When creating an enterprise, regardless of its type of activity, the founders should think carefully about its rational location. To find the optimal location for a production base, there are many factors to consider and trade-offs to minimize the impact of those that could adversely affect the functioning of the company.
History of the issue
The issue of optimal location of enterprises has become especially relevant with the development of industry, but by and large it is vital for any type of entrepreneurial activity: both for agriculture and for consumer services enterprises. It should be solved taking into account many factors, both natural and climatic, as well as industrial and even social. Many economists have proposed their own models, which have been used in plant location theory since the late 18th century.
Some economists made the location of industrial enterprises dependent on the spatial distribution of surplus agricultural products, which were considered both as a source of raw materials and as food for workers employed in production. Others built spatial triangles, at the vertices of which were placed such factors as "sources of raw materials", "labor force" and "sales market". For such a model, the optimal place was where the transport costs were minimal.
What else to consider when locating businesses
Modern models of the location of enterprises take into account a much larger number of factors; their list depends on the industry in which the enterprise operates. So, when it comes to mechanical engineering, the main factors that should be taken into account will be:
- location of sources of raw materials and natural resources;
- transport network and existing infrastructure;
- the level of qualifications and the composition of the workforce;
- the level of development of enterprises in related industries and the possibility of specialization and cooperation;
- demand for finished products in the region.
For the optimal location of food processing enterprises, the economic model should take into account the following main factors:
- proximity and volume of the consumer market;
- remoteness of sources of raw materials;
- availability and qualifications of labor resources;
- proximity to fresh water sources.
But it is possible to rationally locate an enterprise in the pharmaceutical industry, taking into account such factors as:
- availability and remoteness of sources of raw materials;
- provision of cheap electricity;
- availability of qualified personnel;
- availability of significant water resources;
- ecology in the region.
Ultimately, the choice of location depends on the total influence of all factors, taking into account the specifics of production.
