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facility location ppt from ops mgmt
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LOGO
PRESENTED BY:- PRESENTED BY:-
GROUP NO. – 5GROUP NO. – 5LALITA KALWANI-2042LALITA KALWANI-2042
IQBAL SINGH-2043IQBAL SINGH-2043KARISHMA TRIKHA-2044KARISHMA TRIKHA-2044
SHERIN ALEX-2047SHERIN ALEX-2047 APOORVA GARG-2048APOORVA GARG-2048
FACILITY LOCATION
FACILITY LOCATION-INTRODUCTION
It is an integrating phase of production systems of any organization.
It is defined as a placement of a facility with respect to customers, suppliers, labor and other facilities with which it interacts.
Location decisions are critical at several level of geography. e.g. : in case of retailing.
Location decision is a long term strategic decision because it has a major impact on the organization’s ability to compete.
LOCATION AS A STRATEGIC DECISION
OBJECTIVE- To maximize the benefit of location to the firm.
Facility location has a long term impact on the supply chain and must be a part of firm’s strategy
Regional facility strategy
Product facility strategy
TYPES OF FACILITIES
MANUFACTURING FACILITY
Physical proximity to customers is not necessary.
Being near to competitors may be desirable.
E.g.- Pharmaceuticals companies in BADDI(H.P)
SERVICE FACILITY
Physical proximity to customers is necessary.
Being near to competitors may not be desirable.
E.g.- Fast food restaurants
FACTORS AFFECTING LOCATION DECISION
QUANTITATIVE FACTORS:
Labor cost
Material cost
Transportation into and out of the facility
Utilities, taxes, real estate costs and construction cost
Government incentives
FACTORS AFFECTING LOCATION DECISION Contd..
QUALITATIVE FACTORS:
Quality of life
Proximity to labor
Proximity to suppliers
Proximity to customers
Proximity to competitors
Demographic factors
LOCATION ANALYSIS TECHNIQUES
Transportation model
Factor rating method
Center of gravity method
REASONS FOR LOCATIONAL CHANGES
Changes in resources
Geography of demand may shift
Mergers
Need for greater capacity
Changes in political and economic conditions
BEHAVIORAL IMPACT IN FACILITY LOCATION
CULTURAL DIFFERENCES Employees will be hired from within the new locale
Establish community relations to fit into the locale
Adapt to norms and customs of subcultures
Greater cultural differences at international level
e.g. Japanese work tradition vs. Western industrial society
JOB SATISFACTION
CASE STUDY: Japanese Automotive Industry Locates In North America
1982, Marysville -Honda Motor Company opened doors to first Japanese-owned facility to manufacture
automobiles
Capacity grew to more than 500,000 units per year
Honda started exporting cars from Marysville to Tokyo
Followed by transplants from Nissan, Toyota, Mazda
Total ten plants with capacity of nearly 2.5 million units per year
What caused the Japanese to locate this much capacity in North America??
Japanese were responding to pressure from U.S. automakers and the UAW
Seven transplants avoided union contracts by locating in rural or semi-rural areas of Mid west
Locating facilities in the Midwest gave the Japanese credibility with the car buying population in the Midwest
Three transplants were joint ventures with the U.S. automakers
Final Thought
The ideal location for many companies in the future will be a floating factory ship that will go from port to port, from country to country – wherever cost per unit is lowest.
THANK YOU