Aligning an enterprise footprint primarily creates value through infrastructural and operational economies of scale and flexibility. Decreases in real estate expenditures and redundant positions are fundamental value drivers; however, other geographically variable operating conditions and costs can also contribute ongoing value.
Footprint optimization can be costly and time consuming. But companies able to do so are realizing shortterm financial benefits and are likely better positioning themselves for longterm success. Aligning an enterprise footprint primarily creates value through infrastructural and operational economies of scale and flexibility.
Increasing volatility in energy costs is another trend significantly influencing footprint decisions. When fuel prices soared late in 2000, some companies brought manufacturing back from distant lowcost countries, while others increased their distribution capacity to get closer to customers.