Distribution Center, Warehouse, & Plant LocationsSite SelectionMacroanalysisMacroanalysis IssuesMacroanalysis ApproachMacroanalysis ModelingMacroanalysis ResultsMicroanalysisMicroanalysis – Points of FocusTools for Microanalysis: (Grid Systems)Center of Gravity (C-O-G) ApproachWeighted Center-of-Gravity Approach: Similar to C-O-GSlide 13Slide 14Site SelectionCommon ElementsSlide 17Common ElementsNew Construction Versus Existing FacilityEvaluation of Potential Construction SitesSpecific Evaluation for Constructed or Existing SitesExisting Facilities ConsiderationSlide 23Slide 24Case Study: Boeing 787 FacilitySlide 26Slide 27Slide 28The SC FacilityBrian ChenFung Mandy HauAdriana de la TorreThomasina ScudereSite SelectionProcess broken down into 3 separate focus areasMacroanalysisMicroanalysisSpecific site selectionBoeing Case StudyMacroanalysisTop level analysisHow many locations to choose from?Where are these locations?Costs?Macroanalysis IssuesService RequirementsTransportationMaterials HandlingFixed CostsInventory CostsNumber & Location of FacilitiesMacroanalysis ApproachMacroanalysis ModelingThree major types of modeling usedComputer spreadsheet modelsUses various programs for the input of data and manipulation, to provide quick resultsSpreadsheets allow for the view and compilation of volumes of dataMathematical modelsEverything is placed into a mathematical formula for solvingNetwork simulation modelsSolves various models automatically to provide a listing of all potential sites and which is bestMacroanalysis ResultsThe macroanalysis may yield an answer such as “the mid-western” region or “southeast” regionMicroanalysisIdentifies a particular sector, district or area located in a geographic region identified in the previous Macroanalysis.Microanalysis – Points of FocusAvailability of existing sites locationsPopulation: Labor availabilityTaxes and SubsidiesCompetitive Climate.Suppliers availabilityLocal UtilitiesPotential as a distribution hubHighway accessBusiness activityQuality of Life considerationsWeather threats. Proximity to Airports and seaports.Tools for Microanalysis: (Grid Systems)Analysis of spatial relationships using Mathematical Tools. Center of GravityWeighted Center of GravityCenter of Gravity (C-O-G) ApproachPatterns are set on a map.Grid: horizontal-axis refers to miles east and vertical axis are set to miles north.Points are assigned to the different locations.Average distances east-west (x displacement) and north-south are found (y-displacement)The average is divided by the number of existing facilities.The best location is one withthe coordinates of the above averages (x,y)Weighted Center-of-Gravity Approach: Similar to C-O-GTakes into account the volume a particular facility receives. The location is multiplied by the monthly volume received.The average is calculated.The Weighted center of gravity is determined for the location.Results of MacroanalysisPotential Facility LocationsCollect InformationLaborTaxLocationsBusiness ActivitiesUtilitiesCompetitorsSupport ServicesComparative AnalysisRecommendationMicroanalysisKey issuesSocioeconomic areaGovernment servicesTransportationHighway congestionProximity to air, rail, seaAvailability of laborUnemployment rateLand ValueCompetitive climateSite SelectionCommon ElementsConstruction Site ConsiderationsExisting Facility ConsiderationsCommon ElementsLabor Poolskill level distributionCompetition, Present and FutureNeighborhoods and Surrounding AreasUnion PresenceUtilities and CommunicationsPotential limitationsLong lead time for hook upsService InterruptionsPotential development that can restrain resourcesCommon ElementsSurrounding Neighbors and TenantsPrinciple use of area surrounding siteAvailability of support services and laborAbsence or dominance of similar facilities Local Support ServicesAbsence of services causes higher cost for self sufficiency and downtimeExamples: waste disposal, computer equipment service, fire protection, and sanitationTransportation Pick Up ServicesExamples: parcel deliveries, proximity to parts and air freight terminals, local cartageCommon ElementsLocal TaxesAll taxes may not be reflected in real estate appraisal Could add sufficient cost to operating budgetPersonal taxes may require a higher wage to offsetExamples: corporate, local, regional, personal, property, inventory, fees, licensesFire Codes and ProtectionInterpretation of codes may vary in different jurisdictions which can impact insuranceType of protection provided – volunteer, professionalUnion ActivityAvoidance or allianceAvoid locations know for unions with militant activity, work interruptions, or excessive grievance filingNew Construction Versus Existing FacilityAvailability of existing facilityMake vs. buy financial analysisSufficient lead time to construct and occupy facilityCustomization requirement s of existing facilityDo not limit to one or the otherEvaluation of Potential Construction Sites3 step approachInventory sites for construction (list of sites meeting minimum requirements)AcreageZoningSupport ServicesFamiliarization with local building practices and preparation proceduresLand preparationWeather effectsRegional roof requirementsLocal construction practice and costConstruction methodsBuilding CodesSpecific Site EvaluationsSpecific Evaluation for Constructed or Existing SitesZoning and zone appeal processConstruction permits, code requirements, exceptions, and appeal processBuilding site restrictionsEnvironmental ImpactTopographical mapsIncentivesExisting FacilitiesConsideration First sites must meet minimum requirements in terms of square footage, land use, and other non-correctable physical characteristicsSecond a list of recently sold or leased properties in the same geographical areas should be reviewedExisting FacilitiesConsideration Third the physical characteristics of the properties should be includedTotal square footageType of constructionAdditionsNumber of dock doorsSpace on site for expansionSprinkler systemsCeiling HeightDate of ConstructionSquare footage of office spacePaved yard
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