Location, international logistics

The terms production site, factory and plant are in many cases used synonymously but in the context of chemical production networks they have a distinct meaning. A site/factory is the geographical location where production takes place. Within the site, one or more plants produce different kinds of products. Additionally, a chemical production site contains several infrastructure units. In contrast to other industries, site infrastructure does not only comprise services such as security, internal logistics, maintenance, canteens and site administration but also utility plants and waste treatment facilities (cf. Fig. 9). For the 50 sites operated by the industrial cooperation partner the share of total costs associated with site infrastructure was in line with industry averages of 15% to 20% as reported by Rasch (2006, p. 257). 

The internationalisation of manufacturing operations connected with the use of external manufacturing resources located in other countries often requires the redesign of the supply chain. Such solutions translate into complexity of the international logistics systems. 

For example, location decisions are a basic determinant of profitability in international logistics. The decision on where to manufacture, to assemble, to store, to transship and to consolidate can make the difference between profit and loss. Because of international differences in basic factor costs and because of exchange rate movements, location decisions are fundamental. Also these decisions tend to involve investment in fixed assets in the form of facilities and equipment. Decisions taken today can therefore have a continuing impact over time on the company s financial and competitive position. 

The challenges of international logistics and location barriers to international... 

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Nature of international flow of goods Physical distribution of finished products from new production locations Shipping parts to production locations and exporting finished products Physical distribution towards new market regions Shipping semifinished products to Europe, where they are finalised in response to customer orders, while within the logistics system... 

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