Development of a global facility location analysis tool

Abstract

With an economy and customer base that is global, companies are increasingly expanding outside their home country's borders. Many times this is done to take advantage of lower labor or material rates, to increase proximity to the customer, to decrease logistics and transportation costs, to avoid tariffs and other taxes as well as many other factors. How does a company take advantage of the benefits of global operations while still taking into account the corporate strategy and risks associated with a location? By looking beyond standard matrix analysis tools that provide a one number comparison of potential locations, this thesis will expand the existing tools to incorporate the views of Enterprise Architecting to provide a more complete picture of how the decision to expand to one location versus another supports the desired architecture of the firm. This thesis combines analytical hierarchy process with a two level decision matrix to quantify the score of each location. A risk profile was developed to quantify the risk associated with specific locations and criteria in order to provide a more complete picture of the potential costs and benefits of building a facility in a certain location. This more complete view of location analysis will provide a tool that is both repeatable and reliable in its results and allows for an objective decision to be made on location in terms of the critical factors.