Question 1:

“Plant planning begins with location.” Do you agree with this statement? Critically
examine the factors which will influence for location of a plant.

I am strongly agree with the above statement that a plant planning must begins with a location.
This is because the selection of location is a key-decision as large investment is made in building
plant and machinery. It is not advisable or not possible to change the location very often. So an
improper location of plant may lead to waste of all the investments made in building and machinery
also equipment.

Facility location is the process of determining a geographic site for a firm’s operations.
Managers of both service and manufacturing organizations must weigh many factors when
assessing the desirability of a particular site, including proximity to customers and suppliers,
labour costs, and transportation costs. Location conditions are complex and each comprises a
different characteristic of a tangible such as freight rates and production costs therefore non-
tangible are reliability, frequency security and quality nature.

Location conditions are hard to measure. Tangible cost based factors such as wages and
products costs can be quantified precisely into what makes locations better to compare. On the
other hand non-tangible features, which refer to such characteristics as reliability, availability and
security, can only be measured along an ordinal or even nominal scale. Other non-tangible features
like the percentage of employees that are unionized can be measured as well. To sum this up non-
tangible features are very important for business location decisions.

It is appropriate to divide the factors, which influence the plant location or facility location
on the basis of the nature of the organisation as general locational factors, which include
controllable and uncontrollable factors for all type of organisations. Therefore specific
locational factors specifically required for manufacturing and service organisations. Location
factors can be further divided into two categories. There are dominant factors are those derived
from competitive priorities such as cost, quality, time, and flexibility also have a particularly strong
impact on sales or costs. Secondary factors also are important, but management may downplay
or even ignore some of them if other factors are more important.
 Factors influencing plant location

First factor that influencing plant location from the controllable is the proximity to the
markets. Cost of distribution is an important item in the overhead expenses. So it will be
advantageous to be near to the center of demand for finished products. Importance of this is fully
realized if the material required for the manufacturing of products are not bulk and fright charges
are small. For this purpose market analysis should be carried out keeping in view the following
points such as market trend and competition regarding product to be manufactured, industrial
market, consumer habits and income, population and the scope of export to neighbouring
countries. Besides that, all the company is expected to serve its customers by providing goods and
services at the time needed and at reasonable price organizations may choose to locate facilities
close to the market or away from the market depending upon the product. When the buyers for the
product are concentrated, it is advisable to locate the facilities close to the market. Therefore
locating nearer to the market is preferred if the products are delicate and susceptible to spoilage,
after sales services are promptly required very often, transportation cost is high and increase the
cost significantly and the shelf life of the product is low. Nearness to the market ensures a
consistent supply of goods to customers and reduces the cost of transportation.

Since freight charges of raw materials and finished goods enter into the cost of production,
therefore transportation facilities are becoming the governing factor in economic location of the
plant. Speedy transport facilities ensure timely supply of raw materials to the company and finished
goods to the customers. The transport facility is a prerequisite for the location of the plant.
Depending upon the volume of the raw materials and finished products, a suitable method of
transportation like air, road, rail, water and pipeline is selected and accordingly plant location is
decided. Goods that are mainly intended for exports demand a location near to the port or large
airport. The choice of transport method and hence the location will depend on relative costs,
convenience, and suitability. Thus transportation cost to value added is one of the criteria for plant
location.

Moreover, the climate conditions of the region or area where the plant is to be located has
an important bearing on both the capital and operational costs. Normally following aspects like
rain fall or snow fall in the area concerned, ambient temperatures, humidity, wind velocities and
direction and incidence of cyclones, storms etc must be considered. Hence, climates greatly
influence human efficiency and behaviour. Some industries require specific climatic conditions.
For an example a textile mill will require humidity.

However the government policies also playing an important role in plant location. The
policies of the state governments and local bodies concerning labour laws, building codes, safety,
etc., are the factors that demand attention. In order to have a balanced regional growth of industries,
both central and state governments in our country offer the package of incentives to entrepreneurs
in particular locations. The incentive package may be in the form of exemption from a safes tax
and excise duties for a specific period, soft loan from financial institutions, subsidy in electricity
charges and investment subsidy. Some of these incentives may tempt to locate the plant to avail
these facilities offered. Therefore, in a planned economy like India, plant location is encouraged
or discouraged at particular places due to government policy. For example, government offers
several incentives for location of plants in backward areas. Again, government has put restrictions
on granting licences to certain industries to be set-up in metropolitan cities with a certain figure of
population.
Question 2:

Write about layout design procedure. Explain different computerized layout planning
Techniques?
Plant layout refers to the arrangement of physical facilities such as machinery, equipment, furniture
etc. within the factory building 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
material to the shipment of the finished product. It is focus on how computers can aid the facility
layout process. Designer must interact with multiple design databases and provide the integration
between them to translate information and ensure consistency. Computer-aided, design is a
technique used in the overall design process to increase the effectiveness of the designer. By its
very nature, computer-aided design means a close relationship between man and the computer by
various means, such as visual displays (graphics), terminal keyboards, computer printouts, and
other means. This man computer interface has proven an extremely effective tool in all types of
design problems. Architectural and aircraft designers have been prime proponents of computer-
aided design, however many fields are using it on a daily basis. Hence, the most time tested
computerized layout techniques and software program packages that are frequently used are
CRAFT, CORELAP, ALDEP, etc.
(Automated Layout Design Program) ALDEP is basically a construction algorithm but
it can also be used to evaluate two layouts. The algorithm uses basic data on facilities and builds a
layout by successively placing the layout using relationship information between the departments.

Area of
each
department
Location
and size of Length and
any width of
restricted facility
area
Basic
input of
ALDEP
Minimum
Relationshi
closeness
p chart
preference
showing
(MCP)
the
value
closeness
Sweep
width
 There are procedures adopted for using ALDEP. First of all, input all the basic input of
ALDEP which are stated in the above diagram. Secondly, one department must select randomly
and placed in the layout. In step 3, the algorithm uses minimum closeness required between
departments for the selection of departments to be placed with an earlier placed department. Select
the department having maximum closeness rating. If there is no department having minimum
closeness preference, then any department that remains to be placed is selected. If all the
departments are placed in the layout in the step 4, go to step 5. Else, go to step 3. Step 5 is compute
the total score of the layout. In the step 6 if the total score required is the acceptable score, then go
to step 7, else go to step 2. In the last step print the current layout and the corresponding score.
The next algorithm is Computerized Relationship Layout Planning (CORELAP). This
algorithm is based on Muther's procedure given in systematic Layout Planning. A computer
algorithm was developed by R.C. Lee. Interactive version was developed by James Moore. Input
requirements needed in this algorithm are number of departments and their area, closeness
relationship as given by REL-chart and weighted rating for REL-chart entries. Optional input
information are scale of output, building length to width ratio and department pre-assignment.
General approach is to select the most critical department first, and place it at the centre of the
layout.
After the first department is placed, then the department having highest closeness
relationship with the department which are already placed is selected and placed in the best
location adjacent to the previously placed departments. CORELAP builds the layout from centre.
The final layout will not have a regular rectangular shape. The user has to modify it slightly to suit
the situation. Final score of the layout is developed by using the closeness values and rectilinear
distances between all pairs of the departments. The major steps of CORELAP algorithm are as
following which is started with defining basic data. Followed by determination of placement of
order. Then placement of department s in the layout and lastly finding the total score of the layout.
Computerized Relative Allocation of Facilities Technique (CRAFT) (Buffa et al.,
1964) is a computerized heuristic algorithm that takes in load matrix of interdepartmental flow and
transaction costs with a representation of a block layout as the inputs. The block layout could either
be an existing layout or; for a new facility, any arbitrary initial layout. The algorithm then computes
the departmental locations and returns an estimate of the total interaction costs for the initial layout.
The Governing algorithm is designed to compute the impact on a cost measure for two-way or
three-way swapping in the location of the facilities. For each swap, the various interaction costs
are computed afresh and the load matrix and the change in cost (increase or decrease) is noted and
stored in the RAM. The algorithm proceeds this way through all possible combinations of swaps
accommodated by the software. The basic procedure is repeated a number of times resulting in a
more efficient block layout every time till such time when no further cost reduction is possible.
The major features of CRAFT are attempts to minimize transportation cost, where
transportation cost = flow x distance x unit cost and it required the assumptions that move costs
are independent of the equipment utilization and move costs are linearly related to the length of
the move. Distance matrix used in the rectilinear distance between department centroids. CRAFT
being a path-oriented method, the final layout is dependent on the initial layout. Therefore, a
number of different initial layouts should be used as input to the CRAFT layout. CRAFT allows
the use of dummy departments to represent fixed areas in the layout.

Initial
layout

Fixed
Cost per
departments
unit
and their
distance
location

CRAFT
input
requirements

Area of
Flow data
departments

Total
number of
departments

There are procedures adopted for using CRAFT. First of all, input all the CRAFT input
requirements which are stated in the above diagram. Secondly, compute centroids of the
departments in the present layout. Thirdly, form distance matrix using the centroids. As step 4,
given data on flow, distance and cost, compute the total handling cost of the present layout. Step
5, find all the possible pair-wise interchanges of the departments based on common border or equal
area criterion. For each possibility, interchange the corresponding centroids and compute
approximate costs. Sixthly, find the pair of departments corresponding to the minimum handling
cost from among all the possible pairs of interchanges. In the seventh step, do check whether the
cost in the previous step less than the total cost of the present layout? If yes go to step 8 if not go
to step 11. In the 8th step,
8. Interchange the selected pair of department call this as new layout
Compute centroid, distance matrix and total cost
9. Is the cost of new layout is less then cost of present layout
If yes go to step 10 if not go to step 11
10. The new lay out is considered as the PRESENT LAYOUT its data on
the centroida, layout matrix and the total cost is retained go to step 5
11. Print the present layout as the FINAL LAYOUT.