Supply Chain and Competitive Advantage Analysis
Supply Chain and Competitive Advantage Analysis
Introduction to Facilities Location Decision Making and Using Life Cycle Assessments to Determine Opportunities for Sustainability in Operations
The decision of where to locate a new manufacturing facility is a complex one that requires careful consideration of a wide range of factors. These factors can be broadly categorized into two groups: location factors and life cycle assessment (LCA) factors.
Location factors are those that are specific to the geographic location of the facility. These factors include:
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Country: The political and economic stability of the country, as well as its tax and regulatory environment, will all play a role in the decision of where to locate a facility.
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Government: The government's policies on trade, labor, and environmental protection will all need to be considered.
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Culture: The culture of the country will also need to be considered, as this will affect how the company interacts with its employees, customers, and suppliers.
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Customer preference: The company will need to consider the preferences of its customers in the Latin American market.
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Labor: The availability and cost of labor in the country will need to be considered.
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Resources: The availability of raw materials, water, and energy will all need to be considered.
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Financial: The cost of land, construction, and operation will all need to be considered.
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Technological: The availability of technology and infrastructure will all need to be considered.
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Market: The size and growth potential of the market will need to be considered.
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Region: The region of the country will need to be considered, as this will affect the availability of transportation and logistics services.
LCA factors are those that are related to the environmental impact of the facility throughout its entire life cycle. These factors include:
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Cradle-to-grave assessment: This assessment considers the environmental impact of the facility from the extraction of raw materials to the disposal of the product.
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End-of-life programs: These programs are designed to reduce the environmental impact of the product at the end of its life cycle.
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Reduction of costs and materials used: This can be achieved through a variety of methods, such as using recycled materials and designing products for disassembly.
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Reuse of parts of returned products: This can be achieved by refurbishing or remanufacturing returned products.
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Recycling: This can be achieved by collecting and processing used products for reuse or remanufacturing.
Differentiating Location Factors
Not all location factors are equally important to the company's four goals. The following table summarizes the relevance of each location factor to each goal:
| Location Factor | Increasing Customer Base | Reducing Ecological Footprint | Reducing Production Cost | Enabling Multicultural Collaboration |
|---|---|---|---|---|
| Country | Important | Moderately important | Moderately important | Important |
| Government | Moderately important | Moderately important | Moderately important | Important |
| Culture | Moderately important | Moderately important | Important | Important |
| Customer preference | Important | Moderately important | Moderately important | Moderately important |
| Labor | Moderately important | Moderately important | Important | Important |
| Resources | Moderately important | Important | Important | Moderately important |
| Financial | Important | Important | Important | Important |
| Technological | Moderately important | Moderately important | Moderately important | Moderately important |
| Market | Important | Important | Moderately important | Moderately important |
| Region | Moderately important | Moderately important | Moderately important | Moderately important |
| Raw materials | Moderately important | Important | Important | Moderately important |
| Markets | Important | Moderately important | Moderately important | Moderately important |
| Labor | Important | Moderately important | Important | Moderately important |
| Community | Moderately important | Moderately important | Moderately important | Important |
| Education | Moderately important | Moderately important | Moderately important | Important |
| Shopping | Moderately important | Moderately important | Moderately important | Moderately important |
| Recreation | Moderately important | Moderately important | Moderately important | Moderately important |
| Transportation | Moderately important | Moderately important | Moderately important | Moderately important |
| Utility cost | Moderately important | Moderately important | Important | Moderately important |
| Taxes | Moderately important | Moderately important | Important | Moderately important |
| Regulations | Moderately important | Moderately important | Moderately important | Important |
| Site | Important | Moderately important | Moderately important | Moderately important |
| Land | Moderately important | Moderately important | Moderately important | Moderately important |
| Transportation | Moderately important | Moderately important | Moderately important | Moderately important |
| Zoning | Moderately important | Moderately important | Moderately important | Moderately important |
| Other restrictions | Moderately important | Moderately important | Moderately important | Moderately important |
| Global | ||||
| Trade agreements | Moderately important | Moderately important | Moderately important | Moderately important |
| Technology | Moderately important | Moderately important | Moderately important | Moderately important |
| Legal | Moderately important | Moderately important | Moderately important | Moderately important |
| Regulatory | Moderately important | Moderately |