Location Facility Essay

2460 WordsNov 10, 201110 Pages
An important decision is where to locate an organization’s facilities. The external supplier interface process and the customer interface process can be directly affected by facility locations. They can affect the supplier relationship process, for example, because the global economy opens up many new options for suppliers across the world. These options may offer lower labor costs or better quality of outsourced services or products. At the same time, greater distances may mean higher transportation costs or difficulties in coordinating with suppliers. The customer relationship process can also be affected. If the customer must be physically present at the process, it is unlikely that a location will be acceptable if the time or distance between the service provider and customer is great. On the other hand, if customer contact is more passive and impersonal, or if possessions or information is processed rather than people, then location is less of an issue. Information technology might support an effective customer relationship process, even if the customer or service facility is at a remote location. One thing is clear: The location of a business’s facilities has a significant impact on the company’s operating costs, the prices it charges for services and goods, and its ability to compete in the marketplace. 7.1. The Globalization and Geographic Dispersion of Operations The term Globalization describes businesses’ deployment of facilities and operations around the world. In the past, industries tended to concentrate in specific areas- for example, fabricated metals manufacturing were concentrated in the industrial belt of the United States and international banking firms were concentrated in London and New York City. Today, this tendency to concentrate in certain geographic regions is lessening. Although electric machinery and electronics remain key

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