Facility Location refers to the appropriate location for the manufacturing facility; it should have optimum access to customers, workers, transportation, etc.
The main goal of an organization is to satisfy and delight customers with its product and services. The manufacturing unit plays a major role in this direction. One of the most important factors for determining the success of a manufacturing unit is its location.
To get commercial success and retain its competitive advantage, any international business firm would pay attention to the following critical factors while choosing its business location −
● Customer Proximity − Customer proximity is important to reduce transportation cost and time.
● Business Area − Having other manufacturing units of similar products around the business area is conducive for facility establishment.
● Availability of Skilled labor − There should be skilled labor available in and around the facility location.
● Free Trade Zone − Free-trade zones usually promote and augment the establishment of manufacturing facility by offering incentives in custom duties and applicable levies.
● Suppliers − Continuous availability and quality supply of the raw materials influences in determining the location of production facility.
● Environmental Policy − As pollution control is very important, understanding of environmental policy for the facility location is critical.