PRODUCTION

OPERATIONS

MANAGEMENT
Vol. 01

Authors:
Mia Kusmiati, SE., MM., CT., MOS., MCE.
Dr. Avinash Pawar, Ph.D., MBA., B.E.

PENERBIT CV. AKSARA GLOBAL AKADEMIA

2022
PRODUCTION

Mia Kusmiati, SE., MM., CT., MOS., MCE

OPERATIONS
Dr. Avinash Pawar, Ph.D., MBA., B.E.

MANAGEMENT
PRODUCTION OPERATIONS MANAGEMENT
Vol. 01

Authors:
Mia Kusmiati, SE., MM., CT., MOS., MCE
Dr. Avinash Pawar, Ph. D., MBA., B.E

Editor:
Dr. Budi Pramono, S.IP., M.M., M.A., (GSC)., CIQaR., CIQnR., MOS., MCE., CIMMR
Dr. Ir. Lukman Yudho Prakoso, S.IP., MAP., M.Tr.(Opsla)., CIQaR., IPU

Desain Cover & Layout :

Putri Novia Ardianti

ISBN: 978-623-6387-81-8 (jil.1 PDF)

84 pg, 21 x 28 cm
 Foreword
Each business is manage through three main functions, namely: Finance, Marketing and Operations
Management. Finance is the function responsible for managing cash flow, current assets, and
investments. Marketing is responsible for selling, generating customer demand, and understanding
customer wants and needs. Most of us have opinions about what finance and marketing are, but what
does operations management do? This book universally discusses the analysis of theories and concepts
and practices of operations and production management in manufacturing and services completely
and comprehensively, which is expected to contribute ideas as well as a means to broaden knowledge
and academic literature within the scope of management science in production concepts, a widwe
scope including quality management and maintenance of work-study methods which are very
important in improving the performance of the industry itself. Currently, the concept of operations and
production has been carried over to a large number of economic sectors including non-manufacturing
such as transportation, energy, health, agriculture, banking, and so on. It all goes into satisfying
production management that works for no people, machines, and materials in providing the desired
goods and services or the market.
Because manufacturing and services involve these features, the term production management
gradually became dependent on the terms Operations Management or Operations Management. This
book is expected to be an inspiration and reference that will provide benefits for the development of
the Tri Dharma of Higher Education with the hope that the author's minimalist work presents this article
as widely as possible for the advancement of science in the world future
 Synopsis
This book discusses the concepts and theories as well as case examples that
lead to successful operations management, by adding value to the
transformation process. We use the term value added to describe the net
increase between the final value of the product and the value of all inputs.
Today's business environment is more competitive than ever, and the role of
operations management has become the focal point of efforts to increase
competitiveness by increasing added value and efficiency.
This book discusses Production Management, Manufacturing Methods,
Location Planning and Layout
 STRUCTURE
04 08
Foreword UNIT 1
The Production

(Manufacturing) Function

06 32
Synopsis UNIT 2
Manufacturing Methods

07 56

Structure UNIT 3
Facilities (Plant) Location
UNIT 1

THE PRODUCTION

(MANUFACTURING)

FUNCTION
 Objectives
After going through this unit, you will be able to :

Describe the concept and objectives of production and

operations

Outline the functions of production management

Outline the historic development of the production

function
Explain the concept of productivity
 Introduction
The production (or manufacturing) management

since long has been associated with a factory

situation where goods are produced in physical

sense.

Factory has been defined - “as any premises in

which persons are employed for the purpose of

making, altering, repairing, ornamenting, finishing,

cleaning, washing, breaking, demolishing, or

adopting for sale, any article.”

“Production is the process by which goods and

services are produced”.

 Introduction
The essential feature of a production function is to

bring together people, machines, and materials to

provide goods and services thereby satisfying the

wants of people. Since both manufacturing and

service organizations involve the above-mentioned

features, the term production management is

gradually being replaced by Operations

Management.

This broader concept of production brings in a large

number of seemingly non-manufacturing sectors of

the economy
Operation Concept of

Production
The concept of “Operations” instead of

“Production” includes both manufacturing as well

as service organizations. Operations in a

manufacturing as well as in a service organization

represent purposeful activities of the organization

Operations function is the heart of and indeed the

very reason for existence of any organization. All

operations add value to the objects thereby

enhance their usefulness

An operation may be defined “as the process of

changing inputs into outputs thereby adding value

to some entity”.
 Value Adding Process
The value is added to the entity by one or more of the following ways:

Alteration refers to the change in form or state of inputs. Such a change may

be physical as in any machine shop/press shop/assembly shop operation

Transportation refers to the movement of the entity

Storage refers to the process of keeping an entity in a protected environment

Inspection refers to the process of verification of entity for its properties

Production as The Conversion Process
 Productivity of
Effectiveness of production

management may be viewed as

Conversion Process the efficiency with which inputs

are converted into outputs. This

conversion efficiency can be

gauged by the ratio of the output

to the input and is commonly

known as productivity of the

system

The higher the productivity of

production system, more efficient

the production function is said to

be
 Productivity of

Conversion Process

Management of production system thus is essentially concerned with management

of productivity

Another way of looking at the concept of productivity is to look at the amount of

waste generated in the system. If the waste is unnecessary output and/or defective

output from the system, then the productivity of the system can be improved by

eliminating/minimising the waste occuring in the system.

Wastes in The Conversion Process
Idling of the resources (e.g. materials waiting in the form of inventory in

stores, machines waiting to be loaded, job orders waiting to be processed,

patients waiting to be attended to etc.)

Production of defective goods and services (e.g. components/parts not

conforming to specifications, wrongly delivered letters, etc.)

Higher conversion costs (higher costs resulting from inefficient methods, poor

quality of tools, bad condition of machines, wrong selection of materials,

poorly trained operators, ineffective supervision).

Higher total throughput time (due to waiting time, hunting time, queueing

time, buried waiting time etc.)

Types of Wastes

Transportation
Inventory
Motion
Waiting
Over-processing
Over-production
Defect
Objectives of

Production

Management

Right quality, right quantity,

The objectives of production

right time and right price

management are “to

are the four basic

produce goods and services

requirements of the
of the right quality, in the

customers and as such they

right quantities, according

determine the extent of

to the time schedule and at

customer satisfaction. a minimum cost”.

Objectives of

Production

Management
Producing the right kind of goods and
Minimising throughput time – the time

services that satisfy customers’ needs

that elapses in the conversion process -

(effectiveness objective). by reducing delays, waiting time and idle

time (lead time objective).

Maximising output of goods and services

with minimum resource inputs (efficiency

Maximising utilisation of manpower,

objective). machines, etc. (capacity utilisation

objective).
Ensuring that goods and services

produced conform to pre-set quality

Minimising cost of producing goods or

specifications (quality objective). rendering a service (cost objective).

 Components of

Production

Function
Production engineering is concerned with the design of physical equipment while

the production management is concerned with the management of the use of

equipment and other resources.

Production management is essentially planning, organising and controlling of

production function

Product selection and design

Process selection and planning

 Components of

Production

Function
Facilities (Plant) location Inventory control

Facilities (plant) layout and materials

Quality assurance and control
handling
Work Study and Job design
Capacity planning
Maintenance and replacement
Forecasting
Cost reduction and cost control
Production Planning and Control (PPC)
 Organization Structure
Divisions of the organization namely marketing, manufacturing, finance, personnel

are set up as staff function and production constitutes a key department of

manufacturing division
Responbilities

of a Production

Manager
To devise efficient methods of manufacturing based on

To forecast the requirement of factors of production to

method study and other engineering economic

meet target of production

principles.
To utilise the factors of production in the most efficient

To continually improve labour productivity by training of

manner.
workmen and implementing performance standards

derived from work measurement studies etc.

To reduce quality costs by periodical analysis of non-

conformances and undertaking suitable corrective and

To minimise throughput time and work-in-process

preventive actions.
inventory by systematic planning of production and

efficient execution of plans.

To reduce material handling costs by using efficient

material handling systems and correctly developed

To build team spirit and motivate workmen by personal

plant layouts.
involvement and by designing and implementing

suitable financial incentive schemes

Production As A Co-

Ordination Function
Production plays a vital role in co-ordinating efforts with three other major functions
of an organisations, namely Marketing, Finance and Personnel

Sales department prepares forecasts giving products and quantities to be sold,

price of each product, profit margin etc

Production prepares manpower needs and finalises the manpower plan with

personnel department and personnel department in turn makes arrangement for

recruitment and training

Production prepares the specifications of the new machines and discusses

investment plans of the factory to meet target of production with finance

department
 Summary
Production is the
Effectiveness of production
Production management is

process by which
management is the
essentially planning, organising

goods and services

measurement of efficiency
and controlling of production

are produced and it

with which the inputs are
function. Main components of

includes both
converted into outputs. The
production function are: product

manufacturing as
basic objectives of
selection and design, process

well as service
production management
selection and planning, facility

organisations. are to produce goods or

location, facilities layout and

services of the right quality,

material handling, capacity

in the right quantities, at

planning, production planning and

the right time and at the

control, quality control, work study

minimum cost. and job design, maintenance and

replacement
 Summary
Organisation structure of the
Responsibilities of a production

production department is to be
manager are: forecasting the

tailor-made for a firm. In a

requirement of factors of

typical organisation, the main

production, utilising factors of

divisions of the organisation,

production in the most efficient

namely design, marketing,

manager, reducing quality costs,

manufacturing, finance and

devising efficient methods of

personnel are set up as staff

manufacture, training of workmen,

functions and production

minimising throughput time and

constitutes a key department

work-in-process, building team

of the manufacturing division. spirit and motivating workmen for

higher productivity.
 Keywords

1 2 3
Factory Production
Operations
Any premises in which

persons are employed for

The process by which
The process of changing

the purpose of making,

goods and services are
inputs into outputs thereby

altering, repairing,
produced adding value to some

ornamenting, finishing,
entity

cleaning, washing, breaking,

demolishing, or adopting for

sale, any article

 Keywords

4 5
Production

Productivity
Management
Measure of efficiency of

Planning, organising and

conversion process; ratio

controlling of production
of input to output
function.
Self-Assessment

Questions
What do you understand from production management?

What are the objectives of production management?

How does production management differ from operations

management?

What are the different components of production function?

Describe them briefly.

Give a typical organisation structure of a company

manufacturing single product.

What are the responsibilities of a production manager?

Explain briefly the inter-management functional relationship

of production management and other functions:

UNIT 2

MANUFACTURING

METHODS
 Objectives
After going through this unit, you will be able to :

Determine the importance of the manufacturing method

Analyse the factors influencing choice of manufacturing

method
Identify the characteristics of each method
 Introduction
The combination of operations and activities,

employed to create goods and services, is known as

manufacturing system or method

Manufacturing method needs to interact with both

internal and external environment

A manufacturing method, therefore, may be looked

upon as an independent group of sub-systems, each

sub-system performing a distinct function.

 Introduction
The internal environment is the combination of

engineering, marketing, personnel and accounts

activities whereas external environment comprises of

customers, competitors, suppliers, labour unions etc

Decision on manufacturing method has direct

bearing on vital aspects like manufacturing cost,

quality.

The manufacturing method selected should be such

that it can give the desired output, required quality

and is cost-effective.
 Factors Influencing Choice
of Manufacturing Method

The choice of the method depends on various circumstances

The method selected, it must meet two basic objectives

(i) It must be able to meet the specification of the final product, and
(ii) It must be cost effective.
 Factors Influencing Choice
of Manufacturing Method
Various factors which determine the choice of the manufacturing process are

as follows:

Effect of Volume/variety : One of the major considerations in the process

selection is the volume/ variety of the product(s)

Capacity of the plant : The projected sales volume is a major influencing

factor in determining whether the firm should go in for continuous process

Flexibility : Flexibility implies the ability of the company to satisfy varied

customer’s requirements
 Factors Influencing Choice
of Manufacturing Method
Lead time : Time taken by procuring, manufacturing and delivering product

Efficiency : Efficiency measures the speed and the cost of the

transformation process.

Environment : Environment brings in new technologies and forces the

adoption of new process of manufacturing

 Classification of

Manufacturing

Methods
Manufacturing methods can basically be classified into five groups:

Project production where a single assignment of complex nature is undertaken for

completion within the given period and within the estimated expenditure.

Jobbing production where one or few units of a product are produced to

customer’s requirement within the given date and within the price fixed prior to the

contract

Batch production where limited quantity of each type of product is authorized for

manufacture at a time.
 Classification of

Manufacturing

Methods

Mass and flow production where a production run is conducted either on a single

machine or on a number of machines, arranged according to the sequence of

operations and several number of a product are manufactured at a time and

stocked in warehouse awaiting sales.

Process production where production run is conducted for an infinite period. The

above mentioned manufacturing methods

 Classification of

Manufacturing Methods
 Project Production
Project production is characterized by complex sets of activities that must be

performed in a particular order within the given period and within the

estimated expenditure.

The product of a project production is unique/ nonrepetitive eg ships,

locomotive, and aircraft, roads, buildings, etc.

Where output of a project is a product, such products are generally

characterised by immobility during transformation. Operations of such

products are carried out in “fixed position assembly type of layout” which can

be observed in production of ships, locomotive and aircraft, construction of

roads, buildings, etc.

Characteristics of

Project Production

Definite beginning and definite

end
Non-uniform requirement of

resources
Involvement of different agencies
“Fixed position” layout
High cost overruns
Personnel problems
Jobbing

Production

Jobbing production is characterized by the manufacture of one or few

number of a single product designed and manufactured strictly to customer’s
specifications, within the given period and within the price fixed prior to the
contract. Ex: general repair shops; special purpose machine tool
manufacturers; workshops to manufacture jigs and fixtures for other units;
Characteristics

of Jobbing

Production

Small production runs

Discontinuous flow of materials
Disproportionate manufacturing cycle time
General purpose machines and process layout
Highly skilled labour
Large work-in-progress
Limited functions of production planning and control
Batch

Production
Batch production is characterized by the manufacture of a limited number of
a product (but many such quantities of different products) produced at
periodic intervals and stocked in warehouses as finished goods (or finished
parts) awaiting sales (or withdrawal for assembly). Typical examples of
batch production are: process industries such as pharmaceuticals, paints,
chemicals; medium and heavy engineering industry engaged in the
manufacture of electric motors, switch gears, heavy motor vehicles, etc
Characteristics

of Batch

Production
Short runs
Skilled labour in specific trades
Supervisor to possess knowledge of a specific process
Limited span of control
General purpose machines and process type of layout
Manual materials handling
Flexibility of production schedules
Need to have production planning and control
Mass and Flow

Production
Mass as well as flow production is characterised by the manufacture of a
several number of a standard product produced and stocked in the
warehouse as finished goods awaiting sales.
The goods under mass production are manufactured either at a single
operation or a series of operations on one machine. And goods under
flow production are manufactured by a series of operations on different
machines, arranged as per sequence of operations.
Typical examples of mass production units are continuous manufacturing
industries such as plastic goods, sintered products, hardware etc. Typical
examples of flow production are: manufacture and assembly shops of
automobiles, refrigerators, radios, television sets, electric fans, etc.
Characteristics of

Mass and Flow

Production

Continuous flow of material

Special purpose machines and product type layout
Mechanized materials handling
Low skilled labour
Short manufacturing cycle time
Easy supervision
Limited work-in-progress
Lesser flexibility in production schedules
Process Production

Process production is characterized by the manufacture of a single product

produced and stocked in the warehouses awaiting sales. The flexibility of
such plants is almost zero as only one type of product can be produced in
such plants. Typical examples of such plants are sugar, steel, cement, paper,
coke, refineries, etc.
Process Production

Special purpose machines with built-in controls

Highly mechanized/ automated materials handling
Virtually zero manufacturing cycle time
Low skilled labour
Supervisor to be processes specialist
Negligible work-in-progress
 Selection of The

Manufacturing Methods
A manufacturing method like a product also has life cycle. When the product is
introduced it is made in small volume in an inefficient manner using the project
form.

Most organizations combine two or more of these pure forms to produce

components and the final product

Break-even-analysis is one of the most suitable techniques for selecting the optimal
manufacturing method. At the introduction stage, the product is produced on
general purpose equipment with little or no commitment on fixed cost
 Summary
Two extreme forms of manufacturing Different factors which influence the
methods are project production and choice of manufacturing method
continuous production. Project include volume, variety, capacity,
production is a single assignment of flexibility, efficiency and environment…
complex nature while continuous Very few organizations use only one of
production is the manufacture of infinite these manufacturing methods in its
quantity in a single run. Between these pure form. Most organizations combine
two extremes are four different two or more of these pure forms. A
manufacturing methods namely jobbing manufacturing method like a product
production, batch production, mass also has a life cycle. Break-even-
production and process production. The analysis is helpful in selecting the
degree of repetitiveness increases from optimal manufacturing method.
jobbing production to batch production.
 Keywords

1 2 3
Manufacturing
Project
Jobbing
Method Production
Production
The combination of
Complex sets of activities
The manufacture of one or

operations and activities

that must be performed in
few number of a single

stated above, employed to

a particular order within
product designed and

create goods and services. the given period manufactured strictly to

customer’s specifications.
 Keywords

4 5
Mass / Flow

Process
Production
Production
Manufacture of large

Manufacture of a single

number of a standard

product in huge quantities

product produced and

and stocked in the

stocked in the warehouse as

warehouses awaiting

finished goods awaiting

sales.
sales.
UNIT 3

FACILITIES

(PLANT) LOCATION
 Objectives
After going through this unit, you will be able to :

Identify the importance of location decisions

Determine when plant location decisions need to be

made

Analyse the factors governing location decisions

Compare rural, urban and suburban sites
What is Plant

Location?
The definition of plant location is a location where

a plant should be located while determining the

maximum effectiveness and operating economy.

The place of the plant should offer the lowest cost

when the cost of production and delivering the

goods to consumers have been calculated.

Plant location consists of picking a region for the

plant, as well as the selection of the locality and

the site. Plant location is needed when a brand

new plant is being started or when an old plant is

being expanded. Sometimes old locations are

unable to renew a lease and the plant needs to

find a new location within that area.

 Introduction
Plant location decisions concern both manufacturing

and service organisations. Ideal plant location is

important for business activities both in

manufacturing and service category

Plant location decisions being strategic, long term

and non-repetitive.

Plant Location refers to the choice of region and the

selection of a particular site for setting up a

Business or Factory.
 Consequences of Plant Location
Poor location of the plant can be constant source of higher cost, difficult

marketing and transportation, dissatisfaction among the employees and

customers, frequent disturbances in production, substandard quality,

competitive disadvantage etc

Once plant is set up at a particular location, its is comparatively immobile and

can be shifted later only at a considerable cost and interruption of

production.

The investment in land and buildings is quite large in case of bigger firms and

economics of one location against other needs to be evaluated carefully to

ensure fair return on such investment

Need For

Location

Decisions
Locational decisions generally arise when: There is emergence of new social (chronic

labour problems), political (political instability)

A new manufacturing (or servicing) unit is

or economic conditions which suggest a change

to be set up. in the location of the existing plant.

Existing plant operations are difficult to

The product developments have out weighed the

expand due to poor selection of the site

advantages of the existing plant.
earlier.
The changes in the Industrial Policy of the

Government, favoring decentralisation and

The growth of the business makes it

dispersal of industries to achieve overall

advisable to establish additional facilities

development of the country, do not permit

in new territories. expansion of the existing plant.

 Factors Governing

Plant Location

1. Regional factors

2. Community factors

3. Site factors
Factors Governing

Plant Location
Regional factors decide the overall area (or region) within the

country. Such factors are : proximity to markets, proximity to sources

of raw materials, availability of utilities, transport facilities, climatic

condition, industrial and taxation laws, etc.

Community factors influence selection of the plant location within

the region. Such factors are : availability of labour, industrial and

labour attitudes, social structure, service facilities, etc

Site factors favour specific site within the community. Such factors

are : availability and cost of the land, suitability of the land, etc.
 Factors Impact Plant

Location
Proximity to market Safety requirements

Proximity to sources of raw materials Community facilities

Infrastructural facilities Community attitudes

Transport facilities Supporting industries and services

Labour and wages Waste Disposal

Legislation and taxation Availability and cost of the land

Climatic conditions Suitability of the land

Industrial and labour attitudes

Proximity to
Market
01 Every company is in business to market

and it can survive only if their product

02 The product is relatively

inexpensive and transportation

reaches the consumers on time and at

costs add significantly to the

the competitive price. The ratio of selling

cost
costs to sales generally increases with

distance. Therefore, in the choice of

03
location of the plant, the factor of
Nearness to market not only

“proximity to the market” is given the

lowers transportation costs but

highest priority.
also gives many other benefits.
Proximity to
Source of Raw
Materials
Since raw materials usually constitute 50 to

01 03
Time of receipt of materials is important

60 percent of the total product cost, it is

since inventory carrying costs rise pretty

important that the firm gets its requirements

high if lead time is large due to

of raw materials at the right time and at the

distance factors.
reasonable price for which the plant must be

located in the neighborhood of some source

which can meet the raw materials

requirement of the unit.

02 04
“Proximity to supply of raw materials” factor
Transportation cost is equally an

assumes still greater importance if raw

important factor to be given due

materials are of perishable nature or if they

weightage in matters of proximity to

are expensive to transport, or if their weight

sources of raw materials. Transportation

is substantially reduced by processing costs at times can be very large

 Infrastructural

Facilities
Infrastructural facilities consider
Certain industries, for example,

01 availability of utilities like power, water,

disposal of waste, etc. These form the

02 aluminium, steel, etc. are power

intensive and must be located close to

life-blood of many types of industries

the sites of power generation. Any

without which their activities may come

shortage of, or increase in cost of

to a stand still. Underestimating the

generating power may spell problems

need of any one of the utilities can be

for their survival.

extremely costly and inconvenient.

Similarly, chemical process industries like paper and pulp, cement, steel, sugar, laundries,

03 metal plating, food processing etc. require perennial source of water. Mineral content of
water may also be an important factor. Treatment of water is an expense to be
considered while comparing economics of different locations.
Transport

Facilities
The need for transport arises
because raw materials and fuel are
Transportation cost is one of the key
to be moved to factory site and
determinant of the plant location.
finished goods are to be transported
The structure of the transportation

01 03
from factory to markets. Other
cost depends on (i) characteristics
things being equal, since transport
of the commodity (ii) average
cost has a major effect on product
distance of shipment (iii) medium of
cost, the regions well served by
shipment: rail, road, air, sea.
transport facilities are most suitable
for industrial locations.
 Labour and

Wages
Availability of required labour locally is

01 02
Plant location should be such that

required labour is easily available in the

better since problem of arranging

neighborhood. Importing labour from

accommodation and other related

outside is usually costly and it causes lot

problems do not arise. Since normally

of administrative problems. workers with specific skills are

required, some sort of training facility

should also be available in the

neighborhood. Skilled employees are

easily available if ITIs, or Engineering

colleges are there in the neighborhood

03
Productivity of labour is a factor of equal importance. Inhabitants of certain areas are
more productive than others. Prevailing wage pattern, living costs and industrial relations
are other related factors which need to be taken into account.
Legislation

and Taxation
The policies of the State Government Exemption from excise duty, sales
01 and Local Bodies relating to issue of
licences, building codes, labour laws,
03 tax and octroi, soft loans from
financial institutions, subsidy in
etc. are the factors in selecting/ electricity charges, etc. are some of
rejecting a particular community/site. the incentives offered.
In order to disperse industries and Since taxes and duties levied by the

02 ensure balanced economic growth,

both Central and State government 04 State Government and Local Bodies
substantially influence product cost,
offer a package of incentives for the incidence of such taxes/levies
setting up industries in particular must be taken into account while
locations selecting a community/site
Climatic

Conditions

Climatic factors may not have a

However, it may be important

major influence these days

01 02
factor for certain industries
because of modern air

like textile mills which require

conditioning facilities available

high humidity.
today.
Industrial and

Labour

Attitudes
Community attitudes towards

supporting hostile trade union

Political situation in the state

activities is an important factor.

and attitude of the

Locating facilities in a certain

01 02
government towards labour

region/community may not be

activities also influences

desirable as frequent labour

selection of the site for the

problems and interruptions are

plant
harmful to the plant in the long

run.
Safety

Requirements

Safety factor may be important

for certain industries such as : Location of such industries

01 - nuclear power plants

- explosive factories
02 close to border areas is

undesirable
Community Facilities
Community facilities imply accommodation, educational, entertainment and

transport facilities
Accommodation is needed unless the employees are local residents.

Accommodation should be easily available, comparatively cheap and near some

public transport stop.

Communication is another important infrastructure without which no unit can run

efficiently. Availability of a post office and telegraphic office is a must. And without

efficient telephone service, no unit these days can even exist.

Availability of medical facility such as dispensary or a hospital in the neighborhood

is a must.
Educational facilities includes schools, colleges and institutions for technical

education at different levels and they should not be far out of the township
Community

Attitudes
Community attitudes towards

work (i.e. whether the people in

Locational decisions,

the location are hard working

therefore, must take such

01 02
or otherwise) as well as their

factors also into account

attitudes towards the incoming

particularly while setting up

entrepreneurs (helpful and co-

labour intensive units

operative or otherwise) can

make or mar an industry.

Supporting

Industries

and Service
Locational factors should also
Getting a job done from units

include proximity of services

located at far off places will

needed by the firm. A firm

mean not only additional

desirous of getting some or all

transportation cost but also

01 parts made from outside or

some of the operations done

02 time consuming and costly.

Also if units are too far off,

from outside must see that such

the control on quality of work

sub-contractors are located in

done by them can not be

the neighbourhood. exercised.

 Waste Disposal
Many Manufacturing Industries produce industrial wastes like contaminated

water, hazardous chemicals etc. Disposal of such waste is very critical problem

due to stringent norms set by state pollution control board and also it is not wise

to leave such waste without treatment. State Government agencies like industrial

development corporation, environment board may provide centralized waste

treatment plants at industrial areas, which can be beneficial for such type of

industry.

Availability of treatment and waste disposal facility is one of the important

considerations for locating such polluting industries

Availability

and Cost of

The Land
Site size (plot size) must be

large enough to accommodate

As a general rule, a site five
not only the present production times the actual plant size is

01 facilities, parking and access

facilities but also leave

02 considered minimum for all

these things including future

sufficient room for future

expansion.
expansion.
Suitability of

The Land

Though modern building

Site selection should also take

techniques can overcome the

into account topography and

limitations of the soil, but if

01 02
soil structure of the land. The

considerable improvement is

soil structure must be capable

required then selection of a

of bearing loads of

low cost land may ultimately

foundations.
turn out to be expensive.
Economic Survey for The
Site Selection
Step 1 : Prepare a list of all relevant factors.
Step 2 : Estimate expenses on materials, transport, wages, power etc. for each

location on each of the above factors.

Step 3 : Collect data on intangible factors like community facilities, community

attitudes etc.
Step 4 : Analyse the tangible data for each location and calculate rate of return on

investment.
Step 5 : Select provisionally a locational based on financial data.
Step 6 : Compare the intangible data for the different locations and select the

optimal location considering tangible and intangible data

 Examples of Plant Location in India
Most of the textile mills are found in or near Mumbai and Ahmedabad

because of the humidity conditions that prevail there

Steel plants are generally located near the Jharkhand, Bengal, Chhattisgarh

and Orissa regions. This choice of site is mainly because of more economical

transport of the finished goods as compared to basic raw materials.

Plants which manufacture cement; such plants are located near the lime and

the coal deposits.

Coal based fertilizer plants at Ramagundum are located near the source of

raw materials (coal)

oil based fertilizer plants at Mangalore, Madras, Cochin have been located

near ports, which act as a great source for the import of the raw materials
Information Technology/BPO/Software Industries depend largely on

availability of skilled personnel, infrastructure etc Because of these reasons

most of such organizations operate in urban areas such as Delhi, Chennai,

Hyderabad, Bangalore, Pune etc

 Summary
Plant location decisions are important Plant location depends on a large
strategic, long term and non-repetitive number of factors, some concern with
decisions. Poor location of the plant general territory selection whereas
results in higher cost of production, some factors are relevant for
difficult marketing and transportation, community selection and / or for site
dissatisfaction among the employees selection. Locational decisions should
and customers, frequent disturbances in also take into account the merits and
production, and even competitive demerits of urban, suburban and rural
disadvantage areas.
 Keywords

1 2
Pure Materials
Gross Materials

These are those

These are those

materials, which add

materials, which lose

their weight to the

weight in the process

finished product in the

of transformation into

process of manufacture. the finished goods.

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 About The Author
Mia Kusmiati, SE., MM., CT., MOS., MCE: She was born in Garut, on November 1979. As an
assistant professor at one of the Economics Colleges in West Java, namely STIE "Yasa Anggana"
Garut. Concernation on Operational Management Course. Currently active as a Writer and Editor.
She also has a competency certificate as a trainer from BNSP and international competency
certification is Microsoft Operation Specialist (MOS) dan Microsoft Certified Educator (MCE). In
carrying out the Tri Dharma of Higher Education in the field of book publication, she has published
books since 2020, including Entrepreneurship Development and Management with ISBN: 978-602-
50789-4-1, Kharisma Venti Rahmawati Jakarta Publisher. 2021 published the book Manajemen
Operasi dan Produksi with ISBN: 978-623-96026-2-8, the chapter book is Rute Jalan Tol
Pengusaha: Strategi Bisnis = The entrepreneur toll road routes: the business strategy with ISBN:
978-623-96383-2-0, and Proses Produksi Manufaktur with ISBN: 978-623-6387-43-6, publisher CV.
Aksara Global Akademia.
Sinta ID : 6699369
Orchid ID: 0000-0001-8295-1739
Google Scholar: https://scholar.google.com/citations?user=AO-ZVHAAAAAJ&hl=id
Email: [email protected]
No. Telpon: 081-2222-3230
Afiliasi: STIE YASA ANGGANA
 About The Author
Dr. Avinash Pawar, Ph.D., MBA., B.E.
Has completed PostDoc in Organisational Management, PhD in Business Management, MBA in Computers, HR, Production and
Marketing Management from University of Pune. He holds certification in Instruction Design, Customer Service, Psychological
Counseling, Digital Marketing, Competency Mapping, Reliability Management, Project Management, Six Sigma, Business
Intelligence and Knowledge Management Systems from reputed certification agencies and institutions. He is also an
Accredited Management Teacher and qualified with National Eligibility Test for Teaching and research in management.
In his career, Dr. Avinash was honoured with National Eminent Educator Award, Outstanding Performance in Research &
Education Award, Research Excellence Award, Early Career Researcher Award, Best Academician Award, Distinguished Faculty
Award, International Young Management Teacher Award and Best Teacher Award in Management from esteemed academic
organisations in India. He worked in reputed universities and business schools in India and associated with many academic
institutions across the world. Moreover, He is associated with Editorial Board Member for various reputed journals like Journal
of Promotion Management (USA), Journal of Corporate Governance Research (USA), Journal of Forex Press (USA), Journal of
Advancements in Business and Economics (Turkey), Research Horizon Journal ( Indonesia), Journal of Government, Politics &
Public Administration (Indonesia), International Journal of Nowadays and Future Jobs (Ukraine), Eastern European Business and
Economics Journal (Latvia), Akademika Nusa International (UAE), and Journal of Business Findings (Malaysia). He has also been
invited as a keynote speaker for international conferences in Indonesia, Malaysia, Vietnam, Ukraine, Singapore and India. He
has published more than 70 research papers in reputed journals indexed in Scopus, ABDC and ABS category. He has more than
15 books published till date on different areas of management in India, Indonesia, Germany and Australia.
Dr. Avinash is a distinguished professor, researcher and a philosopher in management.
Social Connect:
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 About The Editor
Dr. Budi Pramono, SIP., M.M., M.A., (GSC)., CIQar., CIQnR., MOS., MCE., CIMMR.
Born in Sidoarjo in 1967. He holds two Masters degrees, at Hull University UK in the Field of Security and Strategic Studies (1998) and
the University of National Development Veterans Jakarta (2005). When he was a colonel, he was awarded a doctorate degree in
Political Science with a very good predicate. After graduating from the Magelang Military Academy in 1988, he served in the
Indonesian Army Strategic Forces (KOSTRAD) for ten years, then took part in the intelligence world (BAIS).
The author has a lot of experience taking various Military Education courses, some of which are: Austfamil Course (SUSLAPA II-ART)
Australia (1996), National Security Intelligence Training Course in Taiwan (1999), Command and General Staff College, School of
General Staff and Command in Manila (2001), best graduate with awards (Honor Graduate): United Nations logistics Course at Port
Dickson (2002), Austfamil Course at Lavertoon Australia (2003), and Emergency Management in Australia, UN Military Observer
Course, Port Dickson (2004). In addition to being a frequent speaker at national and international conferences, as well as conducting
scientific research, the author has also been actively writing many books, including: "Transformation of Indonesia Counter-Terrorism"
(Terrorism and Disaster, Rajawali Pers, 2018), “The Role of Indonesia in Asean Security”, (Terrorism and Disaster, Rajawali Pers, 2018),
“Tanpa Senjata: Konsep dan Praktik Operasi Militer Selain Perang di Indonesia” (UNHAN Press, 2021, ISBN: 978-623-6610-26-8)),
“Monograph Indonesian Politics : Since it’s Birth Till The Reformation Era” (Aksara Global Akademia, 2021, ISBN: 978-623-96683-9-6
(PDF)), “Politics & National Defense” (Aksara Global Akademia, 2021, ISBN: 978-623-6387-00-9), “Pengukuran Kinerja Sumber Daya
Manusia: Teori dan Aplikasi” (Aksara Global Akademia, 2021, ISBN: 978-623-6387-01-6 (PDF)), “The revolution in Military Affairs (RMA),
and The Consequences for Indonesia: The Study Before the Reform Era” (Aksara Global Akademia, 2021, ISBN: 978-623-6387-05-4
(PDF)). Currently the author works as a Permanent Lecturer at the Republic of Indonesia Defense University and continues to take part
in carrying out the Tri Dharma of Higher Education.

Sinta ID : 6745514
Orchid ID: 0000-0002-5166-8516
Web of Science ResearcherID: GXF-3467-2022
Google Scholar: https://scholar.google.com/citations?user=8MON4rcAAAAJ&hl=id
Email: [email protected]
 About The Editor
Dr. Ir. Lukman Yudho Prakoso., S.IP., MAP.,CIQaR., IPU. Currently, he is the Department of Defense Economics
at the Indonesian Defense University. He is active as a writer and editor. Editor was born in Cirebon, July 1973,
Graduated from the Indonesian Navy Academy (AAL) as a Navy Officer with the rank of Second Lieutenant with
the Electronics Corps, with the qualification of Electronic Weapons in 1994 and Graduated from Seskoal Military
Education Force 47/ 2009. S1 education at the Open University Department of Administration State, Hang Tuah
University Masters Degree in Public Administration and Doctoral Degree from 17 August 1945 University
Administration in Surabaya. Assignment experiences include the Koatmatim Eskorta Ship Unit, Dishidroos
Satsurvey, TNI AL Headquarters Diskomlek, KRI Diponegoro-365-class Corvette Task Force - Disadal TNI AL,
Disenlek TNI AL Armament, Surabaya Naval Academy, MLM Task Force KRI Fatahila-361 - TNI AL AL, Center for
Research and Development Strahan-Balitbang Kemhan RI, Pokgadik Kodiklat TNI AL, LP3M-University of Defense
RI. The overseas assignments include: Goodwill Shipment of Kartika Mesh Krida to Australia, Comparative Study
to Malaysia, Manning of Communication Equipment in Nanjing China, Exocet MM40Block II, IFF, Spare Parts
Exocet Bloc III in France, Combat System in the Netherlands, Navigation System, in Germany, Inspector of Project
KFX/IFX in UK, Seminar on Maritime Security Singapore. Academic achievement in the best graduate of
Dikpafung II Hidroos 2002. His merits are: Loyalty VIII, XVI, XXIV Years and Jalsena Nararya. The books he has
published include: AHP SWOT Method, in Planning Defense Strategies (2021), The urgency of networking
transformation and the driver force of defense policy (2021), Implementation of Electrical Engineering Science in
the Defense and Military Sector (2021). Book Editor: Public Policy, Implementation of Models in Higher Education
(2021), A collection of monograph methods covering the implementation of problems in the management of the
KRI TNI AL as a patrol sector for Indonesian marine areas (2021), etc.