Plant Location

Plant Location is the right location for the

manufacturing facility, it will have sufficient access to
the customers, workers, transportation, etc. For
commercial success, and competitive advantage
following are the critical factors
Overall objective of an organization is to satisfy and
delight customers with its product and services.
Therefore, for an organization it becomes important to
have strategy formulated around its manufacturing
unit.
 Plant Location
A manufacturing unit is the place where all inputs such
as raw material, equipment, skilled labors, etc. come
together and manufacture products for customers. One
of the most critical factors determining the success of
the manufacturing unit is the location.
Plant location decisions are strategic, long term and
non-repetitive in nature. Without sound and careful
location planning in the beginning itself, the new
facility may pose continuous operating disadvantages,
for the future operation.
 Plant Location
A right selection of a plant location can make and a
wrong decision for an organization. Location decision
are affected by many factors such as technology used,
the capacity, the financial position, the work force
required and also by economic, political and social
conditions in the various localities.
The efficiency, effectiveness, productivity and
profitability of the facility are also affected by the
location decision. The facilities location problem is
concerned primarily with the best location depending
on the appropriate criteria of effectiveness.
 Factors affecting Plant Location
 INPUT CONSIDERATIONS
 Material- Quantity, quality, cost and regular supply.
 Land- Site availability and cost, cost of construction, constructional
regulations.
 Equipment- Cost and availability.
 Plant utilities- Water, electricity, gas, coal etc.
 Labor- Availability, skill, wage rates etc.
 PROCESSING CONSIDERATIONS
 Production analysis
 Process analysis
 Forecasting and scheduling
 Production control
 Maintenance
 Cost control
 Factors affecting Plant Location
 OUTPUT CONSIDERATIONS
 Distribution- Distribution and storage facilities
 Transportation- Facilities and cost
 Present and future market potential
 Local rates
 Local taxes
 OTHER CONSIDERATIONS
 Community attitude towards industry and company
 Public and community services
 Stockholder interests
 Organizational decentralization policies.
 Political situation
 Environmental standards
 Factors affecting Plant Location
 OUTPUT CONSIDERATIONS
 Distribution- Distribution and storage facilities
 Transportation- Facilities and cost
 Present and future market potential
 Local rates
 Local taxes
 OTHER CONSIDERATIONS
 Community attitude towards industry and company
 Public and community services
 Stockholder interests
 Organizational decentralization policies.
 Political situation
 Environmental standards
Plant Location
Plant Location
 Plant Layout
Layout refers to the arrangement of facilities in a
particular workstation. It may be plant layout, office
layout, auditorium layout etc.
Plant Layout implies the physical arrangement of
machines, equipment and other industrial facilities on the
factory floor in such a manner that they may be handled
efficiently.
Plant layout refers to the arrangement of physical facilities
such as machinery, equipment, furniture etc. with in the
factory building in such a manner so as to have quickest
flow of material at the lowest cost and with the least
amount of handling in processing the product from the
receipt of material to the shipment of the finished product.
 Plant Layout
 Layout is a Fundamental of every organization and
enterprise.
 Kitchen, Retailers, offices, service organization and all the
enterprises have a specific layout.
 Previously Layouts were based on intuition, experience and
judgment.
 With the complexities and competition now scientific
methods are used.
 The Layout comes in picture after the location has been
finalized.
 Development of good layout depends on decisions already
taken on location, capacity, facility, manufacturing method
and material handling techniques.
 Principle of Plant Layout
 Principle of Overall Integration:
All the plant facilities are integrated one single operating
unit considering all the servicing necessary for operations.
 Principle of Minimum Distance Moved:
Attempts are made to minimize the movements as far as
possible. However, the principle of overall integration
should be considered while planning for the minimum
distance moved.
 Principle of Flow:
A layout must arrange the work areas as far as possible, in
the same way as the sequence of operations or processes.
The basic idea is to move the work towards completion
progressively without interference of backtracking with a
minimum of interruption or congestion.
 Principle of Plant Layout
Principle of Cubic Space:
Economy is obtained by using effectively available
space- both vertical and horizontal.
Principle of Satisfaction and Safety:
Satisfaction of working people is an important factor
to be kept in mind. Similarly due consideration must
be given to safely requirements.
Principle of Flexibility:
The layout must be sufficiently flexible to take care of
the necessity of rearranging the production facilities,
when the need comes.