MM ZG511-L12

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BITS PilaniPilani Campus

Manufacturing Organization

and Management

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BITS PilaniPilani Campus

Physical FacilitiesLecture 12

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BITS Pilani, Pilani Campus

• The many manufacturing establishment that dot our

countryside are not something that sprang up overnight,

but represent the culmination of many labor hours of

planning.

• Countless decisions, such as the products to be madein the plant, the equipment required, the type of

structure needed, and the location of the plant, had to

be made before the ground could be broken to build the

plant.

Introduction

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• The immensity of the plant location problem is attested to

by the fact that billions of dollars are spent each year on

new manufacturing buildings in the United States, not to

mention the ever-increasing investment in foreign

subsidiaries.• For each of these plants, someone had to make a decision

as to where to put it, and many plants have ended up in

somewhat surprising locations.

• Indeed, the widespread dispersion of our factories hasdone much to alter the industrial landscape.

Plant Location

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• Three situations require an answer to the question of plantlocations:

1. A new plant just being started.

2. A new branch of an existing plant, or

3. A new location for an existing plant.

• Analysis of the reasons why many companies were started intheir present locations will reveal that they were located in thecommunity that was the home of the founder.

• For example, one the country’s leading fountain pencompanies was started in a Midwestern city because thefounder owned a jewelry store in that community, and aprominent pharmaceutical company was started in its presentlocation by a former druggist in that city.

Plant Location

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• Before a location for a plant is sought, long-rangeforecasts should be made anticipating the future needsof the company.

• These should be based on the company’s expansion

policy, the anticipated diversification of products, thechanging market, the changing source of raw materials,and any other foreseeable influences.

• Careful attention should be given to all the economicfactors that influence the need for the new plant and the

size and location of the plant.• The use of such forecasting techniques as linear and

exponential regression are not uncommon.

Location Planning

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• One large company follows seven basic steps inlocating and building every new plant:

1. Establish the need for a new plant.

2. Determine the best geographical area for the plant on

the basis of the company’s business needs. 3. Establish the requirements (i.e. product to be made,

equipment and buildings needed, utilities and

transportation necessary, number of employees, etc.)

4. Screen many communities within the general area

decided on

5. Pinpoint a few communities for detained studies.

6. Select the best location.

7. Build the plant.

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• If one was to conduct a survey on why companies havechosen their present plant location, many reasons wouldbe cited: Proximity to a good highway network,

Abundant labor supply,

Proximity to markets, Adequate water supply, and so on.

• How important each factor is will vary from onecompany to another.

Factors Influencing Location

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Prox imi ty to good h ighways :• In one survey of 4100 firms, the most frequent factor that

prompted the companies to build where they did was thequality of the highway system, particularly its relationship tomarkets, raw materials and labor supply.

• The existence of excellent highways, such as the interstatesuperhighways, makes the suburbs, small communities, andcountry as readily accessible as the cities.

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Access to a Major Airpo rt : Very few firms can function in a national market place without

using air transportation in one form or another.

Some firms have their own aircraft, so a small regional airportwould be of value.

Labor supply : Obviously a company cannot operate without employees, and

the nature of the labor market should be investigated to ensurethat an adequate supply of qualified employees is available inthe area.

It is necessary to some organizations that skilled craftsmen be

hired to fill many of the positions, and it is desirable to locate theplant in an area where a sufficient number are available.

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Nearness to Market: The cost of and time required for, transporting the product to the

customer is a major consideration for many companies.

For this reason it is desirable that the company be located near thecenter of its market.

Nearness to raw m ater ia ls :

Companies using bulky or perishable materials find its desirable to benear a readily available source of their materials.

The food industry has this problem with its canning factories,meatpacking plants, and creameries.

Other examples include steel mills, saw mills, paper mills, and cementmanufacturers.

In these industries, the guiding principle is what the economists refer toas “weight losing”.

If the raw material loses a lot of weight in processing, then the plantshould be located near the source of raw materials.

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Nearness to an exist ing plant : Often, one of the principal an factors in the location of a new

branch plant is that of keeping it reasonably close to the parentplant.

Several years ago the National Industries Conference Boardfound in a survey of 476 new plant locations that the sites werechosen in 42% of the cases of the cases because they werenear an existing plant or warehouse.

That so high a percentage would select sites for this reason inan area where executive supervision and staff consultations willbe facilitated.

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Avai labi l i ty of Land and Land Costs :The cost of land is usually a minor factor in the choice

of a location.

However, the availability of an adequate sitesometimes presents a problem.

In communities that are interested in attracting newindustries, land may be offered at a considerablyreduced price or at no cost, and this may influencesome companies to locate there.

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Transportat ion : The company should be located in an area where adequate

transportation facilities of the desired type are available.

Some companies find it desirable to be located at an oceanport or on the inland waterways to take advantage of thelower cost of transporting materials by boat or barge.

This is particularly true for bulk materials such as coal, ironore and petroleum products.

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Water Supply : For those companies requiring large quantities of water in

processing their products, the water supply must be givenserious attention in choosing a plant location.

This was a major consideration in locating a plant of apharmaceutical company requiring tremendous quantities of

water. The underground supply of water is gradually being depleted in

some areas and presents a matter of critical importance to thecompanies already situated there.

Consideration should be given to any pollution of the water,which might cause processing difficulties.

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Power Supply :Every company has need for electric power, but only

to those companies using tremendous quantities isthis items of major importance in choosing the plantsite.

An adequate supply of power at low rates is availablein most areas: seldom is it necessary for the companyto develop its own.

However, some companies prefer to maintain a powerstation in a standby condition to take care of any

emergencies that may arise.

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Pol lut ion Contro l :During recent years, there has been a wave of public

sentiment in regard to pollution control.

This led to the establishment of the FederalEnvironmental Protection Agency and the setting ofdeadlines on air and water controls to protect thepublic health.

The combination of new laws and social pressure hashad great impact on many companies, particularly theheavily polluting industries (e.g. public utilities, steel,

oil, paper, chemicals)

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Taxes : The kinds and amounts of taxes levied by a state

or community should be considered in locating aplant.

Taxes become one of the operating costs; thekinds of taxes and the basis for fixing them shouldbe thoroughly investigated.

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Climate :

Seldom does the climate influence the location of aplant.

In those companies requiring controlled temperature,

humidity, and ventilation, it is possible to installequipment to maintain the required conditions.

Sometimes the personal preferences of the companyexecutives who will be working in the plant influencethe location of a plant in a particular climate.

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Commun i ty Adm inis t rat ion and At t i tude:

Since all industries have social responsibility to thecommunities in which they are located, it is importantthat the local authorities and the populace of the

community be eager to have the plant located there. It is also essential that the community be able to

provide the necessary municipal services in the wayof police and fire protection, maintenance of streets,refuse disposal and so on.

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After the community for a plant has been selected, theproblem still exists of selecting the exact site on whichthe plant is to be built.

The final choice of site will usually result fromconsidering the relative merits of each of the available

sites. In weighing these sites against one another, thefollowing questions, should be asked about each ofthe factors that should be considered.

Local Sites

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Transpor tat ion Faci l i t ies : Is the location easily accessibly to the main

highways?

Are the railroad facilities adequate to ensure promptreceipt and shipment of goods?

Can a railroad siding be made available? Are airports available?

Avai labi l i ty of water electr ic power, gas, andsewers :

Is water available in sufficient quantities? Is adequate electric power available?

Is adequate gas available?

Is the sewer system adequate to take care of theplant’s needs?

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Zoning restr ict ions : Will the zoning restrictions interferewith the company’s building plans or operations?

Soi l Character ist ics : Are the soil bearing characteristicssuitable for supporting the building and equipment? Willthe soil provide adequate drainage?

Drainage : Will the area drain away all surface water sothat the buildings will not become an island in the middleof a flooded area?

Parking areas : Is adequate space available to provide foremployee and visitor parking?

Space for Expansion : Is sufficient space available to takecare of expansion of the plant within the foreseeablefuture?

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Access ib i li ty by Workers :Can the site be reached by public transportation?

Is the road and street network leading to the siteadequate to allow speedy entrance and exit ofemployees during rush periods?

Cost of Land Can the site be secured at a reasonableprice?

Exis t ing bui ld ings:

Are existing buildings available that might be suitable

for the company’s operation, and can they be rentedor purchased at reasonable price?

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Evaluation of Plant Locations: It is very difficult to make a final decision as to the

choice for a plant location.

One location may have the advantage form a marketstandpoint, another may be closer to the materials

supply, and a third may provide a better labor supply. In attempting to weigh these and other factors against

one another, two methods are commonly used; ratingplans and cost analyses.

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Rating Plan : In the rating Plan, weights are assigned to each of the

factor that should be considered.

The factor deemed most important is given thehighest weight. And each of the other factors a lesser

amount.For example, nearness to raw materials might be

weighted at 400 points, nearness to market at 300,the labor supply at 275, and the other factors at lesseramounts.

The total number of points for each of the alternativelocation is determined and is used to assist in makinga decision. In most cases this rating should besupplemented with a cost analysis.

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Cost Analys is : As an aid in evaluating alternative plant location,

estimates should be made for all costs entering into theoperation of the plant in each of the locations.

These estimates should cover the initial cost of thephysical facilities, the cost of raw materials, the cost ofmanufacture, and the cost of distribution.

After the determination of each of these costs, the unitcost for manufacturing the product in each of the

locations can be reckoned and may be used to aid indeciding on the optimum location.

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• There has been a definite trend in the location of industrial plants.• More and more companies have been decentralizing their

operations and locating plants in small towns or suburban areas – particularly the large companies that require extensive space forbuildings, parking lots, and other facilities.

• Also, many companies have chosen local sites that are in the

country.• This has allowed them to secure ample space and freed them from

paying the higher tax rate usually found in the city.

• Often a number of advantages can be gained by locating a plant in asmall town.

• Inexpensive building sites with ample space for expansion are

usually available, and the community will probably welcome theincreased revenue the company will bring into the area; a friendlyatmosphere should prevail.

• In addition, labor is commonly available at a lower rate than in cities,more harmonious relations with the workers may be possible, andhigher productivity may be attained.

Trends in Plant Location

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• When the company has chosen the community in which it willlocate, consideration must be given to providing physical facilities.

• If the company is small, it may be able to rent or buy and existingbuilding.

• Seldom, however, will a company requiring extensive space be ableto find suitable facilities available for rent or purchase.

• This necessitates, then, the design and construction of newbuildings.

• In planning a building for the manufacturing facilities, a number offactors must be given consideration, including

1. Nature of the manufacturing process

2. Plant layout and space requirements

3. Lighting, heating, ventilating, and air conditioning.

4. Service facilities

5. Future expansion

6. Appearance.

Plant Buildings

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Nature of Manufactur in g Proc ess :• One of the chief determinants of the kind of building required

will be the type of manufacturing process.

• The various machines and equipment used in themanufacture of steel plate, glass bottles, rubber tires, metal

castings, food products, and other items dictate the type ofbuilding to be constructed.

Plant Layout and Space Requ irements:

• All the factors influencing the internal arrangement of amanufacturing plant.

• Suffice it to say at this point that the location of the machines,service centers, and offices, the size of the bays required, andthe degree of flexibility desired all will have considerableinfluence on the kind of building created.

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Service Facil i t i es:

In addition to the heating, ventilating, and air-conditioningfacilities, many companies maintain other service facilities,such as firefighting equipment, incinerators, sewage treatingsystems, emergency power equipment, cooling towers, andcompressed air equipment.

Future Expansion :

The expansion of industry has made management aware ofthe importance of planning for future expansion.

Appearance:

Appearance is being given considerable attention in choosingthe style of architecture and building materials for modern

plants.

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Sing le Versus Mult istory Bu i ld ings :In planning factory buildings, the advantages of single-story versusmultistory arrangements must be weighed and that type of building selectedthat will best meet the needs of the company.

The advantages of the single-story building are as follows:1. Low construction cost per square foot of space,

2. Requires less time to erect,3. Easy to expand,

4. Will take high floor loads,

5. Suitable for assembly of heavy or bulky products,

6. Allows high ceilings,

7. No space lost for elevators and stairs,

8. Fewer columns,

9. Easier to handle materials,10.Allows flexibility in layout,

11.Rest rooms and service equipment may be located in overhead trusses,

12.Maximum use of daylight and natural ventilation is possible,

13.Easier to isolate obnoxious or hazardous areas,

14.Easier supervision

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Advantages of the multistory building are:1.Requires less land,

2.Allows use of gravity for materials and movement,

3.Allows more compact layouts,

4.Allows vertical arrangement of production and storagespace,

5.Lower heating cost,

6.Top stories may be used for departments requiringspecial conditions

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• The trend appears to be to build a single-story plantconnected to a single-or multi-story office located in aspacious area.

• Plants are being located on large tracts of land to allowspace for parking costs and future expansion.

• Increased use is being made of rigid or semi rigidframes; the size of structural members is therebyreduced and framing problems are simplified.

• Increased use is also being made of the overhead spaceamong the roof supporting members as an area in which

to locate service equipment.• This space is accessible for installation andmaintenance.

Trends in Building Construction

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Plant layout is a plan of the most effective arrangement of the physicalfacilities and personnel for the manufacture of the product.

Plant layout, often referred to as facilities design, encompasses muchmore than the mere planning of the arrangement of the productionequipment and should include a careful study of the following:

1. External transportation facilities.

2. Receiving operations (unloading, inspection, stores)3. Production activities

4. Materials handling.

5. Service and auxiliary operations

6. Quality Control and inspection areas

7. Packaging operations8. Storage operations

9. Shipping operations

10.Offices

Plant Layout

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4. Maintain high turnover of work-in-process.5. Hold down investment in equipment.

6. Make economical use of building cube.

7. Promote effective utilization of personnel.

8. Provide for employee convenience, safety, and comfort in doing thework.

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Many of the basic factors that affect the design of the product, thedesign of the manufacturing process, the selection of tools andequipment, and the planning for materials handling carry over toinfluence the plant layout. We discuss some of these in thefollowing.

Product : The type of product affects plant layout in many ways.

Large and heavy equipment requires assembly bays. Also in thesecases it is often more economical to move personnel and machinesto the product than it is to move the product to the work area.

Volume or rate of product ion: This is a key factor in allmanufacturing planning. In plant layout it is reflected in the total sizeof the operation to be planned as well as being the principal factor inthe determination of the type of manufacture to be employed.

Qual ity : The meaning of quality requirements in a product can beaided through effective plant layout. Soundproof rooms, cleanrooms, and air-conditioned factories are often needed to meetproduct specifications.

Factors affecting Plant Layout

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Equipment: Adequate space must be provided for allequipments-manufacturing, materials handling, and

service.

Type of manufacture: It is obvious that a plant laid out

for a continuous manufacturing process will be quite

different from a factory operating as an intermittent plant.

Building ideally, a building should be built to suit the best

plant layout. Adapting a factory layout to an old building

presents a significant challenge to the plant layout

engineer. Building: A building should be built to suit the best plant

layout. All proposal for modification of existing structure

must be economically justified.

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Plant Site: The plant site is the connecting link betweenthe factory and the surrounding community. Servicessuch as railroad sidings, highways, and utilities mayeasily affect not only the positioning of the building onthe plant but the internal arrangement of thedepartments as well.

Personnel: Comfort and safety of personnel mustalways be carefully considered when laying out a plant. Asingle operation, or workstation, may within its ownboundaries be safe yet endanger other workers in thegeneral area.

Materials Handling Plant : Basic to economicalproduction is good materials flow and a soundlyconceived materials handling system. Since materialshandling is the selection on which the plant layout fits, itis inseparably ties in with the layout function.

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The basic plans are the process layout, the product layout, and thegroup layout. Selection of the basic plan to be used depends on manyfactors

Process Layout: In a process layout the type and operational characteristics

of the manufacturing equipment are the determining

factors in the arrangement of the factory. This basic plan can be readily identified; as such plants will

have machine departments, heat-treating departments,finishing rooms, and assembly floors.

The product is fabricated by moving it from department to

department according to the sequence of operations to beperformed on it.

It is thought as general purpose type of layout thatprovides for great flexibility in output, design of productand methods of fabrication.

The Basic Plans for Plant Layout

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This type of layout may be thought to lead to thefollowing operations:1. Need for a skilled labor force capable of doing a variety of operations on a

machine.

2. Many production orders in process at anytime.

3. Frequent movement of material between operations and departments.4. Extensive storage space in departments for unprocessed materials.

5. Considerable storage space around machines.

6. High inventories of in-process materials.

7. General purpose materials handling equipment.

8. Much scheduling and careful control of material in process

9. Lack of mechanical pacing of work.

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Product Layout : In product layout the work to be performed on the

product is the determining factor in the positioning ofmanufacturing equipment.

The aim is to arrange machines, regardless of type, in

the order of the operations that are performed on themany component parts, on subassemblies, and onthe final assembly of the item being manufactured.

The product layout is associated with massproduction or continuous manufacturing.

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Characteristic of product layout: Conveyorized movement of materials.

Relatively small in-process inventory of parts.

Mechanical pacing either partially or completely of movement.

Semiskilled operators.

The utilization of highly specialized machines jigs, and fixtures. Little need for detailed scheduling of production control.

Integration of inspection points into line.

High investment in specialized machines having little flexibility

Process layout is associated to intermittent

manufacturing.

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Group Layout : A group layout is one for which some of the

advantages of a product layout are achieved forrelatively low production volumes.

A group layout can consist of several mini product

lines, one devoted to each family.Burbidge has developed a procedure, calledprod uct ion f low analysis (PFA) , which enables ananalyst to group parts into families which can beeffectively manufactured in a group layoutconfiguration.

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As in most industrial activities, there is a logical approach to theplant layout problem. First, let us list the steps briefly, and thendiscuss each in detail. In solving a plant layout problem:

1. Accumulate all the basic data that will be needed.

2. Analyze and coordinate these basic data.

3. Determine a general flow pattern for the materials in process

4. Design the individual workstations or production centers.5. “Assemble” the individual layouts into the total layout in accordance

with the general flow pattern and the building facilities.

6. Coordinate this plan with the plan for the handling of materials.

7. Complete the plant layout.

8. Prepare an appropriation request indicating the funds needed and justifying the expenditure of these funds.

9. Convert the plant layout into floor plans that can be used by theplant engineer in the location and installation of the equipment.

Plant Layout Procedure

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Types of Layouts : Three principal types of plant layoutmodeling procedures and materials find use in modern

industry: block layouts, two – dimensional transparent

template layouts and three-dimensional model layouts.

Block Layouts: The spine layout is also a block layout.This type of layout is often prepared to a scale of 1/8

inch equals 1 foot. It is constructed, using material flow

and other basic data, to establish the basic configuration

of the facility.

Layout techniques

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These are probably the most common type of plant layoutModern techniques are characterized by the fact thatcopies can be duplicated directly form these layouts foruse in the plant or for recording purposes. Some of theadvantages of the two-dimensional layout are:

1. It is the least costly

2. It can be readily interpreted by technical personnel .

3. Duplicate copies can be made.

On the other hand, the disadvantages of the two-

dimensional layout are:1. It is hard to visualize overhead equipment and possible

conflicts that it may create

2. Interpretation by non technical personnel is difficult.

Two – dimension Template layouts

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These layouts are not so common, due in large part to the expense involved.However, for the construction of new plants using any overheadequipment in the way of conveyors, cranes, or mezzanine installations,this type of layout should receive serious consideration.

The relative advantage of this type of layout are:

1. It helps “sell” the layout to management.

2. It aids the visualization of the layout by non technical personnel.

3. It facilitates the work of the plant layout engineering making the layout;models can be shifted quickly for study of optional arrangements.

4. Different arrangements can be photographed for comparative purposes.

5. Provides means for checking overhead structures.

Disadvantages of the three-dimensional layout are:

1. The cost is high.

2. It requires storage areas.3. IT cannot be taken down to the shop floor for reference purposes.

4. For full effectiveness, a two-dimensional layout has to be prepared fromthe model layout for informational purpose.

Model Layouts

U i C t P i Pl t

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Several programs which are available for commercial use:CORELAP (Computerized Relationship Layout Planning) is a

construction program that uses the relationship chart andattempts to develop a layout whose objective is to achievemaximum adjacencies between the departments.

PLANET (Plant Layout Analysis and Evaluation Technique) isanother construction program which uses flow data expressedby the from – to chart or relationship chart.

MAT (Modular Allocation Technique) is a heuristic constructionprocedure which attempts to solve the quadratic assignmentproblem.

ALDEP (Automated Layout Design Program) Is the first programto use a probabilistic aspect in its solution methodology, ALDEP is a construction program that attempts to maximizethe closeness between departments.

Using Computer Program in Plant

Layout

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1. Move materials minimum distances.2. Avoid or minimize the backtracking of materials

3. Plan for a minimum of material handling.

4. Use manufacturing space economically.

5. Permit all flexibility possible.

6. Allow for possible plant expansion.

General principles of plant layout

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