Introduction – Meaning & Definition - Factors affecting location, theory and practices, cost factor in location - Plant layout principles - space requirement- Different types of facilities, Organization of physical facilities – building, sanitation, lighting, air conditioning and safety.
1. UNIT – 2
PLANT LOCATION AND LAYOUT
- Prof. Afsana
Introduction – Meaning & Definition - Factors affecting location, theory and practices, cost
factor in location - Plant layout principles - space requirement- Different types of facilities,
Organization of physical facilities – building, sanitation, lighting, air conditioning and safety.
Introduction
Selecting the suitable site is an important activity because this decides the fate of the business to a
very large extent. A good location may reduce the cost of production and distribution to a
considerable extent. A bad location on the other hand could be a severe handicap for any enterprise.
Meaning of Plant location
It refers to the area where the plant will operate to produce goods and services. It is the function
of determining where plant should be located for maximum operating economy and efficiency.
A good location may help in reducing the cost of production and distribution to a considerable
extent.
Definition of Plant location
According to R.C.Davis,” Plant location is the function of determining where the plant should
be located for maximum operating economy and effectiveness.”
According to Bethel Smiths & Atwater, “Plant location is that spot where, inconsideration of the
business as a whole the total cost of production and delivering goods to all the consumers is the
lowest.”
2. UNIT – 2
PLANT LOCATION AND LAYOUT
- Prof. Afsana
Needs for the selectionof the plant location
When the new plant or business is established
When the old plant undergoes expansion, decentralization and diversification to
meet increased demands for its product.
When the existing plant should be relocated due to an expansion.
When the existing factory is not in a position to obtain renewal of lease.
When a new branch is to be opened for increasing the volume of production or distribution
or both
Social or economic reasons such as inadequate labour supply, transportation difficulties
etc.,
On the expiry of lease and the landlord does not renew the lease.
Factors affecting the selectionof plant location
1. With in the country or outside
The first step in the plant location is to decide whether the facility should be located
domestically or internationally. If the management decides on the foreign location, the next step
would be to decide upon a particular country for location.
2. Selecting the region
The selection of a particular region out of the many natural regions of a country is the second
step in the plant location. The following factors influence such selection
Availability of raw materials – The plant should be located as close as possible to the
source of raw materials. Nearness to the raw materials reduces the cost of transportation,
proper supply of materials etc.,
Nearness to the market - It is essential that the factory be located near the market as it
helps in providing prompt services to customers, after sales services, replacement orders
may be executed without delay etc.,
Adequate power supply- Power is essential to move the weaves of an industry. Coal,
electricity, oil and natural gas are resources of power. Industries using electricity have to be
located at the place where electric power is available regularly.
3. UNIT – 2
PLANT LOCATION AND LAYOUT
- Prof. Afsana
Transport facilities–Places or regions with well developed means of transport attract
industries. Transport facilities are essential for bringing raw materials and employees to the
factory and also for carrying finished products from the factory to the markets.
Suitability of climate – Climate also bears an influence on plant location. Certain
industries require a particular climate. However, in the present day, with the advancement
of science and technology, artificial climatic conditions can be created.
Government policy – In the name of Balanced regional development effects the location
of an industry in number of ways. It influences the licensing policy, institutional finance,
government subsidies etc.,
Competition between states –Different states in India competes with one another to
attract new industries. Various states offer investment subsidies and sales tax exemptions
to new units. There are various incentives as well.
3. Selection of the locality or community
Selecting a particular locality or community in a region is the next step in the plant location. A
selection of the community in a chosen region depends upon the following factors.
Availability of Labour – Labour is an important factor of production. There should be
adequate supply of labour at a reasonable wages rate. This is essential for the smooth
functioning of any enterprise.
Civic amenities for workers – Civic amenities such as schools, colleges, clubs etc., are a
must for the workers. The owners of the industrial units have provided these facilities for the
benefits of the employers.
Finance and research facilities – Adequate capital is essential for the successful working of
any organization. A place where there is scope for raising capital and to adapt with changing
technology attracts new industries.
4. UNIT – 2
PLANT LOCATION AND LAYOUT
- Prof. Afsana
Existence of Complementary and supplementary industry– The presence of the
complementary and supplementary factories are important. It helps securing the materials,
labour, gaining reputation etc.,
State assistance–The extent and nature of state assistance in monetary and non-monetary
terms to the industrial units located or to be located decide the extent of attraction of new
units to the locality.
Local taxes and insurance - Taxes like sales, property should be considered as they vary
from place to place. Similarly the insurance cost also should be considered thoroughly
examined before setting up a unit.
Availability of water – Certain factories require large quantities of water for manufacturing
purposes. Eg: fertilizers, leather tanneries etc., these units must be located in such a places
where adequate water supply is available.
Fire fighting facilities – Industrial units are exposed to fire hazards. In case of a fire
outbreak, adequate facilities must be available to put out the same otherwise the damage
caused could be extensive.
Personal factors – Entrepreneurs are not always guided by pure economic consideration in
choosing a location. Personal likes and dislikes also play an important role.
4. Selection of exact site
The choice of the exact site in a particular locality depends on the fore factors.
Suitability of the land – Not all industries can be established on all the types of the lands. It
depends on the type of the land available and which is suitable to start the industrial
concern.
Availability and cost of the land – The price of the land differs from place to place and
region to region. The cost of the land in less in rural side compared to the urban side.
Waste disposal – The waste let out by an industrial concern should be treated so that it will
not harm others. The waste treatment in the urban becomes difficult because of the space
available.
5. UNIT – 2
PLANT LOCATION AND LAYOUT
- Prof. Afsana
Type of soil/ground- Before deciding upon a site, the subsoil condition should be tested to
determine whether the soil or ground can bear the load, of a super structure.
Transportation facilities – The site should be connected to all the facilities available to the
transportation ways which helps in easy movement of labour, material, customers, suppliers
etc.,
Meaning of Plant layout
Plant Layout
It refers to the arrangement of machinery, equipments and other industrial facilities. The main
purpose is for achieving and the smooth flow of production at less cost.
It is a plan for arranging the physical facilities and manpower required to manufacture a
product utilizing the facilities and manpower in an effective manner.
Definition of Plant Layout
According to James Lundy, “Plant layout identically involves the allocation of space and the
arrangement of equipment in such a manner that overall organization or operating costs are
minimized.”
According to Moore, “Plant Layout is a plan of an optimum arrangement of facilities including
personnel, operating, equipment, storage space, material handling equipment and all other
supporting services along with the design of best structure to contain all these facilities.”
Objectives of Plant layout
Minimization of material handling and cost.
Optimum utilization of men, materials, equipment and space .
Minimizing the work in progress and maximizing the inventory turnover.
Modernizing the flow of materials.
Easing the manufacturing process.
Ensure the flexibility of manufacturing operations and arrangements.
6. UNIT – 2
PLANT LOCATION AND LAYOUT
- Prof. Afsana
Providing employee convenience, safety and comfort.
Minimizing investment in equipment .
Reducing overall production time.
Maintaining flexibility of arrangement and operation.
Assisting the organizational structure.
Principles of Plant Layout
Principles of Minimum Movement – Men and material should move the shortest distance
between operations so as to avoid waste of time and labour and also to minimize the cost of
materials handling.
Principle of Unidirectional Flow–The movement of men, material, equipment etc., should
flow in one direction so that it increases the smooth flow of production.
Principle of Efficient Space Handling – There should be minimum space between the
equipments and machines as it helps the labours to handle them effectively.
Principle of Maximum Observation Capacity – The arrangement of men, material, work
space should arranged properly so that a manager can have accessibility to observe the
working in the plant layout effectively.
Principle of Maximum Accessibility – The arrangement in the plant layout should be so
effective that the accessibility for different materials and different equipment should be easy.
Principle of Minimum Handling– The labour who works with the different types of
machines and equipment should handle them in an easy way so that it reduces the human
error.
Principle of Maximum Protection– The plant layout involves all types of equipments, raw
materials which might be highly flammable depending the production activity so it is
necessary for an industry to provide maximum protection to men material machines etc.,
Principle of Maximum Flexibility –The layout should permit revisions with least difficulty
and at minimum costs.
7. UNIT – 2
PLANT LOCATION AND LAYOUT
- Prof. Afsana
Principle of Integration of All Factors – The place of production activity in a factory
should be arranged in such a way that all factors of production like land, labour, capital and
organization should be carried out effectively.
Principle of Safety and Satisfaction – The layout should contain built in provisions for
safety. All necessary steps should be taken to enhance workers satisfaction.
Principle of Sequence – Machinery and operations should be arranged in a sequential order.
This principle is best achieved in product layout and efforts should be made to have it
adopted in the process layout.
Principle of Usage– Every inch of available space should be effectively utilized. This is
extremely important in those places where land is costly.
Principle of Compactness – The final layout should be well integrated and look compact.
All the requirements should be well knit.
Factors influencing plant layout decision
Material - Storage and movement of raw materials in a factory play an important role. There
must be sufficient space to store the raw material and the same should be moved to the
production centres efficiently for the purpose of processing.
Product – The product manufactured also influences plant layout. It could be big or small,
liquid or solid or even a gas, it could be either heavy or light. The layout meant for a heavy
product will be different from that of a light product.
Worker – The position of employees i.e., whether they are to remain stationery or moving
also influences plant layout. The layout engineer should also consider the type, position and
requirements of employees.
Machinery – The type of product, the volume of production, type of process required and
management policy determine the size and type of machinery required. This in turn
determines the plant layout.
Type of industry–The industry type and method of manufacture also exercises a significant
influence on plant layout. The industry can be
8. synthetic, analytical, extractive etc., depending on the type of industry the plant layout will
be designed.
Managerial policies – The policies of the management also determines the plant layout to
certain extent. The policies could be about provision for expansion, make or buy decision,
personnel policies, purchase policy etc.,
Importance of Plant layout
Economies in movement–The manufacturing cost is accounted for by the materials
handling. Efforts must be taken to cut down the cost in the long run. So a decision should be
taken regarding how best the materials should be handled.
Effective use of available area–Eefforts should be taken in using the available area by
planning the plant layout properly. It can achieved by planning the location of the
equipment, services in proper order, multiple functions services etc.,
Reduction of production delay– Plant layout is a significant factor in the timely execution
of orders. An ideal layout eliminates such causes of delays as shortage of space, long
distance movements of materials, spoiled work etc.,
Improved quality control – Timely execution of orders will be meaningful when the quality
of the output is not below expectations. To ensure quality, inspection should be conducted at
different stages of manufacture.
Minimum investment in equipment–Investment on equipment can be minimum and
planned properly based on location or space available. It includes minimum handling,
installation charges, machine loading, machine usage etc.,
Avoidance of messed up of materials – It refers to any place where materials are piled up
or produced at a rate speed less rapid than the previous operations. It is caused due to
inadequate machine capacity, storage space etc.,
Better production control – It is concerned with the production of a product of the right
type at the right time and at a reasonable cost. A
9. good plant layout is a requisite for control and systematic basis to build industrial concern.
Better supervision –A good plant layout ensures the number of workers handled by a
supervisor and enables the supervisor to get a full view of the entire plant at one glance.
Better utilization of labour – As labour is paid for every hour spent in the factory, the
management should utilize the time for productive purpose effectively.
Theory and Practices of Plant Location and Cost Factor in Location
1. Principle of median location
A basic principle of location theory states that an activity will select the median or middle point
of location when selling an output to, or buying an input from, activities located a disperse
points. In particular, this analysis indicates that the activity will locate at the median point, with
an equal number of attraction points in any direction, rather than the arithmetic average of the
distances to all points. The analysis imposes several restrictive assumptions, including a trip to
each location, the same transit cost per mile to each location, the same quantity of output sold
to, or input purchased from, each location. The principle of median voter is a similar principle
that has been developed in the public choice study of voting behaviour.
2. Linear Market Competition (Hotelling)
Hotelling was one of the first to introduce the principle of spatial competition (1929) by
investigating how sellers would choose locations along a linear market. He assumed that the
product was uniform so customers would buy from the most convenient location (nearest seller)
and that the friction of distance was linear and isotropic. The total price for the customer is thus
the market price plus the transport price (time or effort spent to go to the market).
10. Under such circumstances, two competitors will select locations A and B
for optimal market coverage. With P1 being the market price, the market
boundary would be F1 (point of cost indifference) since right of F1, customers would get a lower
price at location B instead of at location A and left of F1, customers would get a lower price at
location A. If for any reasons, location A is able to lower the market price from P1 to P2, then its
market area would expand at the expense of location B, from F1 to F2.
3. Weber’s Theory of Plant Location
Alfered Weber ,a German economist, was the first economist who gave scientific exposition to
the theory of location and thus filled a theoretical gap created by classical economists. He gave his
ideas in his Theory of Location of
Industries’ which was first published in German language in 1909 and
translated into English in 1929. His theory, which is also known as ‘Pure Theory’ has analytical
approach to the problem.
The basis of his theory is the study of general factors which pull an industry towards different
geographical regions. It is thus deductive in approach. In his theory he has taken into consideration
factors that decide the actual setting up of an industry in a particular area.
According to Weber, factors affecting location of industries may be broadly classified into two
groups or categories:
1. Regional factors or primary causes of regional distribution of industry.
2. Agglomerative and degglomerative factors or secondary causes
responsible for redistribution of industry.
11. 1. Regional factors
After examining the cost structures of different industries, Weber came to the conclusion that
the cost of production varies from region to region. Therefore, the industry in general is localized at
a place or in a region where the cost of production was the minimum.
According to Weber there are two general regional factors which affect ‘ cost of production:
(i) Transportation cost.
(ii) Labour costs. In fact, these two are the basic factors influencing location of industries.
Transportation costs
Transportation costs play an important part in the location of an industry. Transportation costs
are influenced by the weight to be transported and the distance to be covered. Generally, industries
will have a tendency to localize at a place where material and fuel are not difficult to obtain. Weber
has further given that the basic factors for location of an industry are the nature or type of material
used and the nature of their transformation into products.
Weber divided raw material into two categories: iniquities and specific local raw material. The
former is generally available at all places whereas the latter is found only in a few. Likewise,
material may be pure raw material and gross raw material.
Pure raw material is one which does not lose its weight during production process and the gross
raw material is that which loses considerable weight in the transformation process. The finished
product is less in weight than the weight of raw material used in its manufacture.
Examples of this type of material are sugar cane and iron ore. Weber has given a material index
to show the tendency of industries to get located either at a place where raw materials are easily
available or where the markets are closer.
Labour costs
Labour costs also affect the location of industries. If transportation costs are favourable but
labour costs unfavourable, the problem of location becomes difficult to have a readymade solution.
Industries may have tendency to get
12. located at the place where labour costs are low. But labour and transportation costs should be low
for an ideal situation. Whether labour costs will have an upper hand in the location of an industry
will be decided by labour cost index.
2. Agglomerative and Degglomerative Factors:
Agglomerative factors make industries centralize at a particulars place. Such factors may
include banking and insurance facilities, external economies and the like. The tendency of
centralization is influenced by the manufacturing index which indicates the proportion of
manufacturing costs in the total of production. If the coefficient of manufacture is high industries
will have a tendency to centralize, if it is low, tendency of decentralization may be visible.
Degglomerative factors are those which decentralize the location of industries. Examples of
such factors are: local taxes cost of land, residence, labour costs and transportation costs. Such
factors decentralization because the cost of production stands reduced due to decentralization of
shift in location.
Weber has indicated two more possibilities. One is split in location. According to Weber, when
weight losing raw materials are used in production and it is advantageous to carry out different
activities at different places industries have a tendency of split location.
Paper industry may be an example, where pulp is prepared at one place and paper
manufactured at another. The other is location coupling. If wastes remaining after the main
production are to be made saleable. Some subsidiary industry may take place. This is known as
location coupling.
Types of Plant layout
Product or line layout– It is also called as line layout. In this type of layout, the machines
and equipment are arranged in one line depending upon the sequence of operations required
for the product. The material move from to another machine sequentially without any
deviation.
Process or functional layouts – Under this type of layout, the machines of a similar type
are arranged together at one place. This type of layout is used for group production. It is
preferred when the product is not standardized and the quantity produced is very small.
13. Fixed position or Location layout– It involves the movement of manpower and machines
to the product which remains stationary. It is advisable as it reduces the cost of moving
them. This type of layout is preferred when the size of the job is large and heavy. Ex: Ships,
generators, boilers, wagon building, aircraft manufacturing etc.,
Combined layout– It is a combination of process and product layout. It is mostly seen in
industrial establishments.
Cellular Plant Layout– Under this, the materials and the information entering the operation
are pre-selected to move to one part of the operation where all the machines to process these
resources are located. After being processed, the partly finished products go to another cell.
Ex: Computer components manufacture.
Techniques of Planning Layout
1. Charts and diagrams
Operation process chart
Flow process chart
Process flow diagram
2. Machines data card– This card provides the full information about the placement and layout
of equipment. It is prepared separately for each machine. It includes information like capacity
of machines, scrap occupied, power requirement etc.,
3. Templates– It is a drawing of a machine or tool to cut out from the sheet of paper. It is to
show the area occupied by the machine. It is used by engineers to prepare the floor plan.
4. Scale models– It is the advanced version of the template. It helps in movement of men and
machines in a miniature factory. The miniature machines and models of material handling
equipment are placed in a miniature plant and moves around the like a pawn in a chessboard.
Factors consider for Planning Plant Layout
Nature of the product
Volume of production
Basic managerial policies and decisions
Nature of plant location
14. Type of industry process
Types of methods of production
Nature of machines
Climate
Nature of material
Type of machine
Characteristics of the building
Revision of Plant layout
a. Expansion
Increase in the output of the existing production
Introduction of new product in the same line
Diversification
b. Technological advancement
c. Improvements in the existing layout. Arrangements of
other facilities
Location of receiving and shipping department
Storage section
Inspection
Maintenance
Employee facilities
Medical aid facilities
Factory building
Meaning of Factory building
It is a building or a group of buildings containing a plant assembly for manufacture of goods. It
is a factor which should receive serious consideration on the part of the management of every
industrial enterprise, new or old, big or small.
Definition of Factory building
According to James Moore, “A factory building is expected to provide protection for men,
machines, materials, parts or even the company’s secrets.”
15. Factors to be considered while designing Factory building
a. Flexibility
b. Expandability
c. Strong enough
d. Materials handling
Product and equipment
Lighting, ventilation and air conditioning
Appearance
Service and maintenance cost
Location of service department
Security arrangements
Location of production department
Protection of property and people
Employee facilities and services area
Types of factory building
Single storey building i.e., MICO, BEL, HMT etc.,
Multi storey building i.e., malls, schools, colleges, government offices, software
companies etc.,
High bay type building i.e., steel mills, glass industries etc.,
Special type of building i.e., aircraft industry, ship building, rocket manufacturing etc.,
Organization of Physical facilities Industrial
sanitation
Meaning
It is concerned with the protection of the death of the employees in a factory. It is the
responsibility of every management to protect the sanitation needs of the factory.
Definition
According to World book,” Sanitation is a field of public health. It involves various efforts to
control the environment to prevent and control diseases. It also includes personal cleanliness, which
helps protect against disease”
16. Elements of Industrial sanitation
Supply of water
Disposal of waste
Supply of healthy food
Good industrial house keeping
Avoidance and control of insects
Providing facilities for personal services
Industrial Lighting
Meaning
It is one of the important physical facilities. It helps in increasing the productivity and adds to
employee satisfaction. The quantity of light required depends on the type of work to be performed.
Definition
In the words of John Shubin, “An efficient lighting system in a plant or office produces high
fatigue helps in preventing accidents and improves morale. It decreases spoilage, raises the quality
of workman ship and increases production”
Importance of proper lighting
Clarity of vision
Reduces eye strain
Quality of goods is maintained
Increased output
Effective utilization of floor space
Good house keeping
Reduces accidents
Improves employee morale
Effective supervision
Reduces spoilage and wastage in production
17. Sources of light
a. Natural lighting
Light which is obtained from the sun through the factory roof, doors and windows is referred to
as natural lighting. It is also called as day light which is abundantly available and is free of cost. It
includes
Through windows –This includes the entry of light only through side windows, opposite
side windows and through side and monitor windows.
Through roofs – This includes the entry of light through roof which would be constructed
transparent sheets, glass bocks etc., The height of ceiling also effects the light quality.
b. Artificial lighting
It refers to the illumination secured through artificial means such as through the use of bulbs,
tube lights etc., it includes
General lighting–This is provided by using fixtures, luminaries or grid system placed at a
certain height above the work area.
Direct lighting – It refers to the light flows directly downward upon the surface. This will
give rise to glare hence its use is objected.
Indirect lighting – Under this all the light emitted from the unit towards the ceiling is
diffused throughout the room.
Semi indirect lighting – Under this method, 60 to 90% of the light is directed towards the
ceiling and the rest is immediately directed downwards.
Semi direct lighting –Under this method, at least 60- 90% of the light is directed towards
and the remaining is directed upwards. Thus shadows are not formed.
Group lighting – Wherever more illumination is needed, a combination of general lighting
and local lighting is used. This can be adjusted by a modification of general lighting, when
one group of machines requires a higher intensity.
Supplementary lighting –intense light is provided at the point of work or in adjacent areas.
The lamps mounted on fixtures are directly over the job or machines.
18. Air conditioning
Meaning
It is to simultaneously control the air, its temperature, humidity, motion, distribution pressure and
purity. It also includes factors like dust, odours, bacteria and toxic gases.
Definition
A fuller definition of air conditioning is,” Industrial air conditioning, in its broad sense, requires
control over temperature, humidity, dust, motion, purity and odours.”
Objectives of Air conditioning
To protect workers health
To provide comfort to the employee
To secure specified temperature condition
To maintain the quality of the product
To protect certain machines and equipment
To promote better employee-employer relationship
To enable proper storage of raw materials
Types of Air conditioning
Comfort Air conditioning–Under this, air conditioning is provided to ensure comfort to the
occupants of an enclosed space. This is commonly observed in factory offices and
administered buildings mainly to offer a comfortable environment to the administrative staff.
Industrial Air conditioning – It is undertaken mainly to create, maintain and control the
atmospheric conditions for the purpose of manufacturing proposes and storage of finished
goods.
Summer air conditioning – In this type of air conditioning, the main object is to provide a
cool environment to employees during the summer season.
Winter air conditioning – Here the main objective is to provide warm air to the employees
during the harsh winter months.
19. Composite air conditioning – In this system air conditioning is meant both for cooling and
warming the temperature as and when necessary during the whole year.
Ventilation
Meaning
It is a process by which the products of respiration and combustion are removed from an
enclosed space. It is the removal or dilution of air which has become warm, moist and stagnant by
air. It removes stale air and lifts fresh air into the factor building.
It is the movement of air from outside a building to the outside. It includes both the exchange of
air to the exchange as well as circulation of air within building.
Importance of Ventilation
Provision of adequate fresh air.
Reduction of odours, impurities and injurious gases .
Removal of dust and bacteria.
Prevention of excessive heat generated in factories.
To prevent excess humidity in factories.
Types of ventilation
a. Natural ventilation
Wind
Difference in temperatures
Diffusion of gases
Types of natural ventilation
Chimneys
Ventilators
b. Artificial ventilation
Vacuum system
Plenum system or propulsion system i.e., fans or blowers
Balanced system
20. Industrial safety
Meaning
It refers to the various measures taken by the management to prevent the occurrence of
accidents in the factory. It helps in controlling the recognized hazards to achieve a good level of
risk.
Definition
According to R.B.Blake, “Any occurrence that interrupts or interferes with the orderly program
of the activity in question”
Industrial safety measures
Material handling safety
Industrial safety training program
Industrial safety activity
Importance of Industrial safety
Treatment for employees
Medical examination
Hazards identification
Provision of protective devices
Consultancy
Training about safety and health
Industrial accidents
Meaning
It can be defined as an occurrence which interferes with the orderly progress of work in an
industrial establishment. It is an accident that occurs when the employee is in the work place.
Definition
According to factories act of 1948 it is “An occurrence in an industrial establishment causing
bodily injury to a person which makes him unfit to resume his duties in the next 48 hours”
21. Causes of Industrial accidents
Unsafe acts of persons
Unsafe of mechanical or physical conditions
Unsafe acts of person includes
Operating without clearance.
Operating or working at unsafe speed.
Using equipment in an unsafe manner
Unsafe loading, mixing, placing or combining.
Taking unsafe position or posture.
Working on moving or dangerous equipment.
Failure to use safety attires like gloves, masks etc.,
Unsafe mechanical or physical conditions
Inadequate guarded machines.
Defective conditions in factory like rough surface, slippery, sharp, decayed areas etc.,
Unsafely designed machines and tools .
Poor housekeeping, blocked exists etc.,
Inadequate lighting and glare .
Inadequate ventilation.
Improper arrangement of processes such as piling, storage, over loading etc.,