IntroductionIntroduction

The performance of an enterprise is The performance of an enterprise is considerably affected by its location.considerably affected by its location.

The degree of significance for the selection of The degree of significance for the selection of location for any enterprise mainly depends on location for any enterprise mainly depends on its size and nature. Sometimes the nature of its size and nature. Sometimes the nature of the product itself suggests some suitable the product itself suggests some suitable location like a small scale industry mainly location like a small scale industry mainly selects the site where in accordance with its selects the site where in accordance with its capacity the local mkt. for the product is capacity the local mkt. for the product is available.available.

Importance of Facility locationImportance of Facility location

Location of plant partially determines Location of plant partially determines operating and capital costs. It determines the operating and capital costs. It determines the nature of invt. Costs to be incurred and also nature of invt. Costs to be incurred and also the level of many operating costs.the level of many operating costs.

Each prospective location implies a new Each prospective location implies a new allocation of capacity to respective mkt. areaallocation of capacity to respective mkt. area

Govt. sometimes play an imp. Role in the Govt. sometimes play an imp. Role in the choice of the location keeping in view the choice of the location keeping in view the national benefits.national benefits.

Factors responsible for location Factors responsible for location choiceschoices

1.1. Availability of raw materialAvailability of raw material:-:-2.2. Nearness to the potential mktNearness to the potential mkt.:- mgt. can keep close .:- mgt. can keep close

touch with the changes in mkt. environment and touch with the changes in mkt. environment and formulate its prod’n policies accordinglyformulate its prod’n policies accordingly

3.3. Location shd. Be near to the source of operating Location shd. Be near to the source of operating requirementsrequirements;- like in some industries continuous ;- like in some industries continuous and adequate supply of power is of great significance and adequate supply of power is of great significance e.g.. Nylon fibre plant.e.g.. Nylon fibre plant.

4.4. Supply of labour:-Supply of labour:-5.5. Transport and communication facilities:-Transport and communication facilities:-6.6. Integration with other group of companies:-Integration with other group of companies:-7.7. Suitability of land and climate:- like damp climate is Suitability of land and climate:- like damp climate is

favorable for textile and cotton industries.favorable for textile and cotton industries.8.8. Availability of housing, other amenities and services. Availability of housing, other amenities and services.

9. Local building and planning regulations:- 9. Local building and planning regulations:- local regulations and byelaws.local regulations and byelaws.

10. Safety reqd’s:- industries like nuclear power 10. Safety reqd’s:- industries like nuclear power stations or chemical process likely to pollute stations or chemical process likely to pollute the atmosphere shd. Be located in remote the atmosphere shd. Be located in remote areas.areas.

Measures for the selection of Measures for the selection of locationlocation

1.1. Involving quantitative factors:-Involving quantitative factors:-

(a)(a) Comparative cost analysisComparative cost analysis

(b)(b) Break-even and dimensional analysis.Break-even and dimensional analysis.

2. Comparison of qualitative factors.2. Comparison of qualitative factors.

Plant LayoutPlant Layout

““Layout identically involves the allocation of Layout identically involves the allocation of space and the arrangement of equipment in space and the arrangement of equipment in such a manner that overall operating costs are such a manner that overall operating costs are minimized”.minimized”.

Plant layout is an effort to arrange machines and Plant layout is an effort to arrange machines and equipment, and other services within a equipment, and other services within a predesigned building-ensuring steady, smooth predesigned building-ensuring steady, smooth and economical flow of material.and economical flow of material.

Layout begins with plant location and Layout begins with plant location and continuous through three further levels continuous through three further levels namely:namely:

1.1. The layout of deptt. within the site.The layout of deptt. within the site.

2.2. Layout of items within the deptt.Layout of items within the deptt.

3.3. Layout of individual work places.Layout of individual work places.

Why layout problems existsWhy layout problems exists

Enlargement or contraction of existing deptt.Enlargement or contraction of existing deptt. Movement of a deptt. due to change in the Movement of a deptt. due to change in the

design of productdesign of product Addition of some new deptt. eg. Addition of some new deptt. eg.

ComputerizationComputerization Replacement or addition of some new Replacement or addition of some new

facility/machinery facility/machinery

Stages of plant layoutStages of plant layout

1.1. Product demand Product demand

2.2. Prod’n reqd.s.Prod’n reqd.s.

3.3. Components and parts analysisComponents and parts analysis

4.4. Work methods and measurementsWork methods and measurements

5.5. Machine reqd’sMachine reqd’s

6.6. Handling and movement reqd’s.Handling and movement reqd’s.

7.7. Space reqd.s.Space reqd.s.

Objectives of layoutObjectives of layout

1.1. Economies in materials, facilitate mfg process and Economies in materials, facilitate mfg process and handling of semi-finished goods.handling of semi-finished goods.

2.2. Proper and efficient utilization of available floor Proper and efficient utilization of available floor space .space .

3.3. To ensure that work proceeds from one point to To ensure that work proceeds from one point to another point inside the plant w/o any delay another point inside the plant w/o any delay

4.4. Provision of better supervision and ctrl of Provision of better supervision and ctrl of operations.operations.

5.5. Careful planning to avoid frequent changes in layout Careful planning to avoid frequent changes in layout which may result in undue increase in cost of prod’nwhich may result in undue increase in cost of prod’n

6.6. To provide adequate safety to the workers from To provide adequate safety to the workers from accidentsaccidents

7. To meet the quality and capacity reqd’s in the 7. To meet the quality and capacity reqd’s in the most economical manner.most economical manner.

8. Provision of medical facilities and cafetria at 8. Provision of medical facilities and cafetria at suitable and convenient placessuitable and convenient places

9. To provide efficient material handling system.9. To provide efficient material handling system.

10. To suggest improvements in prod’n process 10. To suggest improvements in prod’n process and work methods.and work methods.

Advantages of a good layoutAdvantages of a good layout

To the WorkerTo the Worker

1.1. Lesser number of operations and material handling.Lesser number of operations and material handling.

2.2. Reduction in length of hauls and motions b/w Reduction in length of hauls and motions b/w operations minimizes prod’n time as well as the operations minimizes prod’n time as well as the activities of workers .activities of workers .

3.3. More Labour productivity i.e. more output per man-More Labour productivity i.e. more output per man-hour i.e. low work in progress and high turnover.hour i.e. low work in progress and high turnover.

4.4. More safety and security to workers from accidents.More safety and security to workers from accidents.

5.5. Better working conditions resulting improved Better working conditions resulting improved efficiency.efficiency.

In Manufacturing CostsIn Manufacturing Costs

Maintenance and replacement costs are Maintenance and replacement costs are reduced.reduced.

Loss due to waste and spoilage is minised.Loss due to waste and spoilage is minised. Improved quality of product with reduction in Improved quality of product with reduction in

handling i.e. movement, time and cost.handling i.e. movement, time and cost. Better cost control.Better cost control.

In prod’n ctrl and supervisionIn prod’n ctrl and supervision

1.1. Provides more space for prod’n operations.Provides more space for prod’n operations.2.2. Ctrl and supervision operations are provided Ctrl and supervision operations are provided

at appropriate pointsat appropriate points3.3. Better and convenient storage facilities.Better and convenient storage facilities.4.4. Efficient arrangement for receipt, tpt’n and Efficient arrangement for receipt, tpt’n and

delivery of raw material and finished goods.delivery of raw material and finished goods.5.5. Results in less inspection activity.Results in less inspection activity.6.6. Cost and effort in the supervision of prd’n Cost and effort in the supervision of prd’n

process are minimized.process are minimized.

A good layout leads to efficient and optimum A good layout leads to efficient and optimum use of machines labour and capital by use of machines labour and capital by minimizing per unit prod’n time and minimizing per unit prod’n time and maintaining a proper balance b/w various maintaining a proper balance b/w various prod’n deptt. this leads to reduction in capital prod’n deptt. this leads to reduction in capital invt. There is effective utilisation of floor invt. There is effective utilisation of floor space facilitating operations, maintenance, space facilitating operations, maintenance, service and supervisionservice and supervision

Types of layoutTypes of layout

Line of product layoutLine of product layout:- The position and :- The position and order in the sequence for a machine order in the sequence for a machine performing particular operation is fixed. performing particular operation is fixed. Once a machine is in line, it cannot perform Once a machine is in line, it cannot perform any operation , which is not designated in any operation , which is not designated in the sequence of operations. There is a the sequence of operations. There is a continuous flow of material during the continuous flow of material during the prod’n process from start to finish.prod’n process from start to finish.

AdvantagesAdvantages

1.1. Ensures smooth and regular flow of material and finished Ensures smooth and regular flow of material and finished goods.goods.

2.2. Provides economy in materials and labour by minimizing Provides economy in materials and labour by minimizing waster.waster.

3.3. Short processing time.Short processing time.4.4. Reduces material handling.Reduces material handling.5.5. Low cost labour procurement and lesser training reqd’s.Low cost labour procurement and lesser training reqd’s.6.6. Lesser Inspection.Lesser Inspection.7.7. Floor area is more prod’nFloor area is more prod’n8.8. Easy prod’n ctrl.Easy prod’n ctrl.9.9. Minimum need for buffer stock.Minimum need for buffer stock.

DisadvantagesDisadvantages

1.1. Product layout is inflexible in nature.Product layout is inflexible in nature.

2.2. Chances of prod’n line to shut down.Chances of prod’n line to shut down.

3.3. Supervision is more difficult.Supervision is more difficult.

4.4. Requires heavy capital invt.Requires heavy capital invt.

Functional or process layoutFunctional or process layout

Here machines performing same type of Here machines performing same type of operations are installed at one place .i.e. plant operations are installed at one place .i.e. plant is grouped according to functions e.g. all is grouped according to functions e.g. all drilling machines are located at one place drilling machines are located at one place known as drilling section. This type of layout known as drilling section. This type of layout is most appropriate for intermittent (JOB and is most appropriate for intermittent (JOB and BATCH ) type of mfg systems where small BATCH ) type of mfg systems where small qty’s of a large range of products are to be qty’s of a large range of products are to be mfg’d e.g. machine tools etc.mfg’d e.g. machine tools etc.

AdvantagesAdvantages1.1. Each prod’n unit of the system works independently Each prod’n unit of the system works independently

and is not affected by the happenings in another and is not affected by the happenings in another section of the plant.section of the plant.

2.2. Scope for more skilled labour leads to better quality Scope for more skilled labour leads to better quality in prod’n.in prod’n.

3.3. Wide flexibility in prod’n facilities.Wide flexibility in prod’n facilities.

4.4. Effective supervision.Effective supervision.

5.5. Machine breakdown doesn’t disrupt prod’n.Machine breakdown doesn’t disrupt prod’n.

6.6. Lower capital invt. (less duplication of machines).Lower capital invt. (less duplication of machines).

DisadvantagesDisadvantages

1.1. More material handling.More material handling.

2.2. Longer processing time:- as more time s reqd Longer processing time:- as more time s reqd for material handling, tpt n inspection..for material handling, tpt n inspection..

3.3. Requires substantial prod’n planning and ctrl.Requires substantial prod’n planning and ctrl.

4.4. Requires more floor space.Requires more floor space.

5.5. Inspection s more frequent n costlier.Inspection s more frequent n costlier.

6.6. Requires highly skilled labour creating Requires highly skilled labour creating difficulty in labour procurement.difficulty in labour procurement.

Stationary layoutStationary layout This type of layout is used in situations where This type of layout is used in situations where

the semi finished goods are of such a size and the semi finished goods are of such a size and weight that their movement from one place to weight that their movement from one place to the other is not possible. Here men, equipment the other is not possible. Here men, equipment and the raw-material is moved to a place and the raw-material is moved to a place where all the mfg activities are carried out e.g. where all the mfg activities are carried out e.g. Ship building, constructions of dams etc..Ship building, constructions of dams etc..