Operations: Location Decisions
Where to locate the plant/service branch?
- Do we need to operate from multiple sites?
- Where do we locate our production units in Europe or across the globe?
- How are products or work divisions between such sites best arranged.
- Does the customer need to visit the site?
- How well are sites served by transportation infrastructures - road, rail, air, sea? The same question applies to communications.
Location affects staffing policy, materials management and distribution costs. Risks have to be weighed up. Politics enters into the operational equation - cross-border regulation and the economic development policy of governments in relation to firms willing to locate in their areas and bring employment to an area. Even a local authority in the UK in making industrial development and planning decisions may have to agree to improve roads and infrastructure services.
Airbus production is spread across the UK, France, Germany etc. Each country completes part of the process (British Aerospace specialise in the wings and part of the fusilage).
High tech, automated production processes require a supporting infrastructure - educated employees, telecommunications support, expert suppliers. Note however how leading airlines have moved some of their computerised data processing operations to India. The skilled workforce exists and world wide telecommunications networks make it viable to separate the physical location of processing from the points of usage.
Towards the Virual Organisation
For operations managers questions about the virtual organisation are not the subject matter of science fiction.
Industrialisation and concentration of people in factories in the 18th and 19th centuries was an economically driven response exploiting the potential of emergent machine technologies. Large offices are a parallel response. All staff are assembled so that they can interact with each other. Co-ordination and control are facilitiated Today physical location is less of a constraint for information-oriented operations. Tele-working is possible - with office, specialist and managerial staff able to workfrom home or anywhere in the world and able to communicate via world-wide computer to computer links to keep in touch with the office, designers, specialist information services, project team colleagues, customers and suppliers. Video conferencing is a reality. E-mail is a norm. The location decision is not bound by physical position.
References
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