Logistics facilities and supply chain operations

Logistics Facilities

The decision of a new logistics facility or distribution center involves putting various factors into consideration and considering numerous details. The best way to start this process is by examining the elements that combine in order to support the needs of the business. Manufacturing and raw materials have a major role to play when it comes to the selection of a logistics facility. One factor to be put into consideration is the nature and characteristics of the goods that have to be stored. An important factor when it comes to the nature of the goods is the volume of goods. The volume of goods that have to be stored is something that has to be thoroughly thought of. The logistics facility that is chosen has to be big enough or the right size which the goods will fit.

There is no need of going for a facility whereby once you start loading the goods for storage you are told that there is no more enough room for storage and yet you still have goods that have not been stored yet. Such a scenario would require that one goes for an alternative storage facility which is very dangerous. It is not good for goods to be stored at different places especially if the places are far apart. Still at the volume of goods it can be said that bulk raw materials are quite expensive to transport in relation to their value. The manufacturing process normally takes up a considerable amount of resources, such as raw material, energy and labor (Trunick, 2011). For this reason many companies prefer locating manufacturing and fabrication operations near such resources. Therefore it would be only logical to go for a logistics facility that is located where the raw materials are found. The sourcing or production side of any supply chain has to start from anywhere where there is low-cost, labor, materials and production. The options are narrow when there is an entry of inbound logistics and distribution function. The earlier a company puts logistics into consideration then the more likely it is going to design supply chain costs and performance to withstand both internal and external interruptions.

The other factor is access. The logistics facility that a company chooses should be easily accessible. This means that whenever goods are required the company should be able to get to the logistics facility without any huddles. This leads us to Local transportation infrastructure, availability of transportation, congestion. This means that the logistics facility chosen should be in an area where there is good infrastructure hence can be accessed easily. It should also not be in a congested area where it would take a long time before one gets there. When it comes to any business time is of the essence and therefore everything is done in order to make sure that time is not lost. Therefore, the choice of a logistics facility that is accessible helps on the issue of time wasting.