Facility Relocation, Merger, and Consolidation

by Greene, Jack

• ISBN13: 9781466379268
• ISBN10: 146637926X
• Format: Paperback
• Copyright: 2011-09-27
• Publisher: Createspace Independent Pub

Summary

Should an organization consider another facility, in addition to or instead of? Characteristics of the organization, the economy and of the facility marketplace will affect the answer. If a company opens a new facility, there will be costs and there may be benefits. The single most important consideration is the most obvious, what does management want to do, where does management want to go? This decision may be subjective and / or consider objective criteria such as location of customers, suppliers, and technology; access to transportation, raw materials, and qualified workers.The purpose of this book is to explore the factors, both objective and subjective, which affect the strategy, and suggest actions to optimize the benefits and reduce the costs. Business strategy involves many elements, not the least of which is facility planning. Sales and costs share a common dependency on facilities, which must produce to meet sales demand at a low cost.Some strategic objectives inherently influence the facilities plan; to expand or consolidate, acquire or divest or vertically integrate, make room for new products or utilize over capacity; all the while maintaining corporate image and satisfying management preferences. Many operating requirements for low costs are a function of the facility and its location, e.g. customer service; inventory levels; equipment capacity and utilization; labor, facility, and utility costs; qualified workers; technology; market and vendor access. The impact of these factors is apparent in the existing location or in other places, but costs and output can certainly be optimized in the existing facilities.A company may consider a location for intangible reasons, such as management preference for a geographic area; management desire to reduce their living cost and tax load; sunshine, mountains, seashore, golf, tennis, skiing; less commuting time; to attract the increasing number of employees who prefer quality of life.Fundamentals of facilities planning tend to remain constant, but objectives, economics, operating characteristics and preferences are unique to each company. Within the fundamentals, no two facility planning tasks are the same, because they are totally dependent on the client situations, strategy, and objectives.