2. Facility Location & Layout

Introduction 

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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 

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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  

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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 Involving quantitative factors:(b) Comparative cost analysis (c) Break-even and dimensional analysis. 2. Comparison of qualitative factors. 1.

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. 4. 5.

The layout of deptt. within the site. Layout of items within the deptt. Layout of individual work places.

Why layout problems exists  

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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. 2. 3. 4. 5. 6. 7.

Product demand Prod’n reqd.s. Components and parts analysis Work methods and measurements Machine reqd’s Handling and movement reqd’s. Space reqd.s.

Objectives of layout 1. 2. 3. 4. 5. 6.

Economies in materials, facilitate mfg process and handling of semi-finished goods. Proper and efficient utilization of available floor space . To ensure that work proceeds from one point to another point inside the plant w/o any delay Provision of better supervision and ctrl of operations. Careful planning to avoid frequent changes in layout which may result in undue increase in cost of prod’n 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  2. 3.

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5. 6.

To the Worker Lesser number of operations and material handling. Reduction in length of hauls and motions b/w operations minimizes prod’n time as well as the activities of workers . More Labour productivity i.e. more output per manhour i.e. low work in progress and high turnover. More safety and security to workers from accidents. Better working conditions resulting improved efficiency.

In Manufacturing Costs 

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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. 2.

3. 4.

5. 6.

Provides more space for prod’n operations. Ctrl and supervision operations are provided at appropriate points Better and convenient storage facilities. Efficient arrangement for receipt, tpt’n and delivery of raw material and finished goods. Results in less inspection activity. Cost and effort in the supervision of prd’n process are minimized.

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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.

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3. 4. 5. 6. 7. 8. 9.

Ensures smooth and regular flow of material and finished goods. Provides economy in materials and labour by minimizing waster. Short processing time. Reduces material handling. Low cost labour procurement and lesser training reqd’s. Lesser Inspection. Floor area is more prod’n Easy prod’n ctrl. Minimum need for buffer stock.

Disadvantages 1. 2. 3. 4.

Product layout is inflexible in nature. Chances of prod’n line to shut down. Supervision is more difficult. 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.

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3. 4. 5. 6.

Each prod’n unit of the system works independently and is not affected by the happenings in another section of the plant. Scope for more skilled labour leads to better quality in prod’n. Wide flexibility in prod’n facilities. Effective supervision. Machine breakdown doesn’t disrupt prod’n. Lower capital invt. (less duplication of machines).

Disadvantages 1. 2.

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4. 5. 6.

More material handling. Longer processing time:- as more time s reqd for material handling, tpt n inspection.. Requires substantial prod’n planning and ctrl. Requires more floor space. Inspection s more frequent n costlier. 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..