Introduction

 The performance of an enterprise is

considerably affected by its location.
 The degree of significance for the selection of
location for any enterprise mainly depends on
its size and nature. Sometimes the nature of
the product itself suggests some suitable
location like a small scale industry mainly
selects the site where in accordance with its
capacity the local mkt. for the product is
available.
 Importance of Facility location
 Location of plant partially determines
operating and capital costs. It determines the
nature of invt. Costs to be incurred and also
the level of many operating costs.
 Each prospective location implies a new
allocation of capacity to respective mkt. area
 Govt. sometimes play an imp. Role in the
choice of the location keeping in view the
national benefits.
 Factors responsible for location
choices
 Availability of raw material:-
 Nearness to the potential mkt.:- mgt. can keep close
touch with the changes in mkt. environment and
formulate its prod’n policies accordingly
 Location shd. Be near to the source of operating
requirements;- like in some industries continuous
and adequate supply of power is of great significance
e.g.. Nylon fibre plant.
 Supply of labour:-
 Transport and communication facilities:-
 Integration with other group of companies:-
 Suitability of land and climate:- like damp climate is
favorable for textile and cotton industries.
 Availability of housing, other amenities and services.
9. Local building and planning regulations:-
local regulations and byelaws.
10. Safety reqd’s:- industries like nuclear power
stations or chemical process likely to pollute
the atmosphere shd. Be located in remote
areas.
 Measures for the selection of
location
1. Involving quantitative factors:-
(b) Comparative cost analysis

(c) Break-even and dimensional analysis.

2. Comparison of qualitative factors.

 Plant Layout

 “Layout identically involves the allocation of

space and the arrangement of equipment in
such a manner that overall operating costs are
minimized”.
Plant layout is an effort to arrange machines and
equipment, and other services within a
predesigned building-ensuring steady, smooth
and economical flow of material.
Layout begins with plant location and
continuous through three further levels
namely:

3. The layout of deptt. within the site.

4. Layout of items within the deptt.
5. Layout of individual work places.
 Why layout problems exists
 Enlargement or contraction of existing deptt.
 Movement of a deptt. due to change in the
design of product
 Addition of some new deptt. eg.
Computerization
 Replacement or addition of some new
facility/machinery
 Stages of plant layout
1. Product demand
2. Prod’n reqd.s.
3. Components and parts analysis
4. Work methods and measurements
5. Machine reqd’s
6. Handling and movement reqd’s.
7. Space reqd.s.
 Objectives of layout
1. Economies in materials, facilitate mfg process and
handling of semi-finished goods.
2. Proper and efficient utilization of available floor
space .
3. To ensure that work proceeds from one point to
another point inside the plant w/o any delay
4. Provision of better supervision and ctrl of
operations.
5. Careful planning to avoid frequent changes in layout
which may result in undue increase in cost of prod’n
6. To provide adequate safety to the workers from
accidents
7. To meet the quality and capacity reqd’s in the
most economical manner.
8. Provision of medical facilities and cafetria at
suitable and convenient places
9. To provide efficient material handling system.
10. To suggest improvements in prod’n process
and work methods.
 Advantages of a good layout
 To the Worker
2. Lesser number of operations and material handling.
3. Reduction in length of hauls and motions b/w
operations minimizes prod’n time as well as the
activities of workers .
4. More Labour productivity i.e. more output per man-
hour i.e. low work in progress and high turnover.
5. More safety and security to workers from accidents.
6. Better working conditions resulting improved
efficiency.
 In Manufacturing Costs
 Maintenance and replacement costs are
reduced.
 Loss due to waste and spoilage is minised.
 Improved quality of product with reduction in
handling i.e. movement, time and cost.
 Better cost control.
 In prod’n ctrl and supervision
1. Provides more space for prod’n operations.
2. Ctrl and supervision operations are provided
at appropriate points
3. Better and convenient storage facilities.
4. Efficient arrangement for receipt, tpt’n and
delivery of raw material and finished goods.
5. Results in less inspection activity.
6. Cost and effort in the supervision of prd’n
process are minimized.
 A good layout leads to efficient and optimum
use of machines labour and capital by
minimizing per unit prod’n time and
maintaining a proper balance b/w various
prod’n deptt. this leads to reduction in capital
invt. There is effective utilisation of floor
space facilitating operations, maintenance,
service and supervision
 Types of layout
 Line of product layout:- The position and
order in the sequence for a machine
performing particular operation is fixed.
Once a machine is in line, it cannot perform
any operation , which is not designated in
the sequence of operations. There is a
continuous flow of material during the
prod’n process from start to finish.
 Advantages
1. Ensures smooth and regular flow of material and finished
goods.
2. Provides economy in materials and labour by minimizing
waster.
3. Short processing time.
4. Reduces material handling.
5. Low cost labour procurement and lesser training reqd’s.
6. Lesser Inspection.
7. Floor area is more prod’n
8. Easy prod’n ctrl.
9. Minimum need for buffer stock.
 Disadvantages
1. Product layout is inflexible in nature.
2. Chances of prod’n line to shut down.
3. Supervision is more difficult.
4. Requires heavy capital invt.
 Functional or process layout
 Here machines performing same type of
operations are installed at one place .i.e. plant
is grouped according to functions e.g. all
drilling machines are located at one place
known as drilling section. This type of layout
is most appropriate for intermittent (JOB and
BATCH ) type of mfg systems where small
qty’s of a large range of products are to be
mfg’d e.g. machine tools etc.
 Advantages
1. Each prod’n unit of the system works independently
and is not affected by the happenings in another
section of the plant.
2. Scope for more skilled labour leads to better quality
in prod’n.
3. Wide flexibility in prod’n facilities.
4. Effective supervision.
5. Machine breakdown doesn’t disrupt prod’n.
6. Lower capital invt. (less duplication of machines).
 Disadvantages
1. More material handling.
2. Longer processing time:- as more time s reqd
for material handling, tpt n inspection..
3. Requires substantial prod’n planning and
ctrl.
4. Requires more floor space.
5. Inspection s more frequent n costlier.
6. Requires highly skilled labour creating
difficulty in labour procurement.
 Stationary layout
 This type of layout is used in situations where
the semi finished goods are of such a size and
weight that their movement from one place to
the other is not possible. Here men, equipment
and the raw-material is moved to a place
where all the mfg activities are carried out e.g.
Ship building, constructions of dams etc..