Plantlocationandlayoutplanning

Plant Location and Layout
Planning
By
JOSEPH GEORGE KONNULLY

PLANT LOCATION
A plant should be located at a place where inhabitants
are interested in it’s success, the product can be sold
profitably and production cost is minimum – DR.
Vishweshwarya.
A plant location is often result of compromise among
conflicting social, economic and geographical conditions
– Lansburg.

PRINCIPAL FACTORS
• Location, With Respect To The Marketing Area.
• Raw Material Supply.
• Transport Facilities.
• Availability Of Labor.
• Availability Of Utilities: Water, Fuel, Power.
• Availability Of Suitable Land.
• Environmental Impact, And Effluent Disposal.
• Local Community Considerations.
• Climate.
• Political Strategic Considerations

Factors to be considered
LOCATION WITH RESPECT TO
MARKETING AREA:
For Materials that are produced in bulk quantities
such as cement, mineral acids and fertilizers, the
plant should be located close to the primary market.
RAW MATERIAL SUPPLY:
The availability and price of suitable raw materials
will often determine the site location. Plants
producing bulk chemicals are best located close to
the source of the major raw material.
Ex: Soda Ash plant should be located near the Salt
Lakes Or near Sea, where Sodium Chloride is
available abundantly.

TRANSPORT:
 The transport of materials and products to and
from plant will be an overriding consideration.
If practicable, a site should be selected that is
close to at least two major forms of Transport:
Road, Rail, Waterway Or A Seaport.
AVAILABILITY OF LABOUR:
 Labor will be needed for construction of the plant
and its Operation. Skilled construction workers
will usually be brought in from put side the site.
But there should be adequate pool of unskilled
labor available locally.

UTILITIES:
 The Word “Utilities” Is Now Generally Used For
The Ancillary Services Needed In The Operation
Of Any Production Process. These Services Will
Normally Be Supplied From a Central Facility; And
Will Include:
 A. electricity
 B. steam for process heating
 C. cooling water
 D. water for general use
 E. refrigeration
 F. effluent disposal facilities

ENVIRONMENTAL IMPACT, AND
EFFLUENT DISPOSAL
 All industrial processes produce waste products, and full
consideration must be given to the difficulties and coat of
their disposal. The disposal of toxic and harmful effluents
will be covered by local regulations, and the appropriate
authorities must be consulted during the initial site survey
to determine the standards that must be met.
POLITICAL AND STRATEGIC CONSIDERATIONS
 Capital Grants, Tax Concessions, and other inducements
are often given by governments to direct new investments
to preferred locations such as areas of high
unemployment .

LOCAL COMMUNITY CONSIDERATIONS:
The plant must be acceptable to local community such
that it should not impose any additional risk to
community t should be available for proposed plan and
future expansions.
CLIMATE:
Adverse climatic conditions at site will increase costs.
Abnormally low temperatures will require the provision of
additional insulation and special heating for equipment
and piping. Stronger locations will be needed at locations
subject to high wind loads or earthquakes.

Selection of Site
• Urban or City area.
• Rural area.
• Suburban area.

• Good transport facilities are available for the movement of raw-materials and
finished products by rail and road and at times, by water and air.
• Good and prompt postal and communication services are available.
• Banking and credit facilities available.
• Services of insurance companies are available in city areas.
• Sufficient storing facilities including cold-storage , are available.
• Ample availability of skilled and unskilled workers.
• Advantages of vicinity of the market for the product. Due to large population,
• The local demand for the product is fairly high.
• Facility of the ancillary and services units, which develop around the
• industrial strip of the city area.
• Sufficient passenger transport facilities by road and railways are available
• to employees.
• Development of the training institutes for workers and management institutes for
executives put the city area units into privileged position.
• Educational, medical and recreational institutes increase the amenities of lives in
the city area .
• Certain specific municipal services facilities are available only in the city areas, like
water supply, drainage, fire fighting facilities, sufficient police protection etc.
Advantages of Urban Area

Disadvantages of Urban or City Area
• The cost of land is very high as compared to rural areas
• Even at high cost, sufficient land is not available, which puts constraints on the
arrangement of plants and machines. Sometimes multi-story buildings are used
which are not suitable for the installation of heavy
• plant and machines
• Due to high standard of living in city area, the cost of labour is relatively high
• Due to possibilities of changing jobs from one unit to another, and tendency of
competitors to snatch away the good employees, the rate of labour turnover is very
high in city area
• The trade union movement is very strong in city area. Militant trade unionists
disturb the amicable industrial relations, which gives rise to strikes and lockouts
• Various types of taxes is levied in city areas. The rates of taxes are relative high.
Eg. Octroi is a typical tax of the city area which is not levied in rural areas.
• Certain municipal restrictions put constraints and involve extra cost due to height of
the building, disposal of waters, treatment of affluent water , elimination of air
pollution caused by smoke etc.
• The industrialization in the city areas gives birth to slums and dirty residence which
creates the typical problems of sanitation and health.

Advantages of Rural area
• As compared to the city area, the land is available at cheaper rates.
• Large plots of the land area available which can be developed for a
factory sites, office buildings and residential quarters. Horizontal
arrangement of plant machines in the vast areas of land is possible.
• Due to lower standard of living, the rates of labour are relatively lower.
• As compared to the city area, the labour force is more or less stable
which reduces the rate of labour turnover.
• The industrial relations between labour and management are
relatively amicable.
• The local taxes which are found in the city areas are practically
nonexistent in rural areas.
• The municipal restrictions which are found in city areas do not exist in
rural areas. E.g. height of buildings.
• Slumps and dirty residence are not found in rural areas. The rural
areas is conducive to good health of workers.
• Due to lack of congestion, there is danger of fire caused by
surrounding units.

Disadvantages of Rural Area
• Transportation facilities are not available in good condition and sufficient
quantities.
• Banking and credit facilities are also not available. The indigenous money-
lenders are charging exorbitantly for these services.
• Absence of insurance facilities.
• Storing and warehouse facilities are not available in rural areas.
• Passenger transport facilities are not available, as are available in city area.
• Like in city areas, the advantage of ancillary and service units is not available.
• Such units are very far from the market place and this increases the cost of
distribution of finished goods.
• Sometimes the means of transport are not available.
• It is not possible to tap the advantage of industrial training institutes or
management development pragrammes which is possible in city areas.
• It is generally not easy to get skilled workers in rural areas.
• Municipal facilities like water supply, drainage, fire-fighting etc. are not
available in rural areas.
• There is absence of recreation facilities, good educational institutes, good and
sufficient medical facilities.

Advantages of Suburban Area
• Land is available at a cheaper rate as compared to urban areas.
• Adequate land is available for future expansion unit. The machines
can be installed horizontally and still the provision for future
expansion can be made.
• Infrastructure facilities like road, water supply, drainage, banking,
warehousing,
insurance etc. are developed Government, municipal authorities or
industrial associations.
• As city area is nearest, the skilled and unskilled, both type of labour
are available.
• It is possible to tap the advantage of industrial training institutes,
management development programmes, research institutes etc.
which are available in nearby city area.
• The nearby city area provides a substantial market for the products
of the unit. This reduces the cost of marketing the finished products
and other ancillary advantages of marketing are available.
• Educational institutes, medical facilities and other recreational
facilities are available in the suburban area itself as well as in the
nearby city area.

LAYOUT PLANNING
 Layout planning in manufacturing and
service organizations involves the
physical arrangement of various
resources available in the system to
improve the performance of the
operating system, there by providing
better customer service.

Definition
• Plant layout refers to the arrangement of physical facilities such as
machines, equipment, tools, furniture etc. 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 raw material to the
delivery of the final product.
• The subject of plant layout not only covers the initial layout of machines
and other facilities encompasses improvement in, or revisions of, existing
layout in the light of subsequent developments in the methods of
production.

Objectives of a good Layout
 Provide enough production capacity.
 Reduces handling costs.
 Reduces congestion.
 Reduces hazards to personnel.
 Utilizes labour efficiently.
 Increase employee morale.
 Reduce accidents.
 Utilizes available space efficiently and
effectively.
 Provide for volume and product
facility.
 Provide ease for supervision.
 Facilitate co-ordination
communication.
 Provide safety and health.
 Allow ease of maintenance.
 Allow high machine/equipment
utilization.
 Improve productivity.

PRINCIPLES OF A GOOD PLANT LAYOUT
• Principle of Cubic Space Utilisation
• Principle of Flow
• Principle of Minimum Distance
• Principle of Overall Integration
• Principle of Satisfaction and Safety
• Principle of Flexibility
• Principle of Minimum Investment

Factors influencing Plant Layout
While deciding his factory or unit or establishment or store,
a small-scale businessman should keep the following
factors in mind:
• Factory building: The nature and size of the building
determines the floor space available for layout. While
designing the special requirements, e.g. airconditioning,
dust control, humidity control etc. must be kept in mind.
• Nature of product: product layout is suitable for
uniform products whereas process layout is more
appropriate for custom-made products.

• Type of Industry: This is an important factor while preparing the
Layout. Industries are generally classified according to their process
of manufacture. The process of manufacture may be classified into
four categories:
• (a) Synthetic Process. When two or materials are mixed to get a
product, the process is known as synthetic process. For example
cement is produced by mixing limestone with clay.
• (b) Analytic Process. This is opposite of synthetic process. It involves
breaking up material into several components or parts. Refining of
crude petroleum is an example of this case.
• (c ) Conditioning Process. In conditioning process, the form of raw
material is changed as in Jute Industry.
• (d) Extractive Process. In this type of industry by applying heat or
crushing the desired product is extracted from the original raw
material. example is extraction of Aluminium from Bauxite ore.

• Type of Production process: In assembly line industries,
product layout is better. In job order or intermittent
manufacturing on the other hand, process layout is
desirable.
• Volume of Production and Product Variety: According
to this point, while plant layout is being done, it should be
kept in mind that what volume of production is required
and the Product Mix. If the volume is low with variety of
products Job Shop Production System with Process layout
is the best. When a Production Volume is very large with
less variety Mass production system with Product layout is
preferred. Midway between these two extremities we have
Batch Production System with Combined Layout.

• Type of machinery: General purpose machines are
often arranged as per process layout while special
purpose machines are arranged according to product
layout
• Factors influencing Plant Layout: machines should be
so arranged that adequate space is available between
them for movement of equipment and people required
for repairing the machines.
• Human needs: Adequate arrangement should be made
for cloakroom, washroom, lockers, drinking water, toilets
and other employee facilities, proper provision should be
made for disposal of effluents, if any.

• Plant environment: Heat, light, noise, ventilation and
other aspects should be duly considered, e.g. paint
shops and plating section should be located in another
hall so that dangerous fumes can be removed through
proper ventilation etc. Adequate safety arrangement
should also be made.
• Thus, the layout should be conducive to health and
safety of employees. It should ensure free and efficient
flow of men and materials. Future expansion and
diversification may also be considered while planning
factory layout.

TYPES OF PLANT LAYOUT
 Product layout
 Process layout
 Fixed Position/ Stationary layout
PRODUCT LAYOUT
 Layout that uses standardized processing
operations to achieve smooth, rapid, high-
volume flow
 Here machines are arranged acc. To the
needs of product & in the same sequence
as the operations are necessary for
manufacture.

Advantages of Product layout:
• Low cost of material handling, due to straight and short
route and absence of backtracking
• Smooth and continuous operations
• Continuous flow of work
• Lesser inventory and work in progress
• Optimum use of floor space
• Simple and effective inspection of work and simplified
production control
• Lower manufacturing cost per unit

Disadvantages of Product
layout
• Higher initial capital investment in special
purpose machine (SPM)
• High overhead charges
• Breakdown of one machine will disturb the
production process.
• Lesser flexibility of physical resources.

PROCESS LAYOUT
layout that can handle varied processing
requirements
here all machines performing similar type
of operations are grouped together at one
location in the process layout. thus here
facilities are grouped together acc. to their
functions. e.g. all drilling machines are
located at one place known as drilling
section.

Process Layout or Functional Layout
Inward good
stores
Planers
Automatics Grinders
Packing
and
ShippingMilling
machines
Central
inspection
Area
Heat
treatment
shop
Raw Material
holding
stores
Drilling
shop Assembly Finished
goods
storage
Electro
plating shop
Training Shop
(Lathes)
Painting shop

Advantages of Process Layout
• Handle a variety of processing requirements
• Not vulnerable to equipment failures
• General-purpose equipment is less costly and is easier
and less costly to maintain
• Possible to use individual incentive systems
• Scope for expansion as the capacity can be easily
increased.
• Greater flexibility.

Advantages of Process Layout
• Lower initial capital investment is required.
• There is high degree of machine utilization, as a
machine is not blocked for a single product
• The overhead costs are relatively low
• Breakdown of one machine does not disturb the
production process.
• Supervision can be more effective and specialized.

Disadvantages of Process Layout
• Material handling costs are high due to
backtracking
• More skilled labour is required resulting in
higher cost.
• Work in progress inventory is high needing
greater storage space
• More frequent inspection is needed which
results in costly supervision

FIXED POSITION LAYOUT
Layout in which the product or project remains stationary,
and workers, materials, and equipment are moved as
needed. E.g.
 Employed in large project type organisation
 construction of DAMS.
 ISRO
 Helicopter
 Nuclear engg. Division of BHEL
The product, because of its size and/or weight, remains
in one location and processes are brought to it.

Advantages of Fixed position layout
• The investment on layout is very small.
• The layout is flexible as change in job
design and operation sequence can be
easily incorporated.
• Adjustments can be made to meet
shortage of materials or absence of workers
by changing the sequence of operations.

Disadvantages of Fixed position layout
Disadvantages of Fixed position layout are as follows:
• As the production period being very long so the capital
investment is very high.
• Very large space is required for storage of material and
equipment near the product.
• As several operations are often carried out simultaneously
so there is possibility of confusion and conflicts among
different workgroups.

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