Facility Location Planning

The view of the best location for a business, or for one of its various functions, can vary widely depending upon the seat in which one sits. A CEO is likely to focus on macro factors that significantly impact the corporate bottom line. All the individuals involved with operating cost structure and market positioning over an extended period of time usually provide their prism for view of a location's suitability. A corporate real estate executive charged with keeping real estate and facility costs down may focus more intently on the costs tied directly to a specific location and the terms of the real estate deal. And real estate services providers often evaluate a site or location based on the economic efficiency of a deal. None of these views is wrong, but each is typically incomplete. A process that focuses a company on incorporating all of these considerations in a strategic business context will deliver the best location for conducting a specific business function(s). Strategic context is essential to success.

Business location implies a much broader, more encompassing view of place. A “business” location -- versus a “site” location -- incorporates both quantitative and qualitative factors associated with a specific business, and it must be evaluated in the context of its ability to help achieve overall business goals. Depending upon the actual business functions that will occur at a specific location, the appropriate weighting of the various attributes typically becomes an exercise of assembling all of the essential business factors and considering them in the context of meeting overall business goals.

The ultimate decision of which site will best fill a company's specific requirements must be the result of first considering the best place for the company to perform a specific function. Unless the strategic context for why the company chooses to be there in the first place is incorporated into the site selection process, the final decision cannot effectively satisfy the location attributes that will lead to business success. Understanding this view, a company will find itself in a position to approach site selection from the business location perspective first; then the best physical site for the job will follow.
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