access to the customers, workers, transportation, etc. For commercial success, and competitive advantage following are the critical factors:
Customer Proximity: Facility locations are selected closer to the customer as to reduce transportation cost and decrease time in reaching the customer.
Business Area: Presence of other similar manufacturing units around makes business area conducive for facility establishment.
Availability of Skill Labor: Education, experience and skill of available labor are another important, which determines facility location.
Free Trade Zone/Agreement: Free-trade zones promote the establishment of manufacturing facility by providing incentives in custom duties and levies. On another hand free trade agreement is among countries providing an incentive to establish business, in particular, country.
Suppliers: Continuous and quality supply of the raw materials is another critical factor in determining the location of manufacturing facility.
Environmental Policy: In current globalized world pollution, control is very important, therefore understanding of environmental policy for the facility location is another critical factor.
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