Page 141 - DMGT501_OPERATIONS_MANAGEMENT

Unit 5: Facility Location

many potential sites exist, a thorough evaluation is required of sites that are potentially very Notes
similar. For service and retail operations, customer concentrations become a very important
consideration in selecting a site within a community, as does cost.

Notes Plant specific factors are:
1. Customer base 7. Land use restrictions
2. Construction/Leasing cost 8. Traffic
3. Land cost 9. Safety/Security
4. Site size 10. Competition
5. Transportation 11. Area business climate
6. Utilities 12. Income level

Task Take examples of any three manufactured products and three services firms
in your city and find out why they opened their facilities in your city.

5.5 Procedures for Location Decisions

At macro level, the plans of the site are developed. These plans should include number, size, and
location of buildings. It should also include infrastructure such as roads, rail, water, and energy.
Planning of this stage has the greatest strategic impact on the facility planning decision. This is
the time to look ahead and consider the different impacts and site and plant expansions leading
to the eventual site saturation. Planning at the macro level stage should include the following:
1. Development of a facility master plan to guide facility investments over a multi-year
period
2. Impact planning
3. Evaluation

4. Facility layout, space allocation, and capacity
5. Development of space standards.

5.5.1 Facility Master Plan

The facility master plan helps plan:
1. Right services: The right services consistent with the organization's mission, strategic
initiatives, and market;
2. Of the right size, based on projected demand, staffing, and equipment/technology;
3. At the right location based on access, operational efficiency, and building suitability;
4. With the right financial structure.

Facility master planning strategy involves examining the existing facilities; the sizing of future
facilities and site amenities; the integration of these facilities into the site; traffic flow and
circulation; and the analysis of any impact that this development will have on the site with
respect to environmental issues.

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