Factor rating method map
Warehouse 3 has a daily outbound goods volume of 5,000 unitsĪnd the current coordinates of the existing facilities:.Warehouse 2 has a daily outbound goods volume of 1,300 units.Warehouse 1 has a daily outbound goods volume of 2,500 units.Given the following assumptions below, what are the coordinates for the new potential location? Let’s suppose your company wants to expand its logistics network and locate a facility within a network of three existing facilities. What this method allows is a point of departure – or, literally, a starting point of where (from the perspective of longitude and latitude) you options are for where to grow your fulfillment or logistics network. As I mention earlier, there are other factors to consider. Once you have obtained the X and Y coordinates place that location on the map.īut, it doesn’t end there. Cy is the Y (vertical axis) coordinate for the new facility, dix is the X coordinate of the existing location, diy is the Y coordinate of the existing location, and Vi is the volume of goods moved to or from the ith location. We calculate the X and Y coordinates using these equations where Cx is the X (horizontal axis) coordinate for the new facility. Place existing warehouse, fulfillment center, and distribution center locations in a coordinate grid.
#Factor rating method map how to
How To Use Center of Gravity Method Step 1: This method is beneficial because it’s (1) Simple to compute, (2) Considers existing facilities, (3) and Minimizes costs. It’s an approach where the main inputs that it considers are the following: The Center of Gravity Method is an approach that seeks to compute geographic coordinates for a potential single new facility that will minimize costs. One common approach to identifying where to build the next single fulfillment center location is a method called the Center of Gravity Method. A popular technique for selecting a new facility location based on different weighted criteria is the prioritization matrix.īut, to answer the question of “where”, also requires a more quantitative approach that should be used in concert with the above considerations. The above are important criteria and should be considered. Building construction codes and zoning restrictions.Crime rate, Housing, Educational Facilities.Access to interstate highway systems or inbound sea import locations.Inbound and Outbound transportation costs.The pool of local talent available in the area.Proximity to the Logistics Carrier (such as UPS World Hub or Ground Transport).State and Municipalities incentives? State and Local Government Incentives?.What is your geographic distribution strategy?.What is your expected inventory profile?.There are, of course, many factors to consider: After you answer the “where” question, then we need to discuss what warehouse processes and warehouse metrics ought you establish. Where to build your next warehouse is an incredibly important question to answer.
#Factor rating method map drivers
The answer to “where” are drivers to costs and the customer experience. Where to build a distribution center, fulfillment center, or warehouse is a strategic question.
You warehouse location is optimal in the first place to meet service level commitments.What Warehouse Metrics do you have in place to help you determine if your processes are going well or not.Tight and Necessary Warehousing Processes.There are at least 3 critical items that allow you to reduce costs and increase service level in warehousing: Or another hot area to consider in build-to-order fulfillment is the explosion of 3D Printing Companies. One has to ask What, Where, and How when it comes to your warehousing strategy.