PLANT LOCATION AND

LAYOUT
1

UNIT 2
 LOCATING PRODUCTION AND SERVICE
FACILITIES
2

PLANT LOCATION is defined as the place on the

face of the earth where the Operation Unit is physically
situated.
Facility location or plant location is the process of
determining a geographical site for a firm’s operations
achieving maximum operating efficiency. Location
decisions play an integral part of the strategic planning
process of every organisation.
It may be identified by way of the country, region, state,
City/ taluk / village and locality for pinpointing.
 NEED FOR PLANT LOCATION

a. When the business is newly started;

b. The existing business unit has outgrown its original facilities.

Expansion is not possible; hence a new location has to be found,
either to relocate entirely, or set up new facilities;

c. The volume of business or the extent of the market necessitates

setting up of new branches;

d. A lease expires, and not renewed;

e. Other social, economical or political reasons.

 PLANT LOCATION THOERIES
4

Weber’s Location theory: Factors for location decision can be

divided into two broad groups, Primary and Secondary.
The primary factors include : Cost of material (including Cost of
transportation ) and Cost of labour.
The secondary factors include : Rent and rates, Banking credit,
insurance, communication etc.

Of the above, the factors which tend to concentrate industry in

one particular area are called agglomerating factors. On the
other hand, those which tend to disperse industry from their
original location are called degglomerating factors.
Why choice of a location is easier at present:
5
1. Improvement of transportation and communication facilities and speed of
services;
2. Reduction in wage differentials among regions;
3. Mobility of workers and management;
4. Better, easier and cost effective methods of construction of plants;

5. Government effort for overall development and remove regional

imbalances
6. Capital intensive technologies that require less manpower for same
output.
7. Better indoor climatic control using HVAC and environment chambers;
8. Market expansion leading to higher demands, and scope.
HVAC – Heating, Ventilation and Air-Conditioning
 Factors influencing selection of location
a) Selection of b) Selection of 6 c) Selection of d) Selection of Plot
Country Region Community or Site
i) Political stability i) R.M. availability i) Availability of labour i) Soil condition, shape,
size and topography

ii) Export-Import ii) Market proximity

ii) Civic amenities
barriers ii) Location relative to
iii) Availability of iii) Existence of other infrastructure, like
iii) Culture and power complementary and roads, power lines etc.
economy competing industries
iv) Transport facilities
iv) Finance and iii) Waste disposal
iv) Natural
v) Climatic conditions research facilities facilities.
environment
v) Availability of iv) Scope of expansion
vi) Government water
policies vi) Local taxes and
restrictions
vii) Competition
among states vii) Momentum of an
early start

viii) Personal factors

The Rural Site :
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Advantages Disadvantages
1. Enough land at reasonable 1. Lack of skilled labour
price 2. High wages for skilled
2. Low unskilled labour cost labour
3. Fewer labour problems 3. Lack of civic amenities
4. Less effect on surroundings 4. Lack of transport facilities
in the event of fire etc. 5. Lack of services
5. Uncomplicated pollution 6. Lack of complementary
norms. industries
The Urban Site :
Advantages Disadvantages
1. Good transport facility 1. High cost of land
2. Plenty labour, skilled and 2. The right size, position and
unskilled shape of land is difficult to find
3. Civic amenities available 3. High rates of rents and taxes etc.
4. Institutes for training staff are 4. High labour cost
around 5. More complicated and frequent
5. Other services available labour unrest
6. Outsourcing is easier 6. More complicated and
7. Large local market unsatisfactory layout of
facilities due to (2) above
8. Most advertising media have
prominence 7. Stringent pollution norms and
restrictions, often permission to
work is denied
8. Problems and restrictions due to
neighbours
 PLANT LAYOUT
9

A Plant Layout may be defined as the arrangement of

different departments in the operational area, and then
the arrangement of machinery, equipment and other
facilities in and around the departments.
A proper layout results in the fastest production of the
best quality with minimum cost and least stoppages.
Factors influencing Plant Layout
1. Type of Industry / Operation
2. Material (R. M, W. I. P )
3. Finished Product
4. People ( Worker, Customer )
5. Machinery and equipment
6. Location

7. Managerial Policies

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 Objectives of a good layout
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1. Provide enough production Capacity
2. Reduce Material Handling Costs
3. Reduce congestion that impedes movement of people
and material
4. Reduce hazards to personnel and customers
5. Utilise labour efficiently.
6. Increase employee morale
7. Reduce accidents
8. Utilise available space efficiently and effectively
9. Provide for volume and product flexibility
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10. Provide ease of supervision

11. Facilitate co-ordination and face-to-face

communication as applicable
12. Provide for employee health and safety
13. Allow ease of maintenance

14. Allow high machine / equipment utilization

15. Improve productivity
 Principles of effective layout:
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1. Principle of Minimum travel

2. Principle of Sequence
3. Principle of Usage
4. Principle of Compactness
5. Principle of Safety and satisfaction
6. Principle of Flexibility
7. Principle of Minimum investment
Types of Plant Layouts:
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1. Process Layout (Functional or Job Shop): Same type

of machinery are grouped together in one area. Stress
on similar process in one place.

2.Product Layout(Line): Also called “line” layout.

Machinery are in sequence of the operation process.

3. Combination Layout (Hybrid Layout) : Machinery

are laid in sequence, yet, similar machines are grouped
together.
 15

4. Cellular Manufacturing or Group Technology

Layout: Machineries are grouped in to cells, in process
or product layout. Combination of cells make up the
whole unit.
5. Fixed Position or Static Layout: Job does not move.
All equipment and people move to the job. e.g.,
Bridges, Ships, Aircrafts, Buildings.
Process Layout for a garment factory
16

Washing and
R. M. Store

dying
Cutting Stitching
F. G. Store

Packing Insp. Finishing

Ironing

Shirt - Jeans -
 Features of Process Layout
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Different sizes of machines are grouped

Distance between grouped machines are made as
short as possible
Groups are arranged such that there is no back
tracking
Convenient Inspection
Convenience of supervision
Many types of products can be manufactured
Low volume of production
Many inspection points are required
 Advantages of Process layout
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Machines are general purpose and hence

reduced investment
Flexibility in production
Better supervision
Capacity expansion is easy
Better utilization of men and machines
Break downs can be easily handled
 Disadvantages
19

Movement of material is difficult.

Mechanization not easily possible.
Requires more floor space
Production control is difficult
Distance traveled is more
Accumulation of WIP ( work- in –
progress)
Product Layout for the garment factory
20
Cutting Stitching Insp.
R. M. Store

Stitching

Washing/Dying
Cutting

Insp.
Ironing
Packing Insp. Finishing
F. G. Store

Insp.
Packing Insp. Finishing

Shirt - Jeans -
 Features of Line Layout
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Individual machines are arranged as per

sequence of operations
No back track at all. Flow is continuous.
All operations eg production, inspection,
assembly is included in a line
One or two standard products can be produced
Large volume of production
Minimum inspection required
 Advantages of Product Layout
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Mechanization is possible thus reducing

material handling costs
Production bottle necks are avoided
Better production control
Less floor space required for production
WIP is very minimum
Early detection of mistakes
Very high Through put time
Disadvantages of Product Layout
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Inflexible
Layout is expensive
Expansion is difficult
Breakdown or rejections in a line or
machine stops the entire production
Cellular Layout (in a Product Layout):
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R. Assembly Inspection Dispatch

M.
Line 1
Shear1 Press1 Press2
M/c 1 M/c 5
Shear 2
Press3

M/c 4
M/c 2
Insp. M/c 3
Paint

R. Body shop Gear Shop Line 2

M.
Assembly Inspection Dispatch
 Features of Cellular Layout
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This bring the advantages of product layout to

identified products in a process layout facility.
Some Machines are grouped into cells to
manufacture a group of products with similar
characteristics and process flow ( family of
products) . Cells could exist in a manufacturing
facility along with process layout for other
products
Machines can be laid out in ‘U’,’L’ and Straight
line to suit the material flow and overall layout of
the facility
 Advantages of cellular layout
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Lower WIP
Reduced material handling
Shorter throughput times
Simplified production planning
Improved visual control
Less time for setup because of few tool changes
Lower cost of production
Shorter delivery time
Improved Quality due to early detection of problems
Disadvantages of cellular layout
27

Reduced flexibility
Less machine utilization
Additional machines may be required to
create cells
Note :
In a cellular manufacturing setup advantages
heavily overweigh the disadvantages
Combined Layout:
28

Cutting Pckg.
Insp. Stitching Insp. Finishing Insp. Iron

R KURTA

M F
AISLE
SHIRT
G

Cutting Insp. Stitching Insp. Finishing Insp. Iron Pckg.

 Plant Layout for a Service Business

Most of the concepts and techniques explained here

can be applied to any plant layout, including services.
 Examples: Line Balancing for Restaurant self-services; Process
oriented layout for Hospitals.
Service Businesses have a more direct customer focus:
 Sometimes, the customer is required at the facility for the
company to be able to perform the service.
 Frequently, the layout is focused on the customer satisfaction
than on the operation itself.
 Some of the objectives include comfortability during the
performance of the service, as well as making attractive those
areas in direct contact with the customer.
 Plant Layout for a Service Business
Service Businesses have a more direct customer
focus:
 The customer, with his/her presence, creates the work
flow.
 The workload forecast and the activities planning is not
as accurate as it is in a manufacturing environment.
 Seasonal and heterogeneous demand: execution time can
be variable.
 Services are intangible: adjustment between demand and
production can not be done through inventory
management.
 Queues are formed by people: higher implications for the
layout.
 Plant Layout for a Service Business
 Plant layout for an office:
 The material that flows among departments and
workstations is basically information. This can be done
through:
 Individual conversations face to face.
 Individual conversations through telephone or
computer.
 Mail and other physical documents.
 Electronic mail.
 Meetings and discussion groups.
 Interphones.

 The layout solution is dictated by workers and physical

documentation movements.
 Organization of Physical Facilities
32

Plant building
Lighting
Ventilation
Air conditioning
Industrial sanitation
Industrial health and safety
 Plant Building
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Plant building is one which is built to house the

most efficient layout that can be devised for the
process involved, yet which is architecturally
attractive.
The dimensions and design of the building
should be such as to allow an easy and perfect
installation of the plant intended to carry out the
planned manufacturing process.
 Objectives of plant building
34

Provide for proper and sufficient accommodation

for business activity
Conserve land areas
Protect from damage by theft, fire
Separate internal departments
Provide suitable lighting, air conditioning and
noise control facilities
Provide amenities of service facilities
 Types of buildings
35

Single storey plant buildings

Multi-storeyed plant buildings
Special Types
Single Storey Buildings
Space is not wasted for
elevators, shaft or
staircases
Expansion is easily
possible
Cost of material
transportation is less
Multi Storey Buildings

Maximum operating
floor space per Sq Ft

Ex: Textile mills, food

processing, detergent
plants, chemical
industries
Special Types

Unique to few types

of product

Constructed for
specific purposes

Ex:Aircraft assembly,
ship building,
satellite assembly
 Factors governing the building design
39

Shape of the building

Ceiling or the roof
Floor
Fire protection
Service areas
Employee facilities
 FACTORY LIGHTING
40

Good plant illumination depends on the correct

combination of two factors namely good lighting
and proper painting of all interiors.
As per All India General standards, a minimum of
14 lumens of general illumination is taken as
adequate in any manufacturing place.
 What is good lighting?
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Emission of adequate light

Standard intensity of the light
Correct diffusion
Eradication of glare
Direction and reliability
Cool and soothing
Economical
 Significance of good lighting
42

Clear vision
Reduced eye stress and strain
Refined quality of work
Multiplied output
Reduced accident rates
Good plant up-keep
Improved employee morale
Improved supervision
Flexibility in layout
 Ventilation
43

Ventilation is the removal of stale air and letting in

fresh air in the factory building.
According to W.C.F. Hemeon, ventilation is one
which is conserved largely with engineering
techniques of controlling the air currents within
the plant and for introducing outdoor air in a
pattern and on a scale that is just adequate to
maintain satisfactory air purity.
 Significance of good ventilation
44

Provides adequate supply of fresh air

Reduces odours, impurities and noxious gases
Removes dust bacteria and suspending particles
Prevents excessive heat generation in premises
Maintains required degree of humidity
 Air – Conditioning (AC)
45

AC is a system that provides cooling of the

atmosphere within the factory building
Air-conditioning is the simultaneous
control of the temperature, humidity,
motion and purity of the atmosphere in a
confined space.
Essentials of a sound air-conditioning system
46

Air filters
Heating
Cooling
Humidification
Dehumidification
Air distribution
 Industrial Sanitation
47

Industrial sanitation signifies the

maintenance of cleanliness which is free
from all the possible filth, dirt and dust
causing diseases.
It is to do with the protection of
employee’s health in the factory under
the roof of which they work
 Significance of industrial sanitation
48

Quality and quantity of output

Employee efficiency
Employer and employee impact
Health education and training
Employee hygiene and health programmes
Growing importance and attention
 Components of industrial sanitation
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Water supply
Waste disposal
Personal service rooms
Supply of balanced and fresh food
Noise control
Good house-keeping
Storage
Tools and equipments
 Industrial safety and security
50

Safety is the elimination of hazards or their

control to the level acceptable tolerance as
determined by law, institutional
regulations, ethics, personal requirements,
scientific and technological capacities.
In other words, safety means freedom
from the occurrence or risk of injury or loss
 Location Models
51
FACTOR RATING METHOD
1. Identify the important location factors
2. Rate each factor according to its relative importance, i.e.,
higher the ratings is indicative of prominent factor
3. Assign each location according to the merits of the location
for each factor.
4. Calculate the rating for each location by multiplying factor
assigned to each location with basic factors considered.
5. Find the sum of product calculated for each factor and
select best location having highest total score.
 QUANTITATIVE MODELS FOR LOCATION DECISIONS

1. FACTOR RATING MODEL

FACTOR RATING AND LOCATION RATINGS FOR LOCATION ALTERNATIVES.
PRODUCT OF
FACTOR LOCATION RATING RATING
FACTOR RATING A B A B
1. Tax advantage 4 8 6 32 24
2. Suitable labour skill 3 2 3 6 9
3. Proximity to customers 3 6 5 18 15
4. Proximity to suppliers 5 2 4 10 20
5. Adequacy of water 1 3 3 3 3
6. Receptivity of community 5 4 3 20 15
7. Quality of educational
system 4 1 2 4 8
8. Access to rail and air
transportation 3 10 8 30 24
9. Suitability of climate 2 7 9 14 18
10.Availability of power 2 6 4 12 8
Total score 149 144