Contents

• This document reviews the paper “The relocation of a hybrid manufacturing/distribution facility from supply chain perspectives: a case study”
• Min, Hokey and Melachrinoudis, Emanuel 1999, Omega International Journal of Management Science, vol. 27.

Description

Relocation is considered as one of the most strategic business decisions by organizations, which decide to stay competitive in supply chain management. Whether it is manufacturing, warehouse or distribution facility, location decisions can help companies in various ways,
 Access emerging markets
 Take part in skill-based competition
 Achieve operating cost advantages
 Enhance strategic corporate relationships with partners
In order to develop an effective location selection strategy, it is important to have an in-depth understanding of the company’s requirements. Min and Melachrinoudis deliver an analytical assessment on the issue of relocation of manufacturing facilities of supply chains in their paper. They address the manufacturing location problems at the beginning of the paper,
“The problem of locating manufacturing (or warehousing) facilities is concerned with the determination of the optimal number, size, and geographic configuration of those facilities in such a way as to minimize the total cost associated with supply chain operations, while satisfying customer demand requirements.”
In other words, a relocation strategy is developed with the consideration of number, size and location facilities. Its primary objective is to minimize the total operational costs as well as to efficiently meet the consumer needs. Besides, relocation decision requires a complete assessment of the current and imminent situations, market changes, and the advantages and disadvantages of the corporate decision to relocate. In this context, decision-aid tools such as analytic hierarchy process (AHP) can be really effective in order to understand and solve relocation problems. Min and Melachrinoudis summarize their paper with the following points being addressed,
 A detailed overview of the relocation scenario in supply chain management including problems, situations and changes in the market
 Discussion of location factors affecting relocation decisions of companies. The paper subdivides the location factors under six broad categories
 Explanation of relocation decision by developing analytic hierarchy process or AHP model design, and its applications along with a case study