Creating a Location-Analysis Matrix

Posted by mddiadmin on November 1, 2002

Originally Published MX November/December 2002


Companies seeking to explore the advantages and disadvantages of siting facilities in various locations typically use a matrix structure that lists possible locations down the side and issues for consideration across the top. Setting up a matrix to analyze location alternatives requires some initial decisions about its format and methodology.

The first task is to determine what kind of rating system is required. For the purposes of some companies, a simple three-tiered system (1-2-3, or poor-okay-good) is sufficient, but some cases require a more complex system. A good alternative is a four-point system (1-2-3-4, or bad-weak-good-outstanding), which forces companies to make the tough calls that distinguish between the weak and the good.

The next decision relates to grouping the issues to be considered. A logical grouping that can later incorporate many subissues would be as follows.

  • Process issues (issues for R&D will differ from those for manufacturing).
  • Logistics and transportation.
  • Human resources.
  • Financial issues.
  • Marketing.

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