Plantlocationandlayoutplanning

Plant Location and Layout

Planning

By

JOSEPH GEORGE KONNULLY

PLANT LOCATIONA 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 consideredLOCATION WITH RESPECT TO

MARKETING AREA:For Materials that are produced in bulk quantities

such as cement, mineral acids and fertilizers, theplant 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. Plantsproducing bulk chemicals are best located close tothe source of the major raw material.

Ex: Soda Ash plant should be located near the SaltLakes Or near Sea, where Sodium Chloride isavailable abundantly.

Factors to be considered

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.

Factors to be consideredUTILITIES:

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

Factors to be consideredENVIRONMENTAL IMPACT, AND EFFLUENT DISPOSAL

All industrial processes produce waste products, and fullconsideration must be given to the difficulties and coat oftheir disposal. The disposal of toxic and harmful effluentswill be covered by local regulations, and the appropriateauthorities must be consulted during the initial site surveyto 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 .

Factors to be considered

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 LayoutWhile 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.

Factors influencing Plant Layout• 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.

Factors influencing Plant Layout

• 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.

PRODUCT LAYOUT

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

Process Layout or Functional Layout

Inward good

stores

Planers

Automatics Grinders

Packing

and

ShippingMilling

machinesCentral

inspection

Area

Heat

treatment

shop

Raw Material

holding

stores

Drilling

shop Assembly Finished

goods

storage

Electro

plating shopTraining 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.

FIXED POSITION LAYOUT

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.

Plantlocationandlayoutplanning

Small Business & Entrepreneurship

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