If the organization can configure the right location for the manufacturing facility, it will have sufficient access to the customers, workers, transportation, etc. For commercial success, and competitive advantage following are the critical factors:
Facility locations are selected closer to the customer as to reduce transportation cost and decrease time in reaching the customer.
Presence of other similar manufacturing units around makes business area conducive for facility establishment.
Availability of Skill Labour
Education, experience and skill of available labour are another important, which determines facility location.
Free Trade Zone/Agreement
Free-trade zones promote the establishment of manufacturing facility by providing incentives in custom duties and levies. On another hand free trade agreement is among countries providing an incentive to establish business, in particular, country.
Continuous and quality supply of the raw materials is another critical factor in determining the location of manufacturing facility.
In current globalized world pollution, control is very important, therefore understanding of environmental policy for the facility location is another critical factor.