The pressure to find a secure, capable and cost-effective environment for production can mean the relocation of a production firm even a thousand miles away to find the favorable open conditions for production. However, even though there are also some push factors that might be considered to relocate; there are more of the pull factors to a new location to set up a production firm. Hence, this paper aims to outline some of the motivating factors that may facilitate the relocation of a production facility. For instance, how the relocation of a manufacturing facility differs from a service provider company, the considerations to make during the relocation of either and some of the critical metrics to be considered when relocating a production firm in which case the memory chip manufacturer intends to transfer one of their existing plants. Furthermore, it focuses on the five metrics which are to be regarded when pointing a new site for relocating a facility such as the cost, capacity, capability, culture and even communication with the company’s headquarters without barriers.
Motivations that Causes Firms to Initiate a Facility’s Location or Relocation Projects
In this case, the memory chip manufacturing firm needs to pay attention to the relocation of one of their existing plants which is the company’s biggest deal for development. Consequently, in this regard, some of the noteworthy influences towards the instigation of facilities’ locality are associated with significant business aspects. To begin with, the memory chip manufacturing company has got the strategies in place to embark on repositioning projects for the development of the scope of their business in fresh aim market, to hunt for reimbursements from the business prospects. Additionally, coping up with the fluctuations in the socio-political and permissible landscapes of activity concerning the tax-based customs and stipulations could be a motivating factor for the memory chip business. Subsequently, another significant motivating factor is that the memory chip manufacturer is associated with the variations in the convenience to prerequisite assets in the market for the accessibility to the producers. Reduction of production cost through the hiring of experienced personnel is also another motivating factor that can push for the relocation of an already existing plant. The memory chip manufacturing company needs to concentrate on accumulating its revenues by relocating its existing plant.
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Difference in the Location’s Decision for a Manufacturing Firm and a Service Organization
There are differences in the decision made with regard to the facility’s location as compared to a service provider company. The differences may arise in terms of the solidity of production or even labor- exhaustive setups. For instance, the kind of expertise that a service company needs is very different from the ones of a manufacturing company concerning their skills and even the training they have to undergo. Furthermore, relocating a service company is cheaper as compared to a manufacturing company given that a service company can use readily existing buildings hence, takes a little time to set it up. Additionally, setting up manufacturing plants call for greater inputs than service facilities; for instance, relocating the memory chip manufacturer will demand set up concerning electricity, water, and even fuel similar to the one for a small city than a small-scale service company that works as a modest retail store. Finally, construction of a manufacturing a lot more specialized labor as compared to a typical service center.
Metrics Which Should Be Used When Selecting a New Production Facility Location
The memory chip manufacturer should identify one or two most important metrics to consider in regards to their reasons to relocate one of their already existing plants after which they can assess a suitable area considering those metrics. Therefore, the five metrics which should be considered include the cost in terms of the enduring operational undertakings. Consequently, the cost included are the ones for leasing or purchasing the land, communication, office paraphernalia, training, taxes, wages as well as IT set-up. The second aspect is capacity. This is in the sense of the personnel the company needs to escalate construction centers within a limited duration. Third is the culture of a location. Here, the ability of a location to draw aptitude, restrained by the presence of good infrastructure and macroeconomic factors for instance, political stability, inflation and government policies. In view of that, capability is also another metric that is to be regarded during relocation of a company facility. The presence of specific expertise together with adequately refined effort and functioning that a company overtly needs, dependable substructure, satisfactory power as well as energy provision can also be factors to consider on weighing the capability of an area in order to relocate and carry out a set-up of a manufacturing firm like the memory chip manufacturer syndicate. Lastly, communication between the new company site and the company’s headquarters without any obstacles whatsoever either language or cultural. This implies a bidirectional communication between the new construction location and the headquarters which is critical to ensuring the successful integration of the new site. Thus, language compatibility plays an important role in site selection. In addition to that, the capability of the employees to carry out mechanical tasks in the home-office mode of communication is indispensible to guarantee great throughput and a profligate dispatch.
Location in United States Based on the Metrics
Considering all the five metrics for selecting a new facility’s location, the memory chip manufacturer can relocate one of their existing plants to a city like New York where they are sure of the required expertise for production and cost-effective operations. In addition, it has the intended capacity and capable engineer, as well as a couple of engineering institutions to serve the company with the best personnel.
