SITE & SITUATION FACTORS IN
MANUFACTURING
OBJ: TO DEFINE SITE & SITUATION FACTORS &
DETERMINE WHY THEY ARE IMPORTANT IN
THE MANUFACTURING PROCESS
SITUATION FACTORS: INVOLVE TRANSPORTING MATERIALS TO &
FROM A FACTORY
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PROXIMITY TO INPUTS: COST OF TRANSPORTING INPUTS > TRANSPORTING FINISHED GOODS
BULK REDUCING INDUSTRY: WHERE INPUTS WEIGH MORE THAN THE FINAL PRODUCT
MINERALS: METALLIC
COMBO W/ OTHERS TO BECOME ALLOY
FERROUS= W/IRON
NICKEL, TIN, TITANIUM
NON-FERROUS W/O
ALUMINUM, ZINC, COPPER, PRECIOUS & RARE METALS
PROXIMITY TO MARKETS: IF COST OF TRANSPORTING FINISHED
PRODUCT IS > THAN INPUT,S LOCATE FACTORY CLOSE TO CUSTOMER
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BULK GAINING INDUSTRY: MAKES
SOMETHING THAT GAINS VOLUME OR
WEIGHT
SINGLE MARKET MANUFACTURERS:
SPECIALIZED W/ 1 OR 2 CUSTOMERS
PERISHABLE PRODUCTS: THOSE THAT ‘SPOIL’
‘GET OLD QUICKLY’ OR ‘LOSE VALUE
QUICKLY’
TRANSPORTATION: SHIP,
RAIL, TRUCK OR AIR?
*TRUCKS: QUICK & CHEAP; SHORT
DISTANCE
* TRAINS: NO STOPS, LONGER TO
LOAD & UNLOAD, FURTHER DISTANCE
*SHIPS: CAN CROSS OCEANS, CHEAP,
LOADING & UNLOADING MANUAL OR
MECHANICAL?, NON-PERISHABLE
*AIR: MOST EXPENSIVE, FASTEST,
WHEN IT ABSOLUTELY, POSITIVELY HAS
TO BE THERE OVERNIGHT
*MANY TIMES COMBO OF 2 OR MORE
SO LOCATE AT BREAK OF BULK:
LOCATION WHERE TRANSFER AMONG
EXPORT MODES POSSIBLE SUCH AS
SEAPORTS/AIRPORTS/RR HUB
SITE FACTORS: FEATURES OF A PLACE
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LABOR: MOST IMPORTANT &
GOAL IS MINIMIZE COSTS
ON AVERAGE 11% MFG COSTS
LABOR INTENSIVE INDUSTRY:
WAGES & OTHER
COMPESNSATION PAID TO
EMPLOYEES CONSTITUTE HIGH
% OF EXPENSES
CAPITAL: FUNDS TO ESTABLISH
NEW FACTORIES OR EXPAND
OLD ONES
ABILITY TO BORROW $$$ IS KEY
TO STARTING FACTORY
LAND: SUITABLE FOR
CONSTRUCTION & SITE &
SITUTATION FACTORS KEY IN
LOCATION
CHANGING SITUATION
FACTORS: COPPER & STEEL
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OPTIMAL LOCATIONS MAY
DIFFER FOR DIFFERENT STEPS IN
PRODUCTION
MINING & CONCENTRATION
MUST BE CLOSE TO EACH OTHER
BULK REDUCING SO
TRANSPORTATION COSTS HIGH
ON LIST OF PRIORITIES
LOCATION NEEDS TO CONSIDER
ENERGY SOURCE
MANUFACTURERS CLOSE TO
MARKETS ON EAST & WEST
COASTS
STEEL OVER TIME HAS SEEN
CHANGE
AS NEW SOURCES OF IRON ORE
DISCOVERED PRODUCTION
LOCATIONS CHANGED
STEEL PRODUCTION NOW
DOMINATED BY DEVELOPING
COUNTRIES