TOPIC 1: FACTORS AFFECTING PLANT LOCATION

The location of the plant can influence the success of the industrial venture. Primarily the plant
must be located where the minimum cost of production and distribution can be obtained and
safe living conditions for plant operation as well as the surrounding community are also
important.
The key factors to be considered are:
1. Raw material availability.
2. Location of nearby market area
3. Transport facilities.
4. Availability of labors.
5. Availability of utilities
6. Environmental impact and effluent disposal
7. Taxations and legal restrictions
1. RAW MATERIALS AVAILABILITY: The source of raw materials is one of the most important
factors influencing the selection of a plant site. This will result in the reduction of the
transportation and storage charges. Attention should be given to the purchased price of the
raw materials, distance from the source of supply, freight and transportation expenses,
availability and reliability of supply.
2. LOCATION: The location of markets or intermediate distribution centers affects the cost of
product distribution and time required for shipping. The buyer usually finds advantageous to
purchase from near-by sources.
3.TRANSPORT: The transport of materials and products to and from plant will be an overriding
consideration. A site should be selected so that it is close to at least two major forms of
transport: road, rail, Road transport is being increasingly used and is suitable for local
distribution from a central warehouse. Rail transport will be cheaper for the long-distance
transport.
4. AVAILABILITY OF LABOURS: Labors will be needed for construction of the plant and its
operation. Skilled construction workers will usually be brought in from outside the site, but
there should be an adequate pool of unskilled labors available locally; and labors suitable for
training to operate the plant. Skilled tradesmen will be needed for plant maintenance. Local
trade union customs and restrictive practices will have to be considered when assessing the
availability and suitability of the labors for recruitment and training.
5. AVAILABILITY OF UTILITIES: This includes Water, Fuel and Electricity which are briefly
described as follows: (i) Water: - The water is required for large industrial as well as general
purposes, starting with water for cooling, washing, steam generation..etcThe plant therefore
must be located where a dependable water supply is available namely lakes, rivers, wells, seas.
(ii) Electricity: - Power and steam requirements are high in most industrial plants and fuel is
ordinarily required to supply these utilities. Power, fuel and steam are required for running the
various equipments like generators, motors, turbines, plant lightings and general use and thus
be considered as one major factor is choice of plant site.
6. ENVIRONMENTAL IMPACT AND EFFLUENT DISPOSAL: In choosing a plant site, the permissible
tolerance levels for various effluents should be considered and attention should be given to
potential requirements for additional waste treatment facilities. The disposal of toxic and
harmful effluents will be covered by local regulations, and the appropriate authorities must be
consulted during the initial site survey to determine the standards that must be met.
7.TAXATION AND LEGAL RESTRICTIONS: State and local tax rates on property income,
unemployment insurance, and similar items vary from one location to another. Local
regulations on zoning, building codes, nuisance aspects and others facilities can have a major
influence on the final choice of the plant site.
TOPIC 2: TOTAL QUALITY MANAGEMENT
Total Quality Management (TQM) is a management approach that seeks to provide long-term
success by providing unparalleled customer satisfaction through the constant delivery of quality
services. To properly execute on TQM methods, the entire organization needs to operate as a
single unit in the pursuit of excellence.

The work culture of TQM is very much similar to the Six Sigma Concept, though both are not the
same. The process relies on the matter of fixing internal guidelines and the standard of the
process while six sigma focuses upon detecting defects.
Thiscan be accomplished with a laser-focus on the principles of TQM:

 Customer First – First and foremost pillar of success is an unwavering focus on the
customer’s experience in all interactions with the organization. From first contact
through purchase and continued support, the customer should always be the main
priority.

Assess customer requirements

Understand present and future customer needs

Design products and services that cost-effectively meet or exceed those needs

 Employee Ownership – TQM requires the involvement of every team member to

ensure that complete quality control is offered at every level. TQM doesn’t focus on
a single department because the goal is to provide customers with a great
experience from every level of the organization.
 Process-Based – TQM focuses on the creation and implementation of processes
that provide organizations with the ability to find success and repeat it. Quantifying
success and defining the steps taken to get there are essential for successful
implementation of TQM.
 System Integration – TQM strategies revolve around leveraging every asset
available to the company. This is best achieved through system integrations that
combine disparate parts of the organization into a single, well-oiled machine
working in complete synergy.
 Communication – TQM requires every team member to be at their best and to
function as a value-adding member of that team. This means communication and
transparency is a core tenet of successful TQM practices.
 Constant Improvement – TQM isn’t a one and done process. Perfection is
impossible, so it must always be pursued to get the organization as close as
possible to it.

Deliver quality

 Identify the key problem areas in the process and work on them until they approach
zero-defect levels
 Train employees to use the new processes
 Develop effective measures of product and service quality
 Create incentives linked to quality goals
 Promote a zero-defect philosophy across all activities
 Encourage management to lead by example
Effects of TQM:

 Reduce risk and mitigate risk when designing new products and processes
 Resolve problems before they occur
 Resolve problems that occur during operations
 Improve supplier performance
 Control processes to avoid risk even when scaling up
 Increase productivity or all employees
 Reduce the total cost of quality not just the costs of poor quality of products

Companies use Total Quality Management to:

TQM improves profitability by focusing on quality improvement and addressing associated

challenges within an organization. TQM can be used to:

 Increase productivity
 Lower scrap and rework costs
 Improve product reliability
 Decrease time-to-market cycles
 Decrease customer service problems
 Increase competitive advantage
TOPIC 3: Types of Production

Job Production Method

When producing high quality or highly specialized products such as Hand crafted Watches, job
production is the method typically used. Job production focuses on a single item at a time and
usually requires a specific set of skills depending on the product being produced. These skills
can be hard to come by and could require extra time spent in hiring production employees.

Artisan and handcrafted brands utilize job production methods to create their exclusive
products, but at a much slower pace and typically for an individual customer or very small
audience.

Depending on your brand, there are many benefits of working with a job production method
including increased customer satisfaction. Additionally if the products being produced aren’t
too complex many skilled laborers can be hired to produce your products efficiently around the
world in artisan communities.

Characteristics:The job production possesses the following characteristics.

 A large number of workers conversant with different jobs will have to be employed.
 Some flexibility in financing is required because of variations in work load.
 A large inventory of materials, parts and tools will be required.
 The movement of materials through the process is intermittent.

Limitations: Job production has the following limitations:

 The economies of large scale production may not be attained because production is
done in short-runs.
 The demand is irregular for some products.
 The use of labour and equipment may be an inefficient.

Batch Production Method

Batch production is when a facility manufactures specific groups of pieces or completed

products in small preset batch sizes. This kind of production method is usually adopted by small
companies as its capable of reducing the initial capital outlay. Batch production makes it easier
to control the quality and schedule of production as everything from designs to material
requirements are standardized for specific product variations well before production begins.
Often times batch production methods are used to create elements of a final product which will
go through multiple stages before the final product itself is completed. This also gives the
manufacturer the capability to produce several products in different variations.

For example, a production order for 1,000 caps of the same dimensions, where half are
required to be white and the other half red, batch production is the best option. It allows the
manufacturer to create 500 white caps and then quickly retool the line, in this case change the
dye color, to produce 500 red caps. Although, this also has its own set of drawbacks as the
production line must be put to a halt and reconfigured between each batch.

While materials will be cheaper due to order in bulk and labor costs will be lower as batch
production doesn’t require a highly skilled team, there will be drawbacks when it comes to
storing your products. Warehousing costs can quickly add up so it’s crucial that companies
order only as much product as they need for the time in between production runs.

The batch production method possesses the following characteristics:

 The work is of repetitive nature.

 There is a functional layout of various manufacturing processes.
 One operation is carried out on whole batch and then is passed on to the next
operation and so on.
 Same type of machines is arranged at one place.

Flow Production Method

If your brand plans to produce complex products such as kitchen appliances or furniture you’ll
most likely deal with flow production methods somewhere in your product’s production
process.

Flow production involves passing of sub-assemblies or individual parts from one production to
the next until the final product is completed. This way, production lines for each stage of the
completed product’s production cycle can run without interruption even if another line needs
to be retooled.

There are many benefits to utilizing flow production in a mass production process; however,
creating unique assembly lines for each sub-assembly is exclusive to massive production orders
as the costs are too high to be justifiable for smaller production runs. In many cases, flow-based
assembly lines produce the exact same product for years if not decades before any changes are
made.

Characteristics
 There must be continuity in demand for the product.
 The products, materials and equipments must be standardised because the flow of
line is inflexible.
 The operations should be well defined.
 It should be possible to maintain certain quality standards.

Mass Production Method

Mass production, sometimes utilizing flow production, cuts out the problem of downtime
associated with batch manufacturing. Although, this method will only be cost-effective when
producing large quantities of the same product, which makes it difficult to utilize as a new
business or for those operating in niche markets. The concepts of mass production can be
applied to all sorts of products, from food, fuel, chemicals and mind minerals to discrete
substantial parts, such as fasteners, to assemblies of individual parts for things such as
automobiles or household appliances.

Mass productions are usually almost fully automated, requiring only a minimal amount of staff
to monitor the process and perform random quality checks. Producing large quantities means
that the price of each individual unit will be greatly reduced. However, due to the nature of this
process high quality control can be difficult to achieve and defect rates tend to run higher.

Mass production has its benefits, but the initial production costs required and the lack of
quality control makes it something smaller businesses should be cautious about pursuing.

Characteristics:

 The units flow from one operation point to another throughout the whole process.
 There will be one type of machine for each process.
 The products, tools, materials and methods are standardised.
 Production is done in anticipation of demand.

Advantages

 The product is standardised and any deviation in quality etc. is detected at the spot.
 There will be accuracy in product design and quality.
 It will help in reducing direct labour cost.
 There will be no need of work-in-progress because products will automatically pass
on from operation to operation.