STUDENTS' CORNER - 154
A location where business and competition come alive; shoppers can lose themselves in choices.
Location is another significant driver of supply chain. Efficient management of supply chain is a very stupendous task which demands equal attention to things small and serious in terms of commercial viability; from production to distribution of the products to the customers, all activities require relentless attention and management. The one factor that underlies all tasks in supply chain management is of course cost and equally essential fact is customer satisfaction.
Location is very crucial in the supply chain as effective locations go a long way in cost effective measures. It is common sense that there must be minimum distance between two units of yours so that you save in transport, man hours facilitating quicker delivery of goods, so on.
There are some factors that must be considered carefully when selecting locations. Remember, the ever present focus is business promotion. Of course, you need people to work for you and the place where availability of the people is not a problem must be your choice because where there is enough supply of people is possible, there the labour cost would not be a problem in the sense you need not pay more than you budget generally. Other related factors like the workforce’s ethical stand and sensibility, proneness to unionization and issues related to govt officials, so on.
Next, the management must consider the possibility of exploiting IT facilities. Availability of transport cannot be ignored. Unless an effective transport system is there , business suffers many hurdles. Goods produced must be transported cost effectively in time to all distribution centres which in turn must not lose time in sending them on to the customers..
And selection of location with easy accessibility to local markets is also an inevitable factor. Nearer the market, greater the advantages. It has many benefits like quick cheaper transportation, possibilities of increasing the customers through frequent meeting s with them in the market place or elsewhere at mutual convenience.
Remember, where there is accessibility to markets, there must be ample scope for competition and you must have a workforce that can effectively challenge any competitive environment. Business and competition always go together. And markets are competitions live.
Anything that promotes business must be a welcome initiative to the enterprise. Every little detail connected with the business must be given due attention. Even the climate of a place also matters. Good healthy climate in general remains a conducive factor not only for personal living but also for commercial convenience. Is not true that a generally healthy employee proves more productive?
In our next session, we shall deal with the rest of the drivers of supply chain: transportation and information.