Transcript Location and Manufacturing

Location and Manufacturing
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Location Factors
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Availability of Raw Materials
Location of Markets
Availability of Fresh Water and Power
Labour Supply
Transportation
Political Factors
Circumstance
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Availability of Raw Materials
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A food company should process fruit and
vegetables as soon as possible, so it is
extremely important for most Food
Companies to locate near raw materials.
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Location of Markets
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A company should be located near their
customers/market, so the delivery costs
are minimized.
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Availability of Fresh Water and Power
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Many companies like steel makers and oil refiners
use a lot of water for cooling, cleaning purpose, and
for electricity. Therefore it is important to locate
near lakes and rivers.
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Labour Supply
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A lot of companies in Canada need workers with
advanced skills.
So its better for companies to locate in parts of
the country that have the universities and colleges.
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Transportation
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Its important for every company to have fast and
efficient transportation.
Transportation is very important for most
companies.
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Political Factors
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The government can make decisions that will
attract new business.
If they are not careful they can drive businesses
away.
One example is they can offer a company reduced
taxes for a couple of years or provide the land for
a new factory.
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Circumstance
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Your company will best be located in the
area where its needed.
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Questions
2. Which of these is not a Location Factor?
a.
b.
c.
d.
a. Transportation
b. Availability of Financial Resources
c. Location of Markets
d. Circumstance
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Providing Services
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BASIC SERVICES
Basic industries provides services to people
and businesses from outside the community
Communities could not survive without these
services, because they bring money into their
respective communities from outside.
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BASIC SERVICES
EXAMPLE
The federal
government in Ottawa
provides services for
Canadians
throughout the
country.
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NON-BASIC SERVICES
Non-basic services provide services for
people and business located within the
community.
These services do not generate money
from outside sources.
These services get paid either directly or
through your taxes and the money stays
within the community.
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NON-BASIC SERVICES
EXAMPLE
Transportation
Schools
Doctors/ Dentists
Local movie theatre
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Types of Industries
There are four types of industry:
•Primary
•Secondary
•Tertiary
•Quaternary
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Tertiary Industries
Tertiary industries are industries that
provide services and goods.
They are concerned with trade.
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Trade
Trade is divided into two categories:
- Wholesale
- Retail
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Trade
Wholesale - selling goods and services to
businesses or stores, but not to the public
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Trade
Retail - selling products directly to the public
- in stores, vending machines, over the
telephone, through mail order, door-todoor sale, or over the internet.
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Quaternary Industries
Quaternary industries are highly
specialized (and usually expensive),
knowledge-based, technological and
supportive.
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Question
1. An example of Basic Service is
a) Schools
b) The Federal Government
c) Doctors / Dentists
d) All of the above
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Questions
2. Quaternary industries are
a) Not
b) Lowly
c) Highly
d) None of the above
specialized
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Economic Connections
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Offshore Oil – Hibernia
• Hibernia is the largest of two oil rigs off the coast of Newfoundland & Labrador.
• It is situated on the Grand Banks.
• Specially designed to withstand 160 mph winds and waves of 30 meters.
• Located about 315 km southeast of St. John’s.
• Drilling takes place in about 80 meters of water.
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• Hibernia consists of two parts
–Topsides Production Facilities
–Gravity Base Structure.
• Topsides consists of five super
modules containing the crews living
quarters and the drilling and
production equipment.
• In addition, there are seven other
structures including cranes, lifeboat
stations, and a heliport.
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• 1979 - Chevron Canada Resources drilled a discovery
well into the northeastern portion of the Grand Banks.
• 1984 - They had drilled nine more wells into the area.
• 1985 - Findings were presented to a federal-provincial
environmental assessment panel to promote the
development of an oil project on the Grand Banks.
• 1990 - Project approved and a 25 year lease was given
to the Hibernia Management and Development
Company to construct and operate the facilities.
• 1997 - Oil and gas production begins.
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• Provides nearly 2500 Newfoundlanders with work
and transferable skills.
• Strict measures taken to prevent oil spillage from
contaminating the water.
• An “Iceberg Management Program” detects and
tracks icebergs to reduce the probability of a
collision with the GBS.
• The Rig has 16 concrete teeth protruding from its
circumference – they are designed to absorb the
impact of a 1 million tonne iceberg without damage.
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Canada’s Circulatory System
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Rail Travel
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After WW II - travel by trains decreased drastically.
•
People were traveling by cars and buses which had become more reliable.
•
This was caused by improvements to highways and lower costs for flights.
•
This decline resulted in annual Railway losses into the millions of dollars.
•
Railway companies could no longer afford maintenance and repair.
•
Passenger travel decreased as a result.
•
The federal government created Via Rail to run the few passenger services.
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Road Travel
•
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Roads are our most common means of transportation.
Government spends more than $7 B annually on construction/maintenance of
more than 900 000 kilometers of Canadian roads.
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• Roads are used by about 19 M vehicles.
• Road travel plays a vital role in Canada’s economy because the government
builds and repairs roads while drivers pay to fix, buy, and insure their vehicles.
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Automobiles
• More people travel by cars/trucks because of
their flexibility.
• Motorists operate vehicles independently
and may drive at their own pace, in relative
comfort and privacy.
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Buses
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•
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Buses are a major method for traveling between cities and distances below
1000 km.
They are used by over 1 B individuals because of their inherent
advantages…
Relatively inexpensive, comfortable, convenient, avoid traffic, and reduced
vehicle emissions.
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Air Travel
• Few countries depend on air travel as much as
Canada because of the great distances between our
cities.
• By 2004, Air Canada fell under bankruptcy protection
due to deregulation.
• Our government promptly sole Air Canada to private
investors.
• Deregulation and the sale of Air Canada proved to be
a “mixed blessing” for the air travel industry and
consumers.
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Impact of Deregulation on the Industry
• Increased Competition.
• More airlines allowed to operate flights into and out of Canada.
• Often, new airlines offered more frills to their customers, such
as catered meals on board, business-class seating, frequentflyer programs, and movies.
• Most competitors offered ticket prices that were much cheaper.
• As a result, Air Canada was forced to lower ticket prices.
• However, this proved difficult because of Air Canada’s higher
operational expenses.
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Impact of Deregulation on the Public
• Those living in large cities benefited greatly from
deregulation.
• Competition forced airlines to lower their prices and
offer more incentives.
• Customers were also provided with greater flight
selections, options, and choices.
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• Some smaller communities are only
serviced by Air Canada.
• This means that Air Canada’s prices
and offers no longer have to compete
with that of other airlines.
• There is also the fear that if Air Canada
shuts down these small communities
will not be served by any airline
because other airlines may not see
enough profit in serving them.
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Future of Air Travel in Canada
• Employees agreed to wage concessions to make the airline
more competitive.
• Attempts have been made to obtain additional funding for
operations.
• However, the effects to the terrorist attacks on the United
States in 2001 are still present.
• People seem more reluctant to fly and also are inconvenienced
by the cost and delays resulting from tighter security
measures.
• Nevertheless, because of the expanse of our country, air travel
will remain a vitally important component of Canada’s
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transportation system.
Travel by Ship
•
Although travel by ship is not very common in Canada, it is still very
important I regions like Newfoundland and Vancouver Island.
•
It is less convenient than other ways of travel due to operating expenses
and the dependence on weather.
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Movement of Goods
Moving Cargo by Rail
• Trains are a cost effective way to move
freight.
• One way to move cargo very cheaply is to
use unit trains.
• They carry only one type of cargo along
fixed routes.
• These trains use special cars designed to
carry particular cargo and make for easier
loading and unloading.
• In the 1950’s and 1960’s trains faced stiff
competition from trucks.
• Trucks have an advantage because they
are not constricted by tracks.
• They are also able to take shorter routes
and do not have the added burden of
having to transfer shipments from one
vehicle to another.
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• To compete with the trucking industry, railways developed
the Piggyback System which combines the advantage of
trucks with rail. The system runs as follows:
• A truck trailer is loaded.
• It is pulled by a truck to a nearby rail yard and loaded onto
flatcars
• The train moves the trailer to a distant rail yard near its
destination where it is unloaded.
• The trailer is then trucked to its final destination.
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• Another solution involves the use of
shipping containers.
• Freight is shipped in large metal boxes
of standard size and shape which can
be moved efficiently by trains, trucks,
ships, and/or planes.
• This system offers less risk of theft,
reduces damage to goods, and
consumes less time.
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Moving Cargo by Road
• Trucking has many advantages over rail transport:
• Trucks cost less to buy and maintain than railway cars and
engines
• Truck terminals are less expensive to build than train terminals
• Trucks are not restricted to fixed routes
• Trucks are better suited to carry lighter, less bulky cargoes
• Efficient intercity trucking is a fairly recent development.
• Before WWII, trucks were not used often because they were
small, less reliable, and roads were not dependable.
• A significant improvement in all of these categories has made 46
trucking more convenient and common.
Moving Cargo by Air
• Transportation of goods by plane is more
expensive than other means.
• It is usually used to ship goods of high value
or those that need to reach their
destinations quickly.
• Examples are: non-perishable foods,
machinery parts, and/or major pieces of
construction or manufacturing equipment in
need of repair.
• Float planes provide an additional option for 47
remote travel/delivery needs.
Moving Cargo via Pipeline
• Pipelines can be used to move gases, liquids,
and solids that have been crushed and mixed
with water.
• In Canada, they are used to move crude oil and
natural gas.
• Pipelines are expensive to build, and are used
when there is material of large quantity that is
anticipated to last for many years – or, if it is
inopportune to transport by other means.
• There are plans to build more pipelines provided
they make economic sense.
• This may occur over the next 5 - 50 years, or not
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at all.
Some Questions…
Where is the Hibernia located?
a.
b.
c.
d.
Coast of Labrador and Newfoundland
Grand Banks
Arctic Ocean
Hudson Bay
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How many barrels of oil can the Gravity
Base Structure hold?
a.
b.
c.
d.
2 Million
500,000
1.3 Million
1.9 Million
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How many vehicles use Canadian roads
each day?
a.
b.
c.
d.
10 Million
14 Million
17 Million
19 Million
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Moving cargo by ___ is the most expensive.
a.
b.
c.
d.
Air
Boats
Pipeline
Trucks
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Canadian Industries
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Offshore Oil
• Several oil companies discovered oil and
natural gas off the shores of
Newfoundland and Nova Scotia in the 60s.
• Chevron Canada had a discovery well in
Grand Banks.
• Mobil Canada drilled additional wells.
• Hibernia began producing oil in 1997.
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Location Factors for Manufacturers
• Availability of Raw Materials
Manufacturers need reliable sources of raw materials.
• Location of Markets
Companies may establish themselves near their customers/markets.
• Availability of Fresh Water and Power
A basic need of manufacturing is an ample supply of water and power.
• Labour Supply
Companies must consider the availability and cost of its labour force.
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Location Factors for Manufacturers
• Transportation
All companies require efficient modes of transportation.
• Political Factors
Governments can attract industries by encouraging a good business
climate through prudent political decision-making.
• Circumstance
Businesses can only be successful is their leaders possess and
entrepreneurial spirit and vision, and can project a potential for
business and then act on their vision.
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Transportation: Canada’s
Circulatory System
• If Canada was compared to a human
body, transportation would be its
Circulatory System.
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Rail Travel
• At one time, rail travel was most popular.
• The sudden drop in rail passengers injured the
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Canadian National Railways (CNR) and the
Canadian Pacific Railways (CPR).
In response, the federal govt. created Via Rail as
a Crown corp. to run the passenger services.
There is one exception to the sad state of
passenger service in Canada - Some cities have
commuter rails, like Toronto’s “GO” Transit
that are effective and keep their ridership.
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Air Travel
• We tend to drive or take the bus/train for
short trips but, we fly for longer trips –
occasionally even for short ones.
• For more than 60 years, Canadian air
travel was synonymous with Air Canada
(orig. Trans-Canada Airlines).
• Many airlines suffered from deregulation.
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Travel by Ship
• Travel by ship is
important in some parts
of Canada.
• Ferries are mostly used to
carry tourists or people
who live on islands to the
mainland or vice versa.
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Availability of Raw
Materials
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It is important for companies to be
close to raw materials
Fruits/vegetables should be processed
as soon as possible after picked
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Company’s Location
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Most companies choose to be close to
the majority of their customers
But sometimes they may not choose
this because their customers are all
over the world
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Fresh water and power
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Basic need for manufacturing is a
reliant supply of fresh water and
power
Most significant power source for
determining industrial location is
cheap hydro-electricity
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Labour Supply
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In the past many companies needed a
large - low-cost labour force
Canada has difficulty competing with
Mexico and the U.S. due to their lowcost sources of labour
Companies in Canada are more likely
to need workers with advanced skills
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Transportation
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Every company needs fast and
efficient transportation
Some companies use air freight, while
others use ships
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Political Factors
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Governments offer companies
incentives if they locate in certain
areas
Some things they might offer: reduced
taxes for X no. of years, makes certain
to provide a location adjoining their
necessary raw materials
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Circumstance
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An entrepreneur is someone who sees
the sales potential for a new business
and takes action
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Auto Industry
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Auto parts are our most important manufactured
products and exports
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The “Auto Pact” was signed with the U.S. in the 60s
requiring Canada to build a min. number of cars
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Canada must remain competitive to build cars
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The Auto Pact is gone now and under the NAFTA,
cars built in Mexico, can be sold across North
America, where labour costs are low.
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Providing Services
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The number of service jobs has
increased as business and
governments have becomes more
complex
Today more than 75% of Canadians
are employed in tertiary industries
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Providing Services
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1901 - only 33% of Canadians
employed in services
Why has the number gotten larger…?
1900s – reliance on machinery for
farming, mining, and forestry
increased productivity and revenues
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Providing Services
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Workers received more money and
more free time
Better standard of living increased
service demand
Population growth also expands
services
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Basic Services
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Provide services to people and
business outside the community
e.g. The federal government of
provides services for all Canadians
Universities attract students from
outside their communities
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Non-Basic Services
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Industries provide services for people
and businesses in the community
Do not generate money from outside
sources
E.g. public transportation, dentist,
theaters
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Trade Services
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Selling goods is called trade.
Wholesale – selling goods and services
to businesses, not to the public
Retail – selling goods and services to
the public in stores, vending machines,
over the phone, or via the Internet
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Finance, Insurance, Real
Estate Services
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Services provided by banks, trust
companies, credit unions, stock
exchanges, insurance companies and
real estate companies
These companies range in size from
local business to large corporations
doing business all across Canada
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Business and Personal
Services
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Largest category of tertiary industry
Fastest growing employment area in
the economy
e.g. Hair salon, law firm, personal
fitness trainer.
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Transportation and
Communication Services
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Involves the movement of goods,
people and information
e.g. truck driver, railway engineer,
cable television installer.
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Government Services
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Federal: Postal Service, National Defense,
Native Affairs
Provincial: Health and Social Services,
Education, Natural Resources
Municipal: Police and Fire protection, Water
and Sewage Services, Parks and Recreation
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Health Care and Social
Services
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Health Care Services includes dental
care, medical care and research
Social Services include Day-Care
Centers and Shelters for the Homeless
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Education Services
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Includes elementary and secondary
schools, post-secondary education,
vocational training, religious training
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Quaternary Industries
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Quaternary Industries: highly
specialized, knowledge-based, or
technological services
National Microbiology Laboratory
(NML) in Winnipeg
Advanced health facility designed to
promote public health, conduct
research, and provide training
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Quaternary Industries
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NML has done work to fight problems
like SARS, West Nile disease and “Mad
Cow” disease
China, India and other countries have
advantage of cheap labour
Canada must find an advantage
somewhere else
One thing in our favour is that we
have a large, skilled labour force
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Future Trends
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Rapid changes are occuring in the
workplace due to globalization of the
economy, free trade, and technological
advances.
Changes may eliminate jobs that we now
take for granted, or they may provide new
employment opportunities.
Many people now find employment in jobs
that did not exist 30 years ago.
e.g. Internet-related jobs and personal
trainers
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Movement of Goods
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Every day, Canada’s transportation system
handles cargo that ranges from 50 000
tonnes of coal to 100 kg of live lobsters.
Some cargo must be moved quickly, without
concern for transportation costs.
Other shipments can be left to travel slowly
to keep costs as low as possible.
Some cargo can be easily damaged and
needs special protection.
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Moving Cargo by Rail
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Canada’s railways are the backbone of our
freight-carrying system
Railways carry many varieties of freight and
are particularly good for moving bulk
cargo such as coal, grain, wood, and oil
Bulk cargoes have large volume and
relatively low value
They often need to be moved as cheaply as
possible
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Moving Cargo by Rail
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One way to move cargo cheaply is to
use a unit train
They are limited to carrying only one
type of cargo along fixed routes
These trains use special cars that are
designed to carry specific cargo and
they are devised to be loaded and
unloaded quickly and cheaply.
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Moving Cargo by Rail
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The 50s and 60s found railways in stiff
competition with the trucking industry.
Trucks have distinct advantages because
they are not confined to tracks.
Railways were compelled to find better
ways to compete.
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Piggyback System
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Combines the advantages of trucks with rail.
Truck trailer is loaded at factory
Is pulled by a truck to a nearby rail yard
Loaded onto flatcars
Train moves the trailer to a distant rail yard
near its destination
It is then unloaded
Trailer is trucked to its final destination
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Shipping Containers
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Even more flexible than the Piggyback System
Shipping containers can be moved by rail, truck,
ship or air
Freight is shipped in large metal boxes of standard
size and shape
Container is loaded by the shipper and can be
moved by any combination of trains, trucks, ships
and planes
Before development of containers, freight had to be
loaded and unloaded piece by piece
This proved time-consuming and costly
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Moving Cargo by Road
Trucking has some advantages over rail
transport:
 Trucks cost less to buy and maintain
 Truck terminals are less expensive to build
 Trucks are not restricted to fixed routes
 Trucks are better suited to carry lighter, less
bulky cargoes
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Moving Cargo by Ship
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Ships are best suited for moving bulky
and low value cargo
e.g. grains, iron ores, coal, petroleum,
lumber, cement, sand, and gravel
We can better understand Canada’s
water-borne freight system by
dividing it into 4 parts:
–
–
–
–
West Coast
East Coast
St. Lawrence Seaway
Canada’s Far North
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The West Coast
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Enormous amounts of cargo are shipped
through West Coast ports (especially
Vancouver) and usually to the Pacific Rim
Pacific Rim: countries that border the Pacific
Ocean in the Americas, Asia, and Oceania
Much of Canada’s export trade in lumber,
coal, potash, wheat and other bulk cargoes
goes there
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The East Coast
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East Coast ports like Halifax, Saint
John and Montreal are used for a wide
variety of cargo with more container
freight and less bulk cargo
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The St. Lawrence Seaway
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Is a system of canals and locks that link the St.
Lawrence and the Great Lakes
Allows ships from the Atlantic Ocean to reach
3800 km inland
Of vital importance for the movement of bulk
cargo from one part of the Great Lakes to
another
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Canada’s Far North
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Presents special transportation problems
Distances are great and climate is harsh
Freight must be moved by air or water
Expensive to ship freight by air
Shipped by water whenever possible
Ships are used to move bulky cargoes like oil
products, building materials, and machinery
Also brings residents many of the groceries they need
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Moving Cargo by Air
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Amount of freight carried is small compared to that
moved by rail, road, or ship
Freight can be moved very quickly, delivery
available the next day in some cases
Goods that are shipped have these characteristics:
Light in weight and small in size, e.g., jewelry
Of high value, e.g., electronic equipment
Perishable, e.g., flowers
Needed quickly, e.g., machinery parts that are need
to repair a major piece of construction
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Moving Cargo by Pipeline

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Can be used to move gases, liquids and
even solids that have been crushed and
mixed with water
Can be built only when two specific
conditions exist:
– Supply of suitable material is to be moved and
that is of significant quantity to last for many
years
– An inability to transport by ship - which is usually
cheaper
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