Week 12

We didn't actually meet in class tonight because Mr. Allen had business to take care of out of town.  We still studied chapter 11 from our textbook on our own though.  Chapter 11 discusses Location.  In week 10, we covered chapter 8 on Process Layout.  This chapter is similar in that there are some mathematic equations to use for solving optimal location.  The major difference being that we are looking at building/plant/facility/warehouse location in the world versus process layout/location within a building.

Location plays a critical part in managing value chains.  Some of the dominant factors in determining where to locate manufacturing facilities include:

• Favorable Labor Climate
• Proximity to Markets
• Quality of Life
• Proximity to Suppliers and Resources
• Proximity to Parent Company's Facilities
• Utilities, Taxes, and Real Estate Costs

The factors for determining location for a service organization are the same as those for manufacturing with one important addition: the impact of location on sales and customer satisfaction.  "Customers usually care about how close a service facility is, particularly if the process requires considerable customer contact."

I've considered the possibilty of starting a small tax return preparation business.  The thought has come to mind to bring the service to the customer.  I'm sure it's not a new idea or concept.  It could save time to be in the customer's home where they keep their repository of records because sometimes people aren't sure what records to bring to the office.  Time is wasted contacting the customer for new needed information and then waiting for the new information to arrive.  Often times, multiple reminders are needed.  The customer's home would be a prime location to sit down and complete the tax return.  I only have one major reservation about the idea though--liability risk.  If my computer were to blow-up and start a fire, I would feel better about it happening to my office space versus my customer's home, etc.