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8/7/2019 Industrial Location Analysis
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8/7/2019 Industrial Location Analysis
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Location of an industry is an important management
decision. It is a two-step decision: first, choice of general
area or region and second, the choice of site within the
area selected. Location decision is based on theorganizations long-term strategies such as technological,
marketing, resource availability and financial strategies.
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` The general location of the plant.
` The selection of a particular site.
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Availability of Raw Materials
Proximity of Markets
Tra s ort Fa ility
Availability of Effi ie t a d Chea Labour.
Availability of Power a d Fuel
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Climatic and Atmospheric Conditions
Availability of Water
Availability of Capital
Social and Recreational acilities
Business and Commercial acilities
Existence of Related Industries
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Community Attitude
Community acilities
Transportation acilities
Topography
Waste disposal
Ecology and Pollution
Size of land
Supporting Industries
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` Raw material procurement
` Proximity of market
` Availability of labour, their training and
compensation.` Availability of power.
` Availability of finance.
` Miscellaneous considerations like donations,
subsidies, taxes and non-interference bygovernment or local bodies, war and political
effects and other facilities or bottle mecks.
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Ser i e
Steam Gas Water Air or High pressure Electricity Sewerage
Special manufacturing requirement
Other manufacturing equipments
Manufacturing Machinery
Production processContinuous Intermittent Interrupted
ProductNature Volume Value
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Productivity
Productivity is nothing both the reduction in wastage of
resources. The resources may be men, machines,
materials, power, space, time, building etc.
It may also be defined as human efforts to produce more
and more with less and less inputs of resources as a
result of which the benefits of production may be
distributed more equally among maximum number of
people.
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A) Internal actors
B) External actors
A) Internal actorsi. National resources and their mobility.
ii. Availability of capital
iii. Taxation
iv. Govt. laws and restrictions concerning business.
v. Extent of market competition.
vi. Technical and other training facilities.
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Factors affecting productivityFactors affecting productivity
B) External actors
i. Plant Layout
ii. Material Handling
iii. Product design: R&D, simplification,
standardization etc.
iv. Work study
v. Machinery and equipment
vi. Quality controlvii.Management techniques including- Human
Resource Management.
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Reasons for Low-Productivity
requent machine break downs
Absence of managerial control
Idle men
PoorqualityConfusion in machine scheduling
Storage of materials
Excess inventory
Large quantities of reworked material
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How to Increase Productivity
Wastage of Materials
Machine breakdown
Waiting on the part of men and equipment
Excessive handling
Poor management
Poor working conditions
Political effects
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Productivity in Various Concerns
Labour Productivity
Material Productivity
Machine Productivity
Selling, Distribution orAdmin Productivity
Overall Productivity
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Main Contributors To Productivity
ImprovementIncentives
Human Relations
Cost Control
Training about Productivity
Application of New Technology
Proper Planning and SchedulingDesign the Product
Management Skill
Standardization and work simplification
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Benefits rom Increased Productivity
A) Benefit to Concern:-
I. More Profit
II. Higher productivity ensures stability of the concern
III. Higher productivity and higher volume of sales
provides opportunity for expansion of the concern
and wide spread market.
IV.It provides over all prosperity and reputation of the
concern.
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Benefits rom Increased Productivity
B) Benefit to Workers:
i. Higher productivity permits more wages.
ii. More wages permit better standard of living of
workers.
iii. Thus more productivity means better workingconditions for workers which also help in
maintaining better health for workers.
iv. Higher productivity yields improved moral and
greater satisfaction for workers.
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Benefits rom Increased Productivity
C) Benefit to Consumers:
i. More productivity ensures betterquality of product.
ii. It also enables reduction in prices.iii. It provides more satisfaction to consumers.
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Benefits rom Increased Productivity
D) Benefit to Nation:
i. It provides greater national wealth
ii. It increases per capital income.
iii. It helps expansion of international market with thehelp of standardized and good quality goods.
iv. It improves standard of living.
v. It helps in better utilization of resources of the
nation.
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Automation
Continuous Automation
Segmented Automation
Non-ManufacturingAutomation
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Advantages ofAutomation:1. Grater output per rupee of labour.
2. More output per rupee invested in facilities.3. Lesser floor space is required.
4. Increased safety for operators.
5. Automatic production schedules.
6. Increased uniform quality.
7. It transfers skill knowledge and efforts from man tomachine, therefore, high rate of production.
8. Less scrap.
9. Less inventories.
10.It requires very less expert staff, rest semi-skilledworkers.
11.It is beneficial to the general public, as it raises the
income of individuals.
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Disadvantages ofAutomation
1. Greater capital investment.
2. Less manufacturing flexibility.
3. During less demand the management cannot use the
automated plant for any other purpose.
4. The immediate effect of automation is increasedunemployment.
5. Expensive down time, as the failure of one part may
result in the shut down of the whole line where
automation is there.
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Suitabilityi. Where a product design is stable for such a long period in
which the cost of automation can be written off.ii. Where the volume for continuous manufacture is adequate
and steady for a fairly long time so as to make the
installation economical, profitable and to permit the use of
single purpose equipment.
iii. Where the manufacturing method demands a high degreeof manual work, and adoption of automation presents
attractive cost saving potential.
iv. Where the machines are so complex or work at such a
high speed, that it is not possible to work with efficiency by
manual methods.v. Where the product is so hazardous that it cannot possibly
be controlled by manual methods, e.g.. Radioactive
materials.
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