The Importance Of Facility Location In Logistics And Supply Chain
The logistics and supply chain are complex and require strategic decisions to be made in order to function efficiently and effectively. The industry is constantly changing, and this puts a lot of pressure on logistics managers. All activities must be adjusted and improved by management. The location and size of the facilities is important in the logistics chain. The location of facilities can be influenced by many factors, including the location and size of production plants, assembly sites, or distribution centres. Location of the facility is crucial to the success of a logistics network.
As companies become more aware of the benefits of choosing an ideal facility location, they also begin to realize the disadvantages. Logistics is primarily focused on reducing costs, improving efficiency and customer service. Successful facility placement decisions can result in drastic cost savings and improved customer service. Inefficient operations can be caused by a bad decision on facility location. Additional costs may also result. These factors will affect the overall effectiveness and competence of the business. Logistics managers evaluate current facility locations.
As technology changes and competition increases, organizations are forced to invest more in their logistical systems and put them in the forefront. The location of plants, distribution centers and retailers has a significant impact on supply chain profitability. The location of production plants, sourcing locations, and stocking areas is the first thing to do when creating a supply network. It is important to commit resources in order to create a sustainable plan. After the location, size, and number are decided, it can be seen how the product could flow to the customer. These decisions can have a major impact on a company’s revenue, costs, and customer service levels.
The right location can improve customer service and reduce costs.