Question

1. When Managing Quality—why is selecting a facility location becoming much more complex? Please elaborate on the following:

   1. Shipping (transport)

   2. capital ($ funding)

   3. labor (workforce)

Answer 1

Solution:

Quality is directly dependent on a variety of factors and we must focus on these factors to ensure an acceptable level of quality. In logistics, quality is greatly dependent on the facility location. There are numerous reasons why the quality is associated with factors such as facility location, supply chain efficiency, and capital involved.

The facility location is important to factor for quality because the facility location will determine the shipping efficiency of the supply chain, the capital requirements for setting up the facility, and the labor required to manage the facility. The facility location should be optimized as per the target consumers of the business because we do not want to locate our facility far from our target consumers because that will result in higher shipping costs and shipping times hence affecting the quality of the supply chain process. If the shipping times are higher the perceived quality of the business by the consumers is lower.

We must choose the facility location that will be beneficial for the business as per the capital required. We would want to set up our facility at locations where the cost associated with setting up the facility is lower and also the availability of the labor in that facility location is important. We would want to ensure that we are locating our facility which is CapEx friendly for the business and also that location should have the availability of labor with moderate wage requirements to help the business avoid high wage rates. Also, this facility should be at an optimised distance as per the target consumers the business will be serving. These all elements combined are very crucial for the business because they directly impact the quality of service we provide to the consumers and hence we must take care of these aspects before choosing the facility location for our business.

Hence, this is why it is important that we choose the facility location appropriately because of the direct impact of the facility located on the perceived quality of the business by the consumers.