1、Contemporary LogisticsTwelfth EditionChapter 9Family LocationLearning Objectives(1 of 2)9.1 To examine the strategic importance of facility location9.2 To explain the general process of determining the optimum number of facilities9.3 To describe the major factors that influence facility location9.4
2、To examine a sites specialized location characteristics Learning Objectives(2 of 2)9.5 To explain location decisions using simple grid systems9.6 To learn about facility relocation and facility closingFacility Location Facility location Refers to choosing the locations for distribution centers,wareh
3、ouses,and production facilities to facilitate logistical effectiveness and efficiencyThe Strategic Importance of Facility Location(1 of 3)Factors that can influence facility location decisions include:Cost considerationso Consumers sensitized to buy only when prices are lowo Low price/low cost frame
4、work led companies to operate in countries with low-cost laboro In recent years,organizations are reexamining the low-cost labor paradigm The Strategic Importance of Facility Location(2 of 3)Factors that can influence facility location decisions include:Customer service expectationso Expectations co
5、ntinue to increase over timeo Customers looking for faster and more reliable order cyclesThe Strategic Importance of Facility Location(3 of 3)Factors that can influence facility location decisions include:Location of customer or supply marketso Population shifto Economic growtho SustainabilityTable
6、9.1:Five Most Populous States in the United States1970,1990,and 2014Rank1970199020141CaliforniaCaliforniaCalifornia2New YorkNew YorkTexas3PennsylvaniaTexasFlorida4IllinoisPennsylvaniaNew York5TexasIllinoisIllinoisSource:Derived from data at and Determining the Number of Facilities Facilities are gen
7、erally added when service levels become unacceptable Software packages exist to help in determining the number and location of facilities Key issuetime it takes to get from facility to majority of the U.S.(or target)population Moving from 1 to 3 facilities saves 1 day lead time Moving from 3 to 10 f
8、acilities saves day lead time11www.chicago-Figure 9.1:Chicago Consultings 10 Best Warehouse NetworksSource:Courtesy of Terry Harris,Managing Partner of Chicago Consulting.General Factors Influencing Facility Location(1 of 7)Influences on location of manufacturing,processing,or assembly facility Raw
9、materials Component parts Labor Markets Location of warehouses,distribution centers,and cross-docking facilities are influenced by locations of plants whose products they handle and markets they serveGeneral Factors Influencing Facility Location(2 of 7)Natural resources Pure materials Weight-losing
10、products Weight-gaining products Population characteristicsmarket for goods Population characteristicslabor Maquiladora Sweatshops Right-to-work laws Expatriate workersGeneral Factors Influencing Facility Location(3 of 7)Taxes and incentives Inventory tax Incentive packages Transportation considerat
11、ions Availabilityo Refers to the number of transportation modes(intermodal competition)ando The number of carriers within each mode(intramodal competition)CostFigure 9.2:Truck Distances from NebraskaSource:Reprinted with permission from Inbound Logistics magazine(September 2011) Inbound Logistics 20
12、14.General Factors Influencing Facility Location(4 of 7)Proximity to industry clusters Agglomeration concept,better known today as the industry cluster conceptoDiffer in shape and sizeoOne type focused on a particular industryoAnother type offers organizations proximity to key suppliers Catalyst in
13、the development of supplier parksGeneral Factors Influencing Facility Location(5 of 7)Trade patternsCommodity flow data studied to determine changes occurring in the movement of raw materials and semiprocessed goodsoHow much is being produced?oWhere is it being shipped?Trade agreements(e.g.,NAFTA)Ge
14、neral Factors Influencing Facility Location(6 of 7)Quality-of-life considerations Cost of living Educational opportunities Crime rates Employment opportunities Weather Cultural amenities OthersGeneral Factors Influencing Facility Location(7 of 7)Locating in other countries Relevant legal system Poli
15、tical stability Bureaucratic red tape Corruption Protectionism Nationalism Privatization Expropriation(confiscation)Treaties and trade agreementsSpecialized Location Characteristics(1 of 4)Current zoning of the landThere may be limits on how the land can be used Local unionsHave areas of jurisdictio
16、nFirms labor relations manager may have distinct preferences with which locals they are willing to workDifferent supplemental agreements provide companies with differing levels of managerial flexibility(or inflexibility)Specialized Location Characteristics(2 of 4)Title search May be needed to make s
17、ure a parcel of land can be sold and that there are no liens against it Engineers examine site for proper drainage and to determine load-bearing characteristics of the soil Due diligence of environmental factors Brownfieldso Previously used sites that contain chemicals or other types of industrial w
18、asteSpecialized Location Characteristics(3 of 4)Free Trade Zone Highly specialized sites in which to locate Also known as:o Foreign trade zoneso Export processing zoneso Special economic zones Nondomestic merchandise may be stored,exhibited,processed,or used in manufacturing operations without being
19、 subjected to duties and quotas until the goods or their products enter the customs territory of the zone countrySpecialized Location Characteristics(4 of 4)Free trade zone Have become extremely popular in recent years Often located at,or near,water ports,although they can also be located at,or near
20、,airports Free trade subzones refer to specific locations at an existing free trade zoneo Particularly popular with automotive manufacturersFigure 9.3:Example of Transportation Forces Dictating Plant LocationAdapted from Alfred Weber,Theory of the Location of Industries,translated by Carl J.Friedric
21、h(Chicago:University of Chicago Press,1929).Finding the Lowest-Cost Location Using Grid Systems Grid systems Allow one to analyze spatial relationships with mathematical tools Checkerboard patterns Placed so that they coincide with northsouth and eastwest line on a mapFigure 9.4:Center-of-Gravity Lo
22、cation for a Warehouse Serving Five Retail StoresTable 9.2:Weighted Center-of-Gravity ExampleStoreNorthLocationEastLocationMonthlyVolume(tons)North VolumeEast Volume1313(3 3)=9(1 3)=32335(3 5)=15(3 5)=153244(2 4)=8(4 4)=164122(1 2)=2(2 2)=45366(3 6)=18(6 6)=36Totalblankblank205274Weighted averagebla
23、nkblankblank2.63.7Facility Relocation and Facility Closing(1 of 5)Two specialized situations regarding location choice Facility relocationo Associated with business growth Facility closingo Associated with business contractionFacility Relocation and Facility Closing(2 of 5)Facility relocation Occurs
24、 when a firm decides that it can no longer continue operations in its present facility and must move operations to another facility to better serve suppliers or customers Common reason for facility relocationo Lack of room for expansion at current siteFacility Relocation and Facility Closing(3 of 5)
25、Facility relocation Decision involves a comparison of the advantages and disadvantages of a new site to the advantages and disadvantages of an existing location Must also consider the potential consequences of relocation on their human resources(consequences that may not be easily quantified)Must ke
26、ep current employees informed Must be prepared for unplanned glitches during transition to prevent customer service issuesFacility Relocation and Facility Closing(4 of 5)Facility closing Occurs when a company decides to discontinue operations at a current site because the operations may no longer be
27、 needed or can by absorbed by other facilities Examples leading to facility closure include:o Eliminating redundant capacity in mergers and acquisitionso Improving supply chain efficiencyo Poor planningo Insufficient volume of businessFacility Relocation and Facility Closing(5 of 5)Facility closing
28、Worker Adjustment and Retraining Notification(WARN)Act Human impact must be consideredo Employees should be kept informedo Individuals are losing jobs and payo Individuals suffer a loss of self-esteem Poorly handled closings can lead to negative publicityKey Terms(1 of 2)Agglomeration(industry clust
29、er)Brownfields Center-of-gravity approach Expatriate workers Facility closing Facility location Facility relocation Free trade zone Grid systems.Intermodal competition Intramodal competition Inventory tax Locavore strategyKey Terms(2 of 2)Maquiladora plants Nearsourcing Pure materials Quality-of-life considerations Right-to-work laws Supplier parks Sweatshops Weight-gaining products Weight-losing products
