The document discusses factors to consider when deciding whether to expand a logistics/supply chain business domestically or internationally. It notes that having multiple distribution centers domestically can speed up delivery but increase costs, while international expansion opens new markets but requires investment. Key factors to evaluate include market conditions, transportation and connectivity costs, legal/regulatory issues, demand for products, operating costs, and quantitative metrics like % of demand met. Both quantitative and non-quantitative factors must be considered, such as government support, infrastructure, labor costs, and political stability. The conclusion recommends opening a warehouse in France or Spain to tap international growth and setting up a combined manufacturing/warehouse in the west coast of the US to reduce costs and meet growing

1. Introduction to Logistics/Supply Chain Management IP#4
Michelle Satten
Professor Synetra Hughes
February 3, 2014
Section I: Introduction
World of commerce is changing around the world, having a
multiple distribution center in case of domestic sales is an
added advantage to your business with some problems also. In
case of logistics business weight of product can vary from light
weighted products to heavy weight products. So setting up
multiple centers across US gives some advantage to the
company if they needs to transport heavy orders but in case of
light weighted orders they can be transported from anywhere
across US. Having multiple centers can speed up the delivery of
products of the company but the company also needs to pay
money for the management of the center, which may increase
companies input cost. In order to manage multiple centers
company must have right technology so that we can manage our
business from single setup. In case of International business if
we have some international center then we have opportunity to
do business with local companies therein and increase our
business but again input cost will be required for setting up the
center and management. This idea will work only when we have
higher SKU in an International market for our products. If we
have large international mass for our orders then it can add
something to our Brand value in that country that may help our
company if we are thinking about expanding or setting up a new
business base in that country, then there will be no problem in
surviving and no investment is required in building our brand
value in that country or in any other International market, but
there is a risk in handling large no of international orders from
one location in case of theft, misplaced orders because they

2. have to work according to the Rules and Regulations of that
country which may differ from country to country.
Section II: Decision-Making Criteria
In case of expanding to domestic market as well as in
International markets first we need to analyze that market where
we are going to expand, because in every case investment is
required which may be constraint for our company and can
reduces our profits also, so before taking any decisions we need
to think about the following factors which must be considered
before investing or taking any decision on expansion.
and economic condition of the International location where we
are going to expand, and similarly in case of setting up of Multi
distribution centers we need to think about the volume of order
we are getting from the selected location.
required transportation connectivity of the considered location
and their inclusive cost before selecting a site whether
domestically or internationally.
by the rules and regulation of the international location so
before investing we should know about the legal and political
conditions in the considered international locations whether the
conditions are acceptable to our company or not.
international market is also an important factor in selecting a
location.
Our company should take this expansion as an opportunity of
doing more and more business hence highly motivated and
skilled persons are required for our own benefit that can make
this investment profitable.
heck the

3. intellectual property rights in that country before introducing
ourselves because that may create a legal issue for our
company. (Global Expansion)
plan like what will be the working capital, financing options,
payment collection options in respective country , consulting
fees, market development cost etc.
Internationally. SO we must have proper idea about the
Customs, State duty, tariffs applicable in the respective location
because that can affect the profits of our company. (Entering a
foreign market , 2010)
requirements like Healthy environmental conditions, water, and
most important Electricity availability in those locations.
before setting up a new international warehouse for effective
management of our logistics business, their delivery, payment
etc.
proper market research with the help of some
Marketing companies about the demands of their products and
the level of competitiveness before entering in to an
international location for setting up its warehouse.
demand of their
products so we should take care of the availability of the
products in that market and their prices also because according
to that we may decide about whether it would be profitable for
the company to offer products at those competitive prices.
Section III: Metrics to Assess Success
Lot methodologies are available to change the progress of our
success. Here I am choosing the most important metrics which
can track our success effectively.
Operating Cost:
Measuring operating cost of a particular warehouse whether
domestic and International tells us that where we need to make
changes to reduces operating cost because lower the operating

4. higher will the profit which results in effective business and
management.
% of Demand met:
Measuring and assessing demands of our products and
percentage of demands that were met during a period tells us
about the functionality of the company and also indicates
operationality of our company. Higher % of demands met means
higher satisfaction to customer which may build brand value of
the company.
Investors Growth
The returns on shareholder investments and the market value of
the firm are impacted by the performance of firm
Logistics so this one also plays an important role for financial
stability of the company.
Production
Production metrics tells us the state of our infrastructure. This
will also include defective items produced during one period
and per unit cost of our products can be calculated which
reflects whether there is need to improve our infrastructure or
not.
Customer Complaints
To attract and retain valuable customers, the price/value of
products offered can be enhanced through cost reductions and
service improvements in logistics activities. Along with that we
need to take care of consumer complaint and their fast redressal
because that will increase customer satisfaction in our products.
So that must be analyzed regularly which also indicates
performance of our management system and changes can be
made accordingly.
Some other important metrics can also be used to check the
performance of our company which includes the famous 5 PI’s
or performance indicators.
- On-time receiving. - On-time shipping and delivery. - Order
accuracy. - Inventory accuracy. - Returns cycle time.
Section IV: Quantitative Factors
In case of International Set up we should prefer as per the data

5. we have. Location must be located either in France or Spain
because the projected growth rate in these two areas in more
than 15%.
In case of domestic Setup we have three options available that
is
Among all these options It is better to built a combined
warehouse and Manufacturing unit at West coast because it will
reduce our per unit operating cost.
Section V: Nonquantitative Factors
Quantitative factors are important only from financial point of
view of the company but we need to think about the Non –
quantitative factors also which plays important role in business
development. Here I am mentioning some of the important
factors which we must consider before taking any decision
Level of Collaboration with Government, Educational and
Utility Officials
Setting up of business in Domestic or International markets
required support of government which can be in any form like
reduced property tax, proper availability of electricity, basic
amenities in the respective area etc.
Sports, Recreational and Cultural Amenities
Sports, cinema halls, entertainment facilities, hotels must be
available in that area so that employees working in units can
engage themselves in other activities also which are very crucial
for their mental and health conditions.
Confidence in Ability of All Parties to Meet Company’s
Deadlines
Suppliers of raw material, delivery unit of the company,
production unit all the team members of the company must have
confidence to provide the required inputs for the company from
their side for proper functioning of the unit.
Political Stability of Location Site selected must be politically

6. stable, because new political party introduces new plans and
schemes which may be unsuitable for working of the company
or warehouse unit. Several examples are available around the
world in this case.
Climate Climate must be normal, otherwise it may affects
working of the unit. For example the site neither is located in
region of heavy rainfall nor in heavy snowfall because both
conditions may affect productivity of the company.
Availability of Healthcare services
Proper healthcare facilities must be available in the area so that
in case of any accidents employees can approach the hospital
easily which is very common in case of a logistic unit?
Skilled and Cheap Labor
Site must be located in those areas only where we can get cheap
and skilled labor easily which may reduce our operating cost of
the unit.
Predictability of Long-term Operational Costs Site should be
chosen in those locations only where economic condition are
stable so that it would became easy for use to predict the long
term operational cost of the unit.
Ability to Complete Real Estate due Diligence Process Quickly
Land required for the purpose must be done quickly without any
legal issue remaining. We should have legal consultant for this
particular issue because land is the most important and crucial
factor in setting up a new manufacturing plant or warehouse.
Section VI: Conclusion
Opening an International warehouse is a wise decision because
the growth in international market is quite larger than the
domestic market and especially either France or Spain should
preferred rather than European nation countries for setting up a
new warehouse which may also add new consumer base and new
presence of our company. Due to increasing demands of our
products in west coast region of USA that is about 5% annually
we must set up a combined manufacturing unit and warehouse

7. because that will reduce our operating cost, delivery time and
consumer grievances redressed due to local advantage that will
add to the satisfaction of our customers and shareholders in our
company.
References
Michael Watson, Sara Lewis, Peter Cacioppi, Jay Jayaraman
(2012). Supply Chain Network Design: Applying Optimization
and Analytics to the Global Supply Chain. FT Press
Bulger, S. (2013, April 24). Reasons to consider Multichannel
Centers. Retrieved from Multi Channel Merchant:
http://multichannelmerchant.com/opsandfulfillment_warehouse/
5-reasons-to-consider-multiple-distribution-centers-24042012/
Entering a foreign market . (2010, June 13). Retrieved from
Entrepreneurs
First:xhttp://www.bdc.ca/en/advice_centre/articles/Pages/export
ing_entering.aspx#.UYAFMvIXgWA
Global Expansion. (n.d.). Retrieved from My own Business :
http://www.myownbusiness.org/global_expansion/#7
Larry Gigerich - Managing Director, G. (n.d.). Qualitative &
Quantitative Factors Evaluated During The Site Selection
Process . Retrieved from Inside Indian Business:
http://www.insideindianabusiness.com/contributors.asp?id=1204