Alfred Weber (1868–1958): The Father of Industrial Location Theory and Supply-Chain Design

Abstract

In this chapter, Richard Church discusses Alfred Weber’s seminal work, Theory of the Location of Industries. Weber published his book in the early part of his career, and rather than attempt to describe why new industries emerge, he sought to describe why certain locations are chosen for the production of a given product. Central to his theory was the need to serve one or more places of consumption of a product with raw materials that are only found at discrete places. Most recognize Weber for what is termed the locational triangle, a figure involving the placement of a factory between two needed, localized raw material sources and one market. He is also widely recognized for his analysis of different industrial location decisions in terms of an orientation toward a raw material source or oriented towards a market. And, in addition, he was the first to describe the notions of agglomeration and the impact of specialized labor forces. But few are familiar with his detailed discussion of complexities found in production systems, involving problems of multiple plant location, capacitated raw material sources, raw material source allocation, and even staged production systems, where production is split among geographically separated production facilities. He was also the first to describe the impact of varying labor costs and the potential for a factory to be moved to take advantage of inexpensive labor, substitutable resources (e.g., coal vs. water power), and land prices. Many of these concepts and location principles form the initial basis for supply-chain design, as well as industrial and service facility location.