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Macro Industrial Site Selection Analysis

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Many countries are undergoing transformations that make the choice to locate in those areas intricate. Political risks in both the country of location and the host country influence the capability of establishing the business site. Learn local and federal government policy: ecological, public/communal/federal, labor laws, zoning, construction permits, and land employment rules. Mexico has been welcoming to U.S. foreign investment for many decades now.

Pro-business government legislation and local government involvement to smooth the progress of businesses locating in an area through subsidies, tax abatements, and other support are ideal for prospective destinations, which is why Mexico is a good choice. The first tactical goal of the Mexican government’s energy segment is assuring an ample supply of energy with international standards of class and competitive prices. The Mexican government believes that coastal natural gas terminals are a key to the country’s efforts to guarantee future supply without pressuring the North American market. It is also to have a capable partner to help you negotiate the intricacies of doing business in Mexico. The Offshore Group is capable and has a track record of being worthy of its clients’ trust.

Mexico is also a signatory to the NAFTA. This gives companies the distinct advantage of importing North American sourced inputs into Mexico duty free, when the final products are for export out of the country.

Non-legislative and cultural barriers should also be considered. Again, this is where a trusted local partner such as a Mexican shelter company adds value.

Macro Industrial Site Selection Analysis

After going through the considerations and narrowing the potential sites to just a few options, it is time to analyze the locations and choose the best one for the company. It is important to find a balance between annual operating expenses, Mexico manufacturing start-up costs and expenses related to image, customer care, and amenities.
Methods for Macro Analysis (evaluation of alternative regions, sub-regions, and communities.)

Factor Rating Systems: this industrial site selection method is one used the most commonly used. This is so because site selection variables are examined in an easy to follow format. Major factors affecting a set of possible sites are listed, then each site is rated against each factor and a point value is selected from its assigned range, then sums of the assigned point were then compared. The site with the most points is selected.

Transportation method: this represents linear encoding technique that addresses problems that involve the transport of products from various sources to a number of destinations. Two common objectives are to minimize the cost of shipping and/or maximize the revenue of shipping. The method involves using Excel or a similar application and can be used to solve many different types of problems if applied resourcefully.

Centroid method: this a technique for locating solitary facilities that considers the existing amenities, the space between them, and the quantity of goods to be shipped. It is often used to locate transitional or dispersal warehouses. Simply put, this method assumes that inbound and outbound transport costs are equivalent, and it does not include unusual Mexican shipping costs for less than full loads. It involves placing existing locations on a coordinate grid system then using longitude and latitude dexterity for global decisions.

The centroid is found by calculating the X and Y coordinates that result in the minimal transportations costs using the formulas:
Industrial Site Selection Macro Analysis Formulas

where Cx = X coordinate of the centroid

Cy = Y coordinate of the centroid

dix = X coordinate of the ith location

di y = Y coordinate of the ith location

Vi = Volume of goods moved to or from the ith location
The methodology is ultimately used to complete a Mexico site selection project is the one which expands a manufacturing companies bottom lines and ensures its future success.


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  • Posted On June 15, 2012
  • Published articles 10

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