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  • Essay / Importance of Facility Location in Strategic Meetings...

    In today's competitive environment, organizations are focusing on the importance and impact that facility location can have on the achievement of strategic objectives, at the lowest possible cost. Deciding where to locate a facility is a complex task that involves both qualitative and qualitative factors to achieve and maintain 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 adjusted relatively easily to meet changes in demand and throughout the supply chain. Conversely, 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, and Naseraldin , 2011, p. 774). The decision regarding facility location 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 at each site, and what markets each facility should serve” (Soltani, 2009, p. 657). In addition to these issues, management is responsible for identifying future uncertainties such as labor, social and cultural factors, tariffs and tax incentives, geographic proximity of customers and suppliers, local economies as well as the weather. An important aspect that an organization must understand is the impact that future growth can have on its business model and long-term goals. Once a decision on the location of a facility is implemented, it is difficult to reverse. However, the successful implementation of an installation location allows the organization to gain a competitive advantage while providing a high level of paper......important factor, companies are turning away from countries where the Labor costs are historically lower. and focus on workforce qualification, flexibility and mobility. This focus contributes to the overall success of a facility's location by being able to maintain a skilled workforce and quality of life. The complex task of evaluating a facility's location is one that will have a long-term impact on a company's success in the industry and long term. long-term objectives. The evaluation process is a long and tedious task that involves all members of the supply chain, where each of these factors plays an important role in the facility location decision. For a decision to relocate or expand to be made successfully, these factors must be ranked and weighted against the long-term objective of the business in order to gain a competitive advantage and maintain service levels high customer..