Optimal Regional Distribution Center Location of Technology Companies in Eastern Europe: A Quantitative and Qualitative Perspective

Owing to a very favorable investment climate predicted for the years to come, Central and Eastern European (CEE) facility locations are increasingly getting into the consideration set of decision makers. Especially technology companies in the mobile device, PC and notebook, and consumer electronics industries, constantly facing extremely high margin pressure and short product lifecycles, strive for cost‐ and revenue‐related advantages by locating parts of their supply chain in this region. The optimal regional distribution center location in CEE is a strategic location problem of particular interest to these mainly Asian‐based electronics manufacturers and their regional logistics service providers.To systematically deal with the problem at hand, a multi‐criteria decision making model is developed in collaboration with DHL Supply Chain, incorporating quantitative and qualitative perspectives. Secondary data on selected location factors is collected for a predetermined set of CEE countries, i.e. Czech Republic, Hungary, Poland, and Slovakia, from multiple statistical sources. In parallel, an expert study is conducted among supply chain professionals who are asked to evaluate the location factors of relative importance from a sectoral perspective. Finally, both country statistics and expert weights are aggregated into total country scores to be interpreted in terms of strengths and weaknesses of each country, most influential location factors, national competitive advantage, and best‐fit solutions for different supply chain objectives.