Howard Weiss is Professor of Operations Management Emeritus at Temple University. He is also the developer of our POM and ExcelOM software, provided free to adopters.
The location chapter (Ch. 8 in your Heizer/Render/Munson text) offers the following on why companies choose a location. “Companies make location decisions relatively infrequently, usually because demand has outgrown the current plant’s capacity or because of changes in labor productivity, exchange rates, costs, or local attitudes. Companies may also relocate their manufacturing or service facilities because of shifts in demographics and customer demand.”
However, sometimes rather than a company actively looking for a location, it chooses a location because the location has looked for an organization. This is particularly true of repurposed malls and automobile plants. Store closings in malls have been on the rise for some time now mainly due to e-commerce. But COVID-19 has accelerated the closing of stores, and vacancy levels in malls will likely never return to the vacancy levels pre-covid. Mall developers say they’re scouting for businesses other than retailers to replace shuttered stores, anything from schools to doctors’ offices and short and long-term storage facilities both for residential and commercial customers.
Repurposing malls has been underway prior to COVID-19. In a 2018 report, Livability.com gives several examples of malls that have been repurposed as a skating rink, a satellite college campus, libraries, a light rail station, offices, residences, a startup tech company, a theater and art museums. And it is not just malls that were being repurposed prior to COVID-19. One report indicated that 128 of 267 closed automobile plants have been repurposed as follows:
Classroom discussion questions:
- What store, mall or other facility has been repurposed near where your students reside?
- What industries, aside from automobile manufacturing, will have facilities that will need to be repurposed after COVID-19.
