Reminder on the Business Issues in Network Design

The June 2013 issue of Inbound Logistics had an article on the importance of the “entrepreneurial spirit” in site selection.

The article is mostly about the large number of large companies in NW Arkansas (near Walmart) and of innovation at the port of Cleveland.

But, the start of the article reminds us that network design is usually about one or two primary factors and that different industries make different trade-offs:

[primary factors include:] labor cost and availability, proximity to market, transportation accessibility, utility rates, and business tax incentives. Different industries prioritize one criterion over another. Utility rates trump labor for more data-intensive purposes; heavy commodity sourcing may favor rail access over road.

But, the article also reminds us that issues like “entrepreneurial spirit” can be just as important. ┬áThis is a nice reminder that network design is a business decision. ┬áThere are many factors that can be quantified, but other issues, which may be just as important need to also be considered.