Business Facilities - December 2008 - (Page D2)

1. How many distribution centers should exist? 2. Where should the distribution centers be located? 3. How much inventory should be stocked at each distribution center? 4. What customers should be serviced by each distribution center? 5. How should the customers order from the distribution center? 6. How should the distribution centers order from vendors? 7. How frequently should shipments be made to each customer? 8. What should the service levels be? 9. What transportation methods should be utilized? Planning a distribution network is a sequential process that continually needs updating. Some companies run into the pitfall of performing steps three through six before collecting and understanding the most important steps, which are numbers one and two. The answer to distribution network planning is only as good as the data put into the analysis. One of the key data requirements in analyzing a distribution network is that of the delivery requirements (time order placement to receipt of the shipment). In general, is it more important to have the goods faster or at a lower price? This will determine how close your distribution center must be to the client. If a lower price is more important to the client, then perhaps it’s more important to have the distribution center in an area that is less urban, closer to a major rail line or in a state that’s a nonunion state, as opposed to being right near the client. Given that question number two, “Where should the distribution center be located?” is considered to be one of the most important questions according to Tompkins, the selection of a site for your distribution center takes time and community due diligence. The best way to narD-2 Motorized forklifts are essential to warehouse distribution operations. row your selection to a few regions or communities is to create a checklist of your key requirements. Some potential considerations, according to Tompkins, include: Workforce Labor unions, availability of qualified personnel, wage levels, accident rates in area, community education or training programs, employment laws, right-towork laws, local safety and health costs, and the availability of management personnel Utilities History of outages, rates, off-peak rates, discounts or penalties, residential rates, water condition and chemical analysis, water sources, refuse and trash collection costs, pick-up frequency, and disposal methods Community Availability of shopping, housing markets and costs, travel and meeting facilities, news media availability, traffic levels, organizations, communications, mail service, health facilities, protective services (fire and police), education, recreation, religious activities, and cultural facilities Existing Industry Major operations in area, possible suppliers and customers, civic participation, union affiliations, environmental conditions, support to the community, and number of plants gained and lost in the last five years Local and State Voting record of incumbents, annual budget, sources of revenue, annexation policies, attitude during strikes, property taxes, sales tax, financial health of state and community, amount of tax free property, and any community taxes Miscellaneous Weather conditions (temperature, rainfall, snowfall, humidity, days of sunshine), planning and zoning history and makeup, and commercial services in area (banks, industrial distributors, office supplies, industrial repair shops) Rail Access Railroad stop-off privileges for partial loading/unloading en route, demurrage charges, reciprocal switching arrangements, pick-up and delivery services, and freight schedules Highway and Truck State laws as to truck size and weight, toll roads and bridges, and condition of roads Other Transport Air: site near airport, schedule of airlines, personnel transport schedules; Water: channels width and depth, terminal facilities, seasonal limitations; Other: bus service, taxi service, rapid transit, and auto rental agencies According to Tompkins, if a community doesn’t meet these requirements, then it should be eliminated A S P E C I A L A D V E RT I S I N G S E C T I O N O F B U S I N E S S FA C I L I T I E S A N D S U P P LY C H A I N M A N A G E M E N T PHOTO CREDIT: DIGITALVISION

Table of Contents Feed for the Digital Edition of Business Facilities - December 2008

Business Facilities - December 2008 Contents First Word Snapshots Corporate Moves: North Carolina Gold Award: New Engine for Growth in Virginia Silver Award: Tennessee Gets the Big Prize Bronze Award: Enrichment in Idaho Falls Honorable Mentions International Reach From America's Heartland Supply Chain Priorities Metro Spotlight: Greenville/ Spartanburg, SC The Magnolia State Has It All A Real Estate Mega-Merger State of the Year Ask the Expert Advertiser Index

Business Facilities - December 2008

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