Impact facility layout and/or facility location has in the realm of Operations Management
Layout and location have a tremendous impact on operations. The layout should be adjustable to meet changing production needs. Since layout is the physical disposition of the company, layouts should allow communication capability within various areas of the business. Example: When considering communication capabilities in the layout, ease of communication should allow effective interactions with vendors as well as customers and meeting their needs in a timely manner. The layout should (or arranging the work space) should be so that the flow of information, goods, and employees can move effectively and efficiently through the production system. Example: The facility should be laid out in a best manner that utilizes the provided space to meet the company’s production needs (utilizing more vertical space than horizontal space). Support personnel should be strategically placed where they can best assist the operations area.
The location has a great impact because the cost of producing goods and/or providing services affects profits and the price at which goods and services are offered. Being in the right location is a key factor for successful operations management. The company should determine the maximum total cost they are willing to pay for a new location, including distribution capabilities, land, labor, taxes, utilities, etc. Also to be considered is the transportation cost to ship goods and the loss of customers if the company moves too far away. Company’s needs and objectives should be considered when considering a location. Example: In some areas, companies face labor problems because of the limited number of potential employees from which to choose. The company should consider whether the location can meet all of its labor needs. The company will need a competent qualified labor supply in or near the location. This will lower the labor cost instead of paying to...
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