Using scorecards to routinely evaluate distribution facility locations

Abstract

Purpose

The purpose of this paper is to present insights into one company's rationale for closing unproductive distribution facilities.

Design/methodology/approach

The reader is given background of the decision‐making process behind transportation mode selection and distribution center selection, then on how these locations can gradually become obsolete. Uses a case study.

Findings

The paper gives examples of how one company identified their key performance indicators and applied them to the facility closure decision‐making process.

Practical implications

Companies can create a rational, efficient and evenhanded approach to the closure of underperforming facilities. Using those same tools, managers can readily identify whether the root cause of good or bad performance stems from the market, or management.

Originality/value

Facility closure decisions are often prompted by the firm's need to reduce losses. This paper proposes using the company's key performance indicators to drive an on‐going evaluation of each facility's performance. Using this approach, companies will be able to identify downward trends and their root causes, rather than making a series of trial and error attempts at fixing the problem.

Citation

Gibler, R.R. (2006), "Using scorecards to routinely evaluate distribution facility locations", Journal of Corporate Real Estate, Vol. 8 No. 1, pp. 19-26. https://doi.org/10.1108/14630010610664778