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Inbound-Outbound Logistics Cost Determines Location Decisions

The majority of respondents to Area Development's 24th Annual Corporate Survey said inbound-outbound shipping costs were important to selecting a site. Consider these factors before your next move.

Tim Feemster, Managing Principal, Foremost Quality Logistics and Joseph Tillman, Senior Researcher and Consultant, Supply Chain Visions (June/July 10)

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"Logistics Cost, Labor, and Love"
Your distribution network must be flexible enough to improvise, adapt, and overcome changes in this brave new world of constant flux. Understanding that site selection decisions are based on cost service trade-offs and how those trade-offs affect your overall network flow and total cost, will help you make smarter decisions.

There is no holy grail in site selection. However, careful consideration of the total network cost, energy availability, incentives, and infrastructure needs, along with overall network design, will enhance your search for the right site for your next distribution facility.

"Location, location, location" used to determine the quality of a commercial real estate site. Today the three L's - "logistics cost, labor, and love" - are key factors. Logistics cost and labor are major elements in the total cost of your network. The love comes from local and state communities that must embrace your company's investment in the community. Without a genuine desire for your investment, the local market may make operating your facility difficult, or more expensive if there are no incentives.

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About the Author

Tim Feemster, Managing Principal, Foremost Quality Logistics
Over 35 years of experience have provided Tim Feemster, Managing Partner, Foremost Quality Logistics, with a variety of problem solving situations in real estate, transportation, logistics, and distribution. Tim is quoted frequently in the industry press and makes over 20 presentations a year to professional organizations. Before starting FQL Logistics, Feemster was a senior manager in three manufacturing companies, a consultant, an executive in two 3PL logistics providers, and a Practice Group leader two real estate companies. Feemster has been responsible for transportation & warehouse operations, real estate site selection, economic development strategy consulting, strategic planning, and lean quality management. Feemster holds an M.B.A. in Marketing from the Ross School of Business, University of Michigan in Ann Arbor and a B.A. in Mathematics from DePauw University in Greencastle, Indiana. Feemster is an active member in the Warehouse Education and Research Council (WERC.org), where he is Past President; Council Supply Chain Management Professionals (CSCMP.org); Industrial Asset Management Council (IAMC); Intermodal Association of North America (IANA.org), International Association of Refrigerated Warehouses (IARW), and the International Council of Shopping Centers (ICSC.org). He is also a member of the Board of Directors for the Trade Data Exchange (TDE) Corporation.

More articles by Tim Feemster

Joseph Tillman, Senior Researcher and Consultant, Supply Chain Visions
Joseph Tillman has worked for a number of years in the transportation and warehousing industries. He has an M.B.A. from Georgia Southern University and a B.S. in geography from the University of Georgia. Joseph is a consultant and senior researcher at Supply Chain Visions.

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What factors must a small company consider regarding logistics and relocation that a large company does not? And vice versa?

For the most part, large and small companies will consider similar site selection factors... More
- Tim Feemster, Managing Principal, Foremost Quality Logistics

How is logistics changing to be more flexible for changing inventory levels and client distribution and transportation needs?

Some companies are using Vested Outsourcing as a way introduce lean principals across company boundaries and to target overall waste in the supply chain. More
- Tim Feemster, Managing Principal, Foremost Quality Logistics

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