This presentation is all about Selection of site. If you want to establish your firm or company the first step that you have to do is the selection of site, which is the main part of your firm. And how you can get more amount of land at lesser price in the industrial area.

1. Gandhinagar Institute of Technology
Subject : Industrial Engineering
(2161907)
Topic : Site Selection
Mechanical : 6th : B : 2
Prepared By :
Darshit Panchal (130120119114)
Guided By :
Prof. Manthan Upadhyay

2.  Nature of Location (site) Decision:
 To start a new business, location is very important factor. Business location plays major role in
growth of business.
 Since every business wants to maximize the profit and minimize the cost, the location of business
should be such that it is convenient to both suppliers as well as the customers.
 So, the business location should be such that the customer market is easily reachable. At the same
time the suppliers should be nearer, so that the raw-material is easily available even at the time of
emergency.
 If wrong site selection is done, then it may lead to failure of the business.

3.  Following various factors are considered for deciding the plant location:
 Economic consideration
 Supplier’s market availability
 Customer’s reachability
 Manpower availability
 Statutory Rules and regulations depending on the type of business
 Government policies regarding the business
 Support of local communities

4.  Importance of Plant (site) location:
 Plant location is a strategic decision for the management. Since to install a plant is one
time process, the selection of site is very important for starting the industry.
 When it has been decided to start a plant, it is most important to select a suitable site or
location for the factory.
The selection of plant location site is important because of following reasons:
 The location of plant should be nearer to the customers as well as to suppliers in order
to reduce the transportation cost.
 For selecting the plant location, physical factors such as availability of electric power,
transportation facility, availability of labour, availability of water etc. must be
considered.
 Also, political influence and community factor may also effect the plant location.
 Climatic conditions such as temperature, humidity, rainfall, probability of flood etc. are
to be considered for site selection.

5.  Choice of site for selection:
Following factors plays important role in selection of the site:
1. Land location and its cost:
 The prime factor in deciding the site for the plant is availability of land and its cost.
 If the land is available in urban area, the cost will be high and available land will be less. On the
other hand, in rural area, the sufficient land will be available at cheaper rate.
2. Nearness to markets:
 Nearness to market, i.e. to customers is very important for any business.
 It reduce transportation cost as well as the chances of damaging of finished product.

6. 3. Nearness to suppliers:
 Nearness to suppliers will reduce the transportation cost. Particularly when the consumption of
raw material is in bulk or frequent.
4. Presence of interrelated industries:
 All parts are not manufactured by any one industry; existence of interrelated industries is very
handy and useful.
5. Transportation facility:
 The location of plant should be selected such that the transportation cost should be minimum as
possible in order to reduce overall cost.

7. 6. Availability of labour:
 There is always need of skilled and stable labour force in adequate number who works at
reasonable rate. So, if the site location is in too remote place, it is not possible to sustain in long
run.
7. Availability of power, water and fuel:
 Nowadays, all equipment are electrically run. So, it is impossible to think to run an industry
without power. So, site should be selected such that where power is sufficiently available.
 Water is used for processing in the industry, used for drinking purpose, sanitary purpose etc.
 The amount of fuel such as kerosene, diesel, petrol etc. should be easily available nearby the plant
location.

8. 8. Availability of communication facility:
9. Availability of Banking facility:
10. Government benefits:
11. Community attitude:
12. Legal aspects:
13. Security:
14. Hospital and school facility:
15. Future expansion:

9.  State regulations on location:
 In India, each state has different rules and regulations regarding the development of industrial areas.
 Due to that the industries should be located in those areas which have favorable conditions. This has
caused concentration of industries in certain areas which are facilitated by major amenities and hence
uneven distribution of industries is created in the states.
Following are the some outcomes of uneven state regulations:
1. Dense population in the industrial developed areas.
2. High living cost in the industrial developed areas.
3. Critical shortage of housing and hence development of slums
4. Congestion, bad sanitation, traffic jams in urban areas.
5. Unfavorable from national point of views.

10. In order to promote industrial development in backward areas, government provides various type of
incentives, assistance and facilities for establishing industrial unit such as:
1. Tax exemption in those areas.
2. Provision for electric power, fuel, water at cheaper rates.
3. Development of necessary infrastructure facilities.
4. Provision of subsidies to new business.
5. Provide technical assistance to business.

11.  Government policies on Decentralization:
It is necessary in order to following reasons:
1. To reduce population density from urbanareas.
2. To develop the state as whole.
3. To reduce the gap of wealth and income through generating employment in the backward areas.
4. Spread of industries in order to reduce the chances of heavy loss at the time of war.

12. Various steps are necessary for decentralization of industries in order to balance the geographical economic
growth. Some of the effective actions are as follows:
1. Development of industrial areas away from urban areas such as industrial estate, industrial parks.
2. Development of adequate public utility services in underdeveloped areas.
3. Promote private sector units to start their industries in underdeveloped areas.
4. Development of industrial estate along with all facilities for industrialization.
5. Development of special economy zones (SEZs) in each state.

13.  Comparison of Location:
Urban Areas Rural Areas
1. Good transportation facility is available 1. Difficult to get good transportation facility
2. Provides good customer market 2. Customer market is away from site
3. Right labour force is available 3. Difficulty in getting skilled workers
4. Sufficient power and water is easily available 4. Less amount of power and water availability
5. Good hospital, schools and commercial facilities 5. Banking and other hospitalities are away from site
are available location
6. Good educational and training facilities are 6. Not to have training and facility aids.
available

14. Urban Areas Rural Areas
7. Ancillary industries are nearby. 7. No ancillary industries are nearby
8. Security is available 8. No security is available.
9. Less amount of land is available 9. Huge amount of land is available
10. Cost of land is high 10. Land is cheap
11. Higher taxes are burden-some 11. Tax exemptions are available
12.Labor salaries are high 12. salaries and wages are low due to less skilled labor
13.Union problems are more 13. less union problems.

15. THANK YOU