Choosing an Ideal Plant Location

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Manufacturing facility relocation due to its little size requires in-depth analysis and understanding of the aspect in which the management refer to be the right site. This report points at creating a recommendation to the city in which Silver Systems Inc. should move its plant to improve its outcome line with overcoming the strains resulting from the rapid urbanization and also the union pressures. The two cities include Mobile, Alabama, and Seattle, Washington. The protocol used include demographic stats, labor force, accessibility to transportation and possibility of market growth. It is adviced that Mobile, Alabama is the genuine site to relocate as there are possibilities of low cost production and the maximum net advantage.

1.0 Introduction

Deciding on the ideal location of an existing manufacturing facility requires is a critical strategic decision that is made after taking into consideration of the benefits and the cost of the different alternative sites. As Silver Systems, Inc. seeks to overcome the strains resulting from union pressures and rapid urbanization, it is significant to relocate the plant to a site which can yield the lowest unit of production as well as distribution, large market share, maximum social gain and least risk. Due to the expansion of the product line, the current plant capabilities have become inadequate which necessitate identification of an appropriate site that has a maximum net advantage. Therefore, this report shall analyze two cities that include Mobile and Seattle that have been proposed and provide detailed information to the CEO.

2.0 Selection Criteria

The criteria to use in the selection analysis include demographic stats, accessibility to transportation, labor force, and potential market growth.

2.1 Demographic stats

Firstly, when comparing the demographic stats, the factors to consider are the total number of population, per capita income, age composition, occupational structure, and education level. The total population in 2016 and 2017 for Mobile is 195111 with a per capita income of $ 23509 including all the adults and children and an unemployment rate of 7.60% (Suburban Stats, 2017).

Table 1

Statistic

Mobile

Alabama

National

Population

195111

4,817,678

314,107,084

Population density(sq.mil)

1401

93

91

Median age

36

38.3

37.2

Male/ female ratio

0.9:1

0.95:1

1:1

Married (15yrs and older)

48%

57%

55%

Source: www.areavibes.com

The total population of Seattle is 608660 in 2016 and 2017 with per capita income of $ 44167 and unemployment rate of 4.00% (Suburban Stats, 2017)

Table 2

Statistic

Seattle

Washington

National

Population

608,660

6,897,183

314,108,084

Population density(sq.mil)

7,608

107

93

Median age

36.2

37.4

37.4

Male/ female ratio

1.0:1

1.0:1

1.0:1

Married (15yrs and older)

46%

54%

56%

Source: www.areavibes.com

2.2 Accessibility to transportation

The Mobile Regional Airport connects directly to the four major hub airports. Mobile also has both Class I and Class II railroads that allow the intermodal freight services to the companies that engage in importation and exportation. Moreover, it has the two primary interstate highways, and the spur converges, and its public transportation includes the Wave transit system. Its Port has public terminals that handle the containerized, breakbulk and heavy-lift cargoes. On the other hand, Seattle's transportation is majorly automobile with two public transportation agencies that include King County Metro and Sound Transit. They also use water and air transport which is more developed compared to that of Mobile.

2.3 Labor force

The Mobile labor force is growing at a faster rate with an average of 0.9%, and the participation rate is estimated at 56.50% that results from the positive economic conditions which continue to improve from yearly. The unemployment rate averages 7.3% in 2017 which has been declining since 2010 (Career Trends 2017). It means that the total number of people of who are employed include 86203. The decrease in the labor force participation rate is an indication that a small population of the city's total population is not seeking a job or working. Seattle's labor force population has also grown by an average of 2.8% with an unemployment rate of 3.20% (Career Trends 2017). Its labor force participation rate has also decreased compared to the number of residents being registered as residents in Washington.

2.4 Potential for market growth

The most known manufacturers of valves in Seattle include Bay Valve Service and Baxter Rutherford Inc. which are on the move to diversify their products. When it comes to Mobile, there has been a rising demand for valves, and also the increase in the gas and oil prices gives an opportunity for potential growth in the city. The companies offer a wide variety of valves that include safety and relief, electric actuators, steam traps, manual and control valves and many others. There is stiff competition and some of the factors to consider include access to the efficient manufacturing technology and ability to adhere to the particular market requirements (Sarasota 2017).

3.0 Conclusion

Seattle is more densely populated than Mobile by over 485%, and the median age is seen to be 0.2 years older than that of Mobile. From statistics, people in Mobile have a 0% likelihood of being married. Mobile's average for the commute residents is higher than that of Seattle by 57.8%, and the residents that work from home are 13% fewer. Both cities have a potential for market growth of the valves products as the existing companies are still performing pretty well. New companies entering the valves manufacturing industry should be equipped with appropriate marketing strategies to attract new customers.

4.0 Recommendation

The CEO of Silver Systems Inc. should consider relocating their manufacturing facility to the Mobile, Alabama as it shall help it have fewer strains associated with rapid urbanization and the union pressures.

5. References

Career Trends, (2017). Mobile, Alabama. http://unemployment-rates.careertrends.com/l/4509/Mobile-AL

Career Trends, (2017). Seattle Washington. http://unemployment-rates.careertrends.com/l/3129/Seattle-WA

Sarasota, F.L. (2017). Global Industrial Valves Market Size & Trends will reach $88.4 Billion by 2021: Zion Market Research. https://globenewswire.com/news-release/2017/04/11/958702/0/en/Global-Industrial-Valves-Market-Size-Trends-will-reach-88-4-Billion-by-2021-Zion-Market-Research.html

Suburban Stats. (2017). Current Mobile, Alabama Population, Demographics and stats in 2016. 2017. https://suburbanstats.org/population/alabama/how-many-people-live-in-mobile

Suburban Stats. (2017). Current Seattle, Washington Population, Demographics and stats. 2016, 2017. https://suburbanstats.org/population/washington/how-many-people-live-in-seattle

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