PRODUCTION MANAGEMENT

1. PRODUCTION MANAGEMENT
PRESENTED BY:RIYA S.PAWASHE

2. DEFINATION:
“plant location is the function of
determining location for a plant for
maximum operating economy and
effectiveness”.

3. NEED FOR SELECTING A SUITABLE SITE OR LOCATION MAY
ARISE IN THE FOLLOWING SITUATION:
1. When the business is newly started.
2. When the existing plant is to be re-located due to
expansion.
3. The volume of business increases to such an extend that
branches need to be established.
4. When a lease expires and landlord does not renew the
lease.
5. When a company thinks that there is possibility of
reducing manufacturing cost by shifting cost from one
location to another.
6. Other reasons such as inadequate labour supply ,
transportation difficulties , etc.

4. Determinants / steps in location
selection
1. Deciding on international or domestic
location.
2. Selection of region
3. Selection of locality or community.
4. Selection of the site.

5. Deciding on international / domestic
location.
The first step in plant location is to decide whether the
facilities should be located domestically or internationally, if
the management decides on foreign location , the next logical
step would be to decide upon a particular country for location ,
the choice of particular country depends on such factors such
as political stability, export and import ,currency and exchange
rates , etc.

6. SELECTION OF REGION
1. AVAILABILITY OF RAW MATERIALS
2. NEARENESS TO THE MARKET
3. AVAILABILITY OF POWER
4. TRANSPORT FACILITIES
5. SUITABILITY OF CLIMATE
6. GOVERNMENT POLICY
7. COMPETITION BETWEEN STATES.

7. 1.Availability of raw materials:-
The plant should be located as close as possible to the
source of raw materials, it has following advantages.
a) Reduce cost of transportation.
b) Regular and proper supply of materials.
c) It saves cost of storage .
For ex, steel industries are concentrated on Bihar , west
bengal,etc because of availability of iron , coal and
ore.

8. 2.Neareness to the market:-
It is essential that the factory should be located near by
the market for the following reasons:-
a) It reduces transportation cost
b) From service to customers.
c) To give after sale services.
d) Replacement orders may be executed without any
delay.

9. 3.Availability of power :-
Power is essential to move the waves of an
industry , coal ,electricity , oil and material gas
are resources of power where coal is the source
of power as in case of iron and steel industry
.the factory as to be located near the sources.

10. 4.Transport facilities :-
This are essential for bringing raw materials
and employees to the factory and for carrying
finished products from the factory to the
market.

11. 5.Suitability of climate
It also bears an influence on plant location , certain
industry is required to a particular climate.
Ex: humid climate is necessary for cotton textile and
jute mills i.e., why the cotton textile industry is
situated in Mumbai and jute textile mills in Kolkata.

12. 6.Govt policy:-
The govt of India as been influencing plant location
in a number of ways i.e.,
1) Licensing policy
2) Establishing a unit in the public sector in a remote
area and developing it is so as to attract other
industries .
3) Institutional finance and govt subsidies.

13. 7.Competition between states:-
Different states in India compete with one another
to attract new industries various state offer
investment subsidies and sales tax exemption to the
new units.
For ex: west Bengal provides interest free loans to
meet the cost of flexibility study whereas in Tamil
Naidu and Haryana 50% of flexibility of study cost is
subsidies.

14. Selection of locality / community
1) Availability of lab our.
2) Civic amenities for workers
3) Existence of complementary and competitive industry.
4) Finance and research facilities .
5) Availability of water
6) Local taxes and insurance
7) Personal factor

15. 1.Availability of Labour:-
Labour is important factor of production
there should be adequate supply of labour at
reasonable rate of wages , the labour required
would be either skilled or unskilled.

16. 2.Civic amenities for workers:-
Civic amenities such as hospitals , schools,
colleges, clubs, theatre,etc are must for
workers in some instances owners of industrial
units have provided this facilities for the
benefits of the employees.
For ex: in bhilai Durgapur township have
been comfort for workers.

17. 3.Existence of complementary and
competitive industry:-
The existence of complementary industry has
following benefits:-
a) An industrial unit in collaboration with other
unit can secure materials on better term then it
can do it by itself.
b) The concentration of one industry at one place
improves the labour market.
c) A group of plants will attract a variety of repair
plants such as foundries , machine , shop,etc.

18. 4.Finance and research facilities:-
Adequate is essential for the successful
working of any organization . Research
facilities are extremely important to keep on
changing technology. It is with adequate
research facilities also attract industries.

19. 5.Availability of water:-
Certain factors require large quantity of
water for manufacturing processes.
For ex : fertilizer unit ,leather unit ,etc.so these
unit should be located in such places where
adequate water supply is available.

20. 6.Local taxes and insurance:-
The common taxes like octroi , license fees
and other taxes such as income tax , property
tax vary from area to area .so such taxes and
insurance also be considered.

21. 7.Personal factor :-
Entrepreneurs are not always guided by pure
economic consideration in choosing a location
, personal likes and dislikes also play an
important factor.

22. Selection of the site:-
1)Soil size and topography
2)Disposal of waste

23. 1.Soil Size And Topography
Before deciding upon a site soil conditions should
be tasted to determine whether the soil or
ground can bear the load of super structure.
For ex :-soil is very sandy or very soft then a deep
foundation will have to be laid for the factory
building.
Topography is the place i.e hilly, rocky ,etc which is
also very important before selecting a site.

24. 2.Disposal of waste:-
The site selected for plant should have
facilities for waste disposal affluent should be
disposed off properly or else it would cause
environmental hazards.

25. THANK YOU