FACILITY PLANNING AND PLANT LOCATION

1. Facilities
Planning and
Plant
Location
H A Z E L G U E V A R R A
H A Z E L M A G O N L E S
P C U M B A - B A T C H 4
L O G I S T I C A N D S U P P L Y
C H A I N M A N A G E M E N T

2. Facilities Planning: Location
Site selection is an important activity which
decide the fate of the business. A good
location reduces the cost of production and
distribution to a considerable extend.
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3. Plant Location
●Refers to the choice of region and selection of a
Particular site for setting up a business or Factory
●An Ideal location is one where the cost of the
product is kept to minimum , with a 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.
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4. Plant Location
1. When the business is Newly Started
2. The Existing Business has outgrown its original Facilities
and Expansion is Not possible
3. A Lease expires and the Landlord does not renew the lease.
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Need for Plant Location
●Selection of a location is on pure economic
considerations will ensure an easy and regular supply of
raw material, labour, efficient plant layout to reduce cost
of production.
● Once a mistake is made in locating a plant, It becomes
extremely difficult and costly to correct it.

5. Plant Location studies are conducted in three
Phases:
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1 . R E G I O N A L F A C T O R S
2 . C O M M U N I T Y F A C T O R S
3 . S I T E F A C T O R S
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6. 6
Factors Affecting the Plan Location
Selection of Region:
●Supply Materials / Raw Materials - As a
manufacturing unit is engaged in conversion of raw
materials in to finished products, it is very essential
that is should be located in a place where the supply
of raw materials is maximum.
●Nearness to the market- Since goods are
produced for sale, It is very essential that a plant
should be located near to the market.
●Transport of Labour - Transport facilities are very
important for bringing raw materials to the factory.
- Transport Facility are very important for carrying
finished goods to the market
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7. 7
Factors Affecting the Plan Location
Selection of Region:
• Availability of Power- Power is essential
to move the wheels of an industry.
-Industries using electricity have to be
located where the supply of power is available
more.
Example – Steel Industries are located near to
power industries.
• Government Policies- Government Policy-
Licensing Policy, Freight rate Policy,
Establishing Unit in the public sector in
remote areas, Institutional Finance and
Government subsidies.
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8. 8
- T H E S E L E C T I O N O F L O C A L I T Y I N A P A R T I C U L A
R E G I O N I N F L U E N C E F O L L O W I N G F A C T O R S :
1 . A V A I L A B I T Y O F L A B O R
● L A B O R I S I M P O R T A N T F A C T O R S I N T H E
P R O D U C T I O N O F G O O D S .
● A S U F F I C I E N C Y O F L A B O U R S U P P L Y A T
R E A S O N A B L E W A G E S I S V E R Y E S S E N T I A L
F O R S M O O T H A N D S U C C E S S F U L W O R K I N G
O F T H E I N D U S T R I E S .
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COMMUNITY FACTOR

9. COMMUNITY FACTORS:
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Finance & Research
Facility
Adequate capital is
essential for the successful
working of any
organization.
●A place where facilities for
raising capital are available
attracts new industries.
Civic Amenities for
Workers
●Besides of working
condition inside the factory ,
the employees need facilities
outside it.
●Recreational Facilities such as
clubs, parks, schools, for childred
etc must provided for the
employees
Availability of
Water and Fire
● Some Industries
require plenty of Water
for there working
Local Taxes and
Restriction● Local
authorities collect charges for
the supply of Water,
Electricity and other facilities
.
●They also collect various other
taxes from industrial units.

10. Advantage and Dis -Advantages
of Urban Area
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Advantage of Urban Area
1. Good Transportation
2. Good Postal &
Communication Services
are available
3. Banking and Credit
Facilities are Available
4. Insurance Services are
Available
5. Advantage of Vicinity of
the Market
Dis-Advantage of Urban
Area
1.High Cost of Land
2. Sufficient Land is not
available
3. Cost of Labor is High
4. Extra Taxes
5. Municipal Restrictions
6.The Industrialization in city
gives birth to slums and Dirty
residence which creates the
typical problem of the
sanitation and Health
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11. Advantage and Dis -Advantages
of Rural Area
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Advantage of Rural Area
1. Land is available at
cheaper rates
2. Sufficient Land
Availability
3. Low Labor Cost
4. Minimal Taxes
5. Less of Municipality
Restrictions
Dis-Advantage of Rural
Area
1.Lack of Transport facilities
2. Lack of Banking and Credit
Facilities
3. Lack of Skilled Labor
4. Absences Insurance
Services
5. Lack of Postage and
Telegraph Services
6. High Cost of Distribution
7. Absence of recreational
facilities
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12. Advantage and Dis Advantages
of Sub-Urban Area
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Advantage of Sub-Urban Area
1. Land is Available at
cheaper rates as
compared to urban area.
2. Adequate Land
3. Good Infrastructure
Facilities
4. Good Educational
Facilities
5. Nearness to Market
Dis-Advantage of Sub-Urban
Area
It may get converted into
urban area through
development process and
we may face the same
difficulties as the case of
urban areas.
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13. Conclusion:
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facility planning and plant location decisions
play a pivotal role in shaping the success and
sustainability of businesses. A thorough
analysis of these factors and their integration
into a coherent strategy aligns the physical
infrastructure of a company with its
overarching business objectives, ensuring
long-term viability and competitiveness in the
market.
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14. Thank you
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