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Unlike other business processes that can be quickly and easily adjusted over time, changing location decisions can be an extremely time-consuming and costly initiative. One of the biggest challenges in finding a suitable location for your facility is that it might be impossible to find one location that is arguably "better" than the other options. This is because there is a multitude of factors that can greatly influence an organization’s decision on where to locate its various operations. In this article, we will outline a general procedure for making such decisions and identify some of the common factors and considerations pertaining to this topic. Location Decision General Procedure
A Note on Offshoring and Global OutsourcingWith the rise of globalization, many organizations dispersed their manufacturing facilities and operations in various locations around the world. For many years, most companies were benefiting greatly from the reduced costs associated with transportation, labor, and raw materials. While offshoring has offered many benefits to companies, there are also additional challenges and risks that come with it. The recent events of the COVID-19 pandemic have highlighted the risks associated with offshoring operations. As restrictions were imposed in facilities around the globe, the world has experienced a surge of shortages and delays. In recent years, manufacturing facilities have seen a shift towards re-shoring their operations to reduce the complexity of the supply chain and allow companies to have greater control over their production process. In addition, rising labor costs in foreign countries, issues with long transportation times, and the rise of automation are making many companies to re-think their facilities' locations. Multi-Plant OrganizationsAs we have seen in the above sections, it can be a real challenge to find a single location that meets your every needs. Some organizations will choose to have multiple plants that concentrate on different processes. These have the advantage of choosing the best location for each process. For example, initial material transformation processes will benefit from being close to the source of the raw materials while later assembly processes may benefit from being located closer to the end customers. In this case, it is more important than ever to ensure good communication through all of a corporation's facilities. In order to coordinate across multiple manufacturing and shipping hubs, an Advanced Planning and Scheduling (APS) and an ERP system should be able to communicate with every facility in real-time. Delays in communication can cause costly mistakes, production overruns, and shipping errors. With two breweries, we need PlanetTogether's analytics tools for increased visibility between our plants. If something happens in Fort Collins, we can now understand our capacity in Asheville, and vice versa. Having PlanetTogether for inter-plant communication is imperative. That is why the ability to update schedules across multiple facilities, quickly add or change orders, and keep internal supply chains in sync becomes essential for optimized operations. Eliminating those delays should be the top priority for operations managers who are looking for ways to improve corporate performance and global planning. PlanetTogether's Advanced Planning and Scheduling software allow manufacturers to perform concurrent planning and scheduling processes and see the impact in all of their facilities in one place. Making changes to the schedule in one plant will automatically be reflected in all of the others to keep things running smoothly and avoid delays in communication. If demand for a particular item increases, the scheduling software is able to split the work between all available facilities to ensure that work is able to run in the most efficient manner possible. Advanced Planning and Scheduling (APS) SoftwareAdvanced Planning and Scheduling Softwares have become a must for modern-day manufacturing operations as customer demand for increased product assortment, fast delivery, and downward cost pressures become prevalent. These systems help planners save time while providing greater agility in updating ever-changing priorities, production schedules, and inventory plans. APS Systems can be quickly integrated with an ERP/MRP software to fill the gaps where these systems lack planning and scheduling flexibility, accuracy, and efficiency. With PlanetTogether APS you can:
The implementation of an Advanced Planning and Scheduling (APS) Software will take your manufacturing operations to the next level of production efficiency by taking advantage of the operational data you already possess in your ERP system. APS is a step in the right direction of efficiency and lean manufacturing production enhancement. Try out a free trial or demo! Related Multi-Plant VideoAPS ResourcesTopics: operations management, Concurrent Planning and Scheduling, Location What are the factors that influence location strategy?The seven factors affecting a location decision in operations management are facilities, competition, logistics, labor, community and site, political risk and incentives, according to Reference for Business.
Which two aspects that could affect the location planning decision most significantly?The top five major factors identified that may strongly influence international location decisions generally were: costs, infrastructure, labour characteristics, government and political factors and economic factors.
What is the importance of facility location planning in the business?A right location provides adequate access to customers, skilled labors, transportation, etc. A right location ensures success of the organization in current global competitive environment.
What is the importance of location planning?Location plays a huge role in attracting and retaining the best employees, many of whom keep a close eye on where they're based in order to optimize work-life balance. Good location decisions can significantly boost a company's long-term performance. Poor ones can cost millions in lost talent, productivity and capital.
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