How changing supply chains impacts location choices

Abstract

Supply chain strategies determine the number, size, activities and location profile of distribution centres as 80 per cent of the value chain's life-cycle costs are locked in at the start with the footprint of distribution centres (and production plants). The direct relationship between supply chain strategy and location choices also means that location choices have a direct impact on the three drivers of shareholder value: growing revenues (due to geographic expansion), costs and capital deployment. The author presents a proven location decision tool (the cost-quality-risk model), in which all relevant cost factors, quality of the business environment factors and risk factors are included.