Logistics Facility Localization: A literature review and framework

Henrik Sternberg, Stela Petkova, Daniel Hellström

Research output: Chapter in Book/Report/Conference proceedingPaper in conference proceedingpeer-review

Abstract

Purpose
The location of a logistics facility is strategic decision, impacting distribution cost, efficiency and environmental impact. The purpose of this paper is to systemize existing knowledge by a literature review. Based on the literature review we propose a framework in this area of theoretical and practical relevance.
Design/methodology/approach
We have examined the peer-reviewed literature on logistics and distribution facility location decisions. Our search strategy was based on selected keywords relating to terms for facilities and/or locations in logistics and distribution. Due to the lack of holistic approaches to localization, we included practioners’ publications. Altogether we have identified 67 relevant articles, theses and reports from 1974 to 2015.
Findings
The content analysis shows that a major share of papers focus on mathematical modelling taking a limited number of factors into consideration. Seven categories (cost factors, freight flow, geographical/environmental factors, company specification factors, business development, business climate and others) gather all the different factors that determine the holistic approach of the localization process regarding distribution facility.
Research limitations/implications
Logistics localization plays a large role in Supply Chain Management and the authors identify an important open space for research in the theory. So far demographic data has been considered as one of the most important factors, since Center of gravity is widely used in the planning process. On the other hand, freight flow has been underestimated although it is a crucial logistics activity. Therefore, the authors assume that a change in that trend is going to effect on the current best logistics sports.
Practical implications
Given the lack of validation in existing practitioners’ guides for logistics facility localization decisions, this paper represents a useful guide for practitioners looking for strategic directions.
Originality/value
This paper is to the authors’ knowledge the first review of logistics facility localization literature.
Original languageEnglish
Title of host publicationProceedings of Nofoma 2016
PublisherUniversity of Turku
Pages581-597
Publication statusPublished - 2016
EventNOFOMA 2016 - University of Turku, Turku, Finland
Duration: 2016 Jun 92016 Jun 10

Conference

ConferenceNOFOMA 2016
Country/TerritoryFinland
CityTurku
Period2016/06/092016/06/10

Subject classification (UKÄ)

  • Transport Systems and Logistics

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