plant location
PLANT LOCATION
The problem of how many facilities to have and where they should be located is encountered by service and product organization in both the public and private sectors. Banks, restaurants, recreation agencies, and manufacturing companies are all concerned with selecting sites that will best enable them to meet their long-term goals. Since the operation managers fixes many costs with the location decision, both the efficiency and effectiveness of the conversion process are dependent upon location. This chapter will examine the facilities location issues in details by taking into account the reasons for location changes and the factors affecting the selection of location. We shall also discuss the procedure for facility location and related issues in the sections to follow.
REASONS FOR LOCATION CHANGES
Different situations for location change could be (i) a new plant is just being started, (ii) a new branch of an existing plant is to be located, or (iii) a new location for an existing plant is being sought. In addition to the need for greater capacity, there are other reasons for changing or adding locations:
• Changes in resources may occur. The cost or availability of labor, raw materials, and supporting resources (such as subcontractors) may change.
• The geography of demand may shift. As product markets change, it may be desirable to change facility location to provide better service to customers.
• Some companies may merge, making facilities location redundant.
• New products may be introduced, changing the availability of resources and markets.
• Political and economic conditions may change.
Location decision should be based on long range policy and forecasts, e.g. company’s expansion policy, anticipated diversification of products, changing markets, changing sources of raw materials, etc.
Other decisions to be made before a plant selection/construction are: (a) products or services to be made or offered in the plant, (b) type of
The problem of how many facilities to have and where they should be located is encountered by service and product organization in both the public and private sectors. Banks, restaurants, recreation agencies, and manufacturing companies are all concerned with selecting sites that will best enable them to meet their long-term goals. Since the operation managers fixes many costs with the location decision, both the efficiency and effectiveness of the conversion process are dependent upon location. This chapter will examine the facilities location issues in details by taking into account the reasons for location changes and the factors affecting the selection of location. We shall also discuss the procedure for facility location and related issues in the sections to follow.
REASONS FOR LOCATION CHANGES
Different situations for location change could be (i) a new plant is just being started, (ii) a new branch of an existing plant is to be located, or (iii) a new location for an existing plant is being sought. In addition to the need for greater capacity, there are other reasons for changing or adding locations:
• Changes in resources may occur. The cost or availability of labor, raw materials, and supporting resources (such as subcontractors) may change.
• The geography of demand may shift. As product markets change, it may be desirable to change facility location to provide better service to customers.
• Some companies may merge, making facilities location redundant.
• New products may be introduced, changing the availability of resources and markets.
• Political and economic conditions may change.
Location decision should be based on long range policy and forecasts, e.g. company’s expansion policy, anticipated diversification of products, changing markets, changing sources of raw materials, etc.
Other decisions to be made before a plant selection/construction are: (a) products or services to be made or offered in the plant, (b) type of