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   Plant location refers to the choice of region and
    the selection of a particular site for setting up a
    business or factory.
   But the choice is made only after considering
    cost and benefits of different alternative sites. It
    is a strategic decision that cannot be changed
    once taken. If at all changed only at considerable
    loss, the location should be selected as per its
    own requirements and circumstances. Each
    individual plant is a case in itself.
   Businessman should try to make an attempt for
    optimum or ideal location.
   An ideal location is one where the cost of the
    product is kept to minimum, with large
    market share, the least risk and the
    maximum social gain.
   It is the place of maximum net advantage or
    which gives lowest unit cost of production
    and distribution.
   For achieving this objective, small-scale
    entrepreneur can make use of locational
    analysis for this purpose.
    Natural or climatic conditions.
    Availability and nearness to the sources of raw
    material.
   Transport costs
    Access to market
    Availability of Infrastructural facilities
    Availability of skilled and non-skilled labour and
    technically qualified and trained managers.
   Banking and financial institutions are located nearby.
    Locations with links: to develop industrial areas or
    business centers result in savings and cost reductions
    in transport overheads, miscellaneous expenses.
    Strategic considerations of safety and security
    should be given due importance.
   Government influences: Both positive and negative
    aspects
   Plant layout refers to the arrangement of
    physical facilities such as machinery,
    equipment, furniture etc. within the factory
    building in such a manner so as to have
    quickest flow of material at the lowest cost
    and with the least amount of handling in
    processing the product from the receipt of
    material to the shipment of the finished
    product.
   According to Riggs, “the overall objective of
    plant layout is to design a physical
    arrangement that most economically meets
    the required output – quantity and quality.”
   According to J. L. Zundi, “Plant layout ideally
    involves allocation of space and arrangement
    of equipment in such a manner that overall
    operating costs are minimized.
   Proper and efficient utilization of available floor space
   To ensure that work proceeds from one point to
    another point without any delay
   Provide enough production capacity.
   Reduce material handling costs
   Reduce hazards to personnel
   Utilise labour efficiently
   Increase employee morale
   Reduce accidents
   Provide for volume and product flexibility
   Provide ease of supervision and control
   Provide for employee safety and health
   Allow ease of maintenance
   Allow high machine or equipment utilization
   Improve productivity
In case of manufacturing unit, plant layout may
  be of four types:
 Product or line layout
 Process or functional layout
 Fixed position or location layout
 Combined or group layout
   Under this, machines and equipments are arranged in one line
    depending upon the sequence of operations required for the
    product.
   The raw material moves very fast from one workstation to other
    stations with a minimum work in progress storage and material
    handling.
   The grouping of machines should be done keeping in mind the
    following general principles.
   All the machine tools or other items of equipments must be
    placed at the point demanded by the sequence of operations
   There should no points where one line crossed another line.
   Materials may be fed where they are required for assembly but
    not necessarily at one point.
   All the operations including assembly, testing packing must be
    included in the line
   In this type of layout machines of a similar type are
    arranged together at one place. E.g. Machines
    performing drilling operations are arranged in the
    drilling department, machines performing casting
    operations be grouped in the casting department.
    Therefore the machines are installed in the plants,
    which follow the process layout.
   Hence, such layouts typically have drilling department,
    milling department, welding department, heating
    department and painting department etc. The process
    or functional layout is followed from historical period.
   The work, which has to be done, is allocated to the
    machines according to loading schedules with the
    object of ensuring that each machine is fully loaded.
    Process layout is shown in the following diagram.
   In this type of layout, the major product
    being produced is fixed at one location.
    Equipment labour and components are
    moved to that location.
   All facilities are brought and arranged around
    one work center. This type of layout is not
    relevant for small scale entrepreneur. The
    following figure shows a fixed position layout
    regarding shipbuilding.
   Certain manufacturing units may require all three
    processes namely intermittent process (job
    shops), the continuous process (mass production
    shops) and the representative process combined
    process [i.e. miscellaneous shops].
   In most of industries, only a product layout or
    process layout or fixed location layout does not
    exist. Thus, in manufacturing concerns where
    several products are produced in repeated
    numbers with no likelihood of continuous
    production, combined layout is followed.
   Factory building:
   Nature of product:
   Production process:
   Type of machinery:
   Repairs and maintenance:
   Human needs:
   Plant environment:
Plant location and layout

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Plant location and layout

  • 2. Plant location refers to the choice of region and the selection of a particular site for setting up a business or factory.  But the choice is made only after considering cost and benefits of different alternative sites. It is a strategic decision that cannot be changed once taken. If at all changed only at considerable loss, the location should be selected as per its own requirements and circumstances. Each individual plant is a case in itself.  Businessman should try to make an attempt for optimum or ideal location.
  • 3. An ideal location is one where the cost of the product is kept to minimum, with large market share, the least risk and the maximum social gain.  It is the place of maximum net advantage or which gives lowest unit cost of production and distribution.  For achieving this objective, small-scale entrepreneur can make use of locational analysis for this purpose.
  • 4. Natural or climatic conditions.  Availability and nearness to the sources of raw material.  Transport costs  Access to market  Availability of Infrastructural facilities  Availability of skilled and non-skilled labour and technically qualified and trained managers.  Banking and financial institutions are located nearby.  Locations with links: to develop industrial areas or business centers result in savings and cost reductions in transport overheads, miscellaneous expenses.  Strategic considerations of safety and security should be given due importance.  Government influences: Both positive and negative aspects
  • 5. Plant layout refers to the arrangement of physical facilities such as machinery, equipment, furniture etc. within the factory building in such a manner so as to have quickest flow of material at the lowest cost and with the least amount of handling in processing the product from the receipt of material to the shipment of the finished product.
  • 6. According to Riggs, “the overall objective of plant layout is to design a physical arrangement that most economically meets the required output – quantity and quality.”  According to J. L. Zundi, “Plant layout ideally involves allocation of space and arrangement of equipment in such a manner that overall operating costs are minimized.
  • 7. Proper and efficient utilization of available floor space  To ensure that work proceeds from one point to another point without any delay  Provide enough production capacity.  Reduce material handling costs  Reduce hazards to personnel  Utilise labour efficiently  Increase employee morale  Reduce accidents  Provide for volume and product flexibility  Provide ease of supervision and control  Provide for employee safety and health  Allow ease of maintenance  Allow high machine or equipment utilization  Improve productivity
  • 8. In case of manufacturing unit, plant layout may be of four types:  Product or line layout  Process or functional layout  Fixed position or location layout  Combined or group layout
  • 9. Under this, machines and equipments are arranged in one line depending upon the sequence of operations required for the product.  The raw material moves very fast from one workstation to other stations with a minimum work in progress storage and material handling.  The grouping of machines should be done keeping in mind the following general principles.  All the machine tools or other items of equipments must be placed at the point demanded by the sequence of operations  There should no points where one line crossed another line.  Materials may be fed where they are required for assembly but not necessarily at one point.  All the operations including assembly, testing packing must be included in the line
  • 10.
  • 11. In this type of layout machines of a similar type are arranged together at one place. E.g. Machines performing drilling operations are arranged in the drilling department, machines performing casting operations be grouped in the casting department. Therefore the machines are installed in the plants, which follow the process layout.  Hence, such layouts typically have drilling department, milling department, welding department, heating department and painting department etc. The process or functional layout is followed from historical period.  The work, which has to be done, is allocated to the machines according to loading schedules with the object of ensuring that each machine is fully loaded. Process layout is shown in the following diagram.
  • 12.
  • 13. In this type of layout, the major product being produced is fixed at one location. Equipment labour and components are moved to that location.  All facilities are brought and arranged around one work center. This type of layout is not relevant for small scale entrepreneur. The following figure shows a fixed position layout regarding shipbuilding.
  • 14.
  • 15. Certain manufacturing units may require all three processes namely intermittent process (job shops), the continuous process (mass production shops) and the representative process combined process [i.e. miscellaneous shops].  In most of industries, only a product layout or process layout or fixed location layout does not exist. Thus, in manufacturing concerns where several products are produced in repeated numbers with no likelihood of continuous production, combined layout is followed.
  • 16. Factory building:  Nature of product:  Production process:  Type of machinery:  Repairs and maintenance:  Human needs:  Plant environment: