Chapter 11Copyright © 2010 by Nelson Education Ltd. Selecting the Location and Planning the Facilities 11 PowerPoint Presentation by Ian Anderson, Algonquin

Chapter 11 Copyright © 2010 by Nelson Education Ltd.

Selecting the Selecting the Location and Location and Planning the Planning the FacilitiesFacilities

Selecting the Selecting the Location and Location and Planning the Planning the FacilitiesFacilities

1111

PowerPoint Presentation by PowerPoint Presentation by

Ian Anderson, Algonquin CollegeIan Anderson, Algonquin College

Chapter 11 Copyright © 2010 by Nelson Education Ltd. 11-2

Looking AheadLooking AheadLooking AheadLooking Ahead

After studying this chapter, you should be able to:

1. Describe the factors affecting the choice of a bricks-and-mortar business location.

2. Discuss the challenges of designing and equipping a physical facility.

3. Describe the attraction and challenges of a home-based business.

4. Understand the potential benefits of locating a start-up on the Internet.


Key Factors in the Location DecisionKey Factors in the Location DecisionKey Factors in the Location DecisionKey Factors in the Location Decision

• Customer accessibility–As a matter of access by target customers–As a matter of customer convenience–As a necessity to avoid shipping costs

• Environmental business conditions–Climate-related factors –Business environment factors

• Competitors, legal requirements, and tax structure

continued…



• Resource Availability–Nearness to raw materials–Availability of a suitable labour supply–Access to adequate and reliable transportation

• Personal Preference of the Entrepreneur–Familiarity with home community–Familiarity of community with entrepreneur

…continued



• Site Availability and Costs –Difficulty of locating a good site

• Business incubator provides shared space, services, and management assistance for new businesses

–Large costs for and commitment required to purchase site outright.

–Leasing avoids a large cash outlay and allows the owners to postpone committing to the site before the business becomes a success.


Five Key Factors in DeterminingFive Key Factors in Determininga Good Business Locationa Good Business Location

Five Key Factors in DeterminingFive Key Factors in Determininga Good Business Locationa Good Business Location

Exhibit 11-1

11-6


Designing the Physical FacilitiesDesigning the Physical FacilitiesDesigning the Physical FacilitiesDesigning the Physical Facilities

• Functional Requirements–Physical facilities should be of adequate size and

accommodation–Ideal building is one that matches the functional

requirements of the business

• Considerations include:• Age and condition of building• Fire hazards• Heating and air conditioning• Lighting and restroom facilities• Entrances and exits


Typical Process LayoutTypical Process LayoutTypical Process LayoutTypical Process Layout

Exhibit 11-4


Factory LayoutFactory LayoutFactory LayoutFactory Layout

• Factory Layout–Process layout

• A factory design that groups similar machines together– A machine shop with drill presses separate from lathes

–Product layout• A factory design that arranges machines according to their roles

in the production process– Product is moved progressively from one work station to the next


Grocery Store LayoutGrocery Store LayoutGrocery Store LayoutGrocery Store Layout

Exhibit 11-5


Retail Store LayoutRetail Store LayoutRetail Store LayoutRetail Store Layout

• Retail Store Layout–Grid pattern

• A block-like layout that provides for good merchandise exposure and simplifies security and cleaning

–Free-flow pattern• A flexible layout that is visually appealing and gives the

customers the freedom of movement

–Self-service layout• A design that gives customers direct access to merchandise


Retail Store LayoutRetail Store LayoutRetail Store LayoutRetail Store Layout

Exhibit 11-6


Challenging in Equipping Challenging in Equipping the Physical Facilitiesthe Physical Facilities

Challenging in Equipping Challenging in Equipping the Physical Facilitiesthe Physical Facilities

• Manufacturing Equipment–General-purpose equipment

• Machines that serve many functions in the productionsystem

–Special-purpose equipment• Machines designed to serve

specialized functions in the production process

…continued


Equipping the Physical FacilitiesEquipping the Physical FacilitiesEquipping the Physical FacilitiesEquipping the Physical Facilities

Special-PurposeEquipment

• Low labour cost

• High hourly output

General-Purpose Equipment

• Low purchase cost

• Flexible production

• Good resale value

HANDLE

WITH

CARE


Office EquipmentOffice EquipmentOffice EquipmentOffice Equipment

• Challenging to keep pace with technology–Computers

• Networks, e-mail

–Fax machines–Copiers and printers–Telephone systems

• Voice mail

• Interactive voice response (IVR)


Home-Based BusinessesHome-Based BusinessesHome-Based BusinessesHome-Based Businesses

• Advantages–Low start-up and overhead costs–Convenience for family and lifestyle

• Technology–Advances in office equipment

allow home-based business to compete with commercial sites


Challenges of Home-Based Businesses Challenges of Home-Based Businesses Challenges of Home-Based Businesses Challenges of Home-Based Businesses

• Challenges–Family and business conflicts

• The need to observe regular business hours and establish spatial boundaries (specific work areas) to avoid distractions.

–Business image of a home-based business• Professional image is difficult to maintain in a home

environment.

–Legal considerations• Local laws and zoning ordinances prohibit many types of home-

based businesses.


Locating on the Web:Locating on the Web:E-TermsE-Terms

Locating on the Web:Locating on the Web:E-TermsE-Terms

• E-commerce– The paperless exchange of business information via the

Internet

• eCRM (Electronic Customer Relationship Marketing)– An electronically based system that emphasizes customer

relationships

– Utilizes a customer-centric database

• E-tailing– Round the clock electronic access to products/services

11-18


Benefits of E-CommerceBenefits of E-CommerceBenefits of E-CommerceBenefits of E-Commerce

• Compete with bigger businesses on a level playing field

• Access to worldwide customers

• Compresses the sales cycle – great for cash flow

• Enhancing customer service and CRM through technology

11-19


Drawbacks of E-CommerceDrawbacks of E-CommerceDrawbacks of E-CommerceDrawbacks of E-Commerce

• Technical limitations– Cost of developing / maintaining website– Bandwidth and access issues– Changing software and hardware

• Nontechnical limitations– Privacy and security– Intangibility– Global language/culture barriers

11-20


E-Commerce Business ModelsE-Commerce Business ModelsE-Commerce Business ModelsE-Commerce Business Models

11-21

Exhibit 11-7


B2B and B2C Business ModelsB2B and B2C Business ModelsB2B and B2C Business ModelsB2B and B2C Business Models

11-22

• B2B – (business-to-business)– based on selling to business customers

electronically

• B2C (business-to-consumer)– based on having final consumers as customers – 24/7 e-tailing provides round the clock access

to products and services


Auction SitesAuction SitesAuction SitesAuction Sites

11-23

• Web-based businesses offering participants the ability to list the products for bidding

• Examples include e-Bay, bidz.com, and Yahoo auctions


Selling an Item on e-BaySelling an Item on e-BaySelling an Item on e-BaySelling an Item on e-Bay

11-24

Exhibit 11-8

Documents

Chapter 11Copyright © 2010 by Nelson Education Ltd. Selecting the Location and Planning the Facilities 11 PowerPoint Presentation by Ian Anderson, Algonquin