Topic > Importance of Facility Location in Achieving Strategic Objectives...

In today's competitive environment, organizations are focusing their attention on the importance and impact that a facility's location can have on achieving of strategic objectives, at the lowest possible cost. Deciding on the location of a facility is a complex task involving both qualitative and qualitative factors to achieve and sustain an efficient supply chain. Facility location decisions closely involve other supply chain management decisions such as transportation and inventory management; however these factors can be modified relatively easily to respond to changes in demand and the entire supply chain. In contrast, facility location decisions are “often strategic in nature and involve long-term decisions, exposing companies to many uncertainties over the life of a facility” (Baron, Milner, & Naseraldin, 2011, p. 774) . The facility location decision involves several fundamental questions such as “where to locate the organization's production facilities, how large each should be, what goods or services should be produced in each location, and which markets each facility should serve” (Soltani, 2009, p. 657). In addition to these questions, management is tasked with identifying future uncertainties such as workforce, social and cultural factors, tariffs and tax incentives, geographic proximity to customers and suppliers, local economies, and weather conditions. An important aspect that an organization must understand is the impact that future growth could have on the business model and long-term objectives. Once the facility location decision is implemented, the decision is difficult to reverse. However, the successful implementation of a facility location allows the organization to gain a competitive advantage while providing a high level…an important factor, companies are moving away from countries with historically lower labor costs and focus on job qualification, flexibility and mobility. This focus contributes to the overall success of a facility's location by being able to retain a skilled workforce and quality of life. The complex task of evaluating the location of a facility will have a long-term and long-term effect on a company's success in the industry. long-term objectives. The evaluation process is a long and tedious task involving all members of the supply chain, where each of these factors plays an important role in the facility location decision. For a successful relocation or expansion decision to be made, these factors should be ranked and weighted against the company's long-term goal in order to gain a competitive advantage and maintain high levels of customer service..