International Logistics: A Diagnostic Method for the Allocation of Production and Distribution Facilities

Since the 1970s, companies have become more global, resulting in complex production and distribution networks, and in flows of goods across oceans and borders. The management of these complex systems is a real challenge. Firms nowadays face the questions: “Where is the best place to manufacture our products?” and “What is the best way to distribute them to the markets in the different countries?” When a firm considers expanding its production capacity, managers are confronted with the questions: “Where should the new factory be located?” or “What is the best opportunity for a merger or takeover”? In order to answer these and related questions one needs a systematic method to evaluate existing and alternative production and distribution structures and their related material flows. In this article a diagnostic method is presented which can be used as a decision support system for such strategic questions.