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Deciding where to build a new factory is becoming ever harder. Greenfield or brownfield site? Close to major roads or away from congestion? How near a skilled workforce should it be? Stephen Pritchard explains why the location decisions of the next few years may be different from those of the recent past
The growth of the motorway network, and of road transport in general, has done more than simply affect the way companies move their raw materials and their finished products. It has changed where companies choose to locate. Road transport is above all extremely flexible. Trains and ships are not economical for smaller loads, being better suited to bulk transportation.They also rely heavily on fixed assets such as railheads, ports and wharves which are expensive and time-consuming to build, and need maintenance. Road transport gave firms far greater control over where they located. And, in the 1960s and 1970s, when industrial relations were poor, it gave businesses an alternative to the publicly-run rail and ports.
Within the space of 20 years, companies started to see access to the national road network as one of the most important factors in choosing the location for a manufacturing plant. Road transport, though, has its disadvantages and a growing band of critics.Where once new motorways were unveiled to public fanfare, now routes are opened in the dead of night to avoid protests. For industry in the next millennium, transport will still be one of the most influential factors for a successful business. But the decision on where to locate, and picking the associated transport facilities, will be more complex than ever.
Today, logistics are at the top of managers' agendas. Better, cheaper transport means it is no longer as vital to locate near raw materials, or close to markets.
A more global economy means firms export more and more of their products, so markets are as likely to be in the next continent as in the next town. Closer to home, greater affluence means employees are better able to travel to work, and rising car ownership means that plants no longer have to be in towns or near public transport to attract the right staff
"From our experience, logistics are very strong in the minds of...