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FACILITIES MANAGEMENT

DEFINITION: facility management is an interdisciplinary field primarily devoted to the
maintenance and care of commercial or institutional buildings, such as hospitals, clinics, hotels, resorts, schools, office complexes, sports arenas or convention centers. Duties may include the care of air conditioning, electric power, plumbing and lighting systems; cleaning; decoration; grounds keeping and security. Some or all of these duties can be assisted by computer programs. These duties can be thought of as non-core or support services, because they are not the primary business (taken in the broadest sense of the word) of the owner organization

FUNCTION:
It is the role of the facility management function (whether it is a separate department or small team) to coordinate and oversee the safe, secure, and environmentally-sound operations and maintenance of these assets in a cost effective manner aimed at long-term preservation of the asset value, and also other janitorial duties such as making sure the environment is properly cleaned and sanitized for its tenants. In those cases where the operation of the facility directly involves the occupants and/or customers of the owner organization, the satisfactory delivery of facility-related services to these people will be an important consideration too; hence, the term "end-user satisfaction" is often used both as a goal and a measure of performance. The term facility management is similar to property management although not exactly the same. While both manage the day to day operations of a facility the property such as cleaning, maintenance and security, similar to janitors, one must not confuse it with such a title. The property manager has an expanded role which includes leasing and marketing activities whereas the facility manager role focuses on existing tenants who usually are owner occupants. An important feature of facility management is that it takes account of human needs of its tenants in the use of buildings and other constructed facilities. These softer factors complement the harder factors associated with the maintenance and care of engineering services installations. Facility management is performed during the operational phase of a building¶s life cycle, which normally extends over many decades. As such, it will represent a continuous process of service provision to support the owner¶s core business and one where improvement will be sought on a

engineering. . the consortium responsible for the delivery of the physical asset and then operating the core service will need to understand implicitly the day-to-day demands in managing that facility. In this connection. but it certainty contributes to the smooth and efficient working of an organization. and other operating characteristics of the firm. Under such arrangements ± typically public-private partnerships (ppp) ± owner-operators must fully integrate operational thinking into early design decision-making. inventory levels. They influence the type of equipment and level of technology employed. are brought together for manufacturing products. Bearing in mind factors such as space for future expansion and general amenities of the district. the flow of work and design of jobs. etc. guarantee success. where men. a distribution patterns. A plant should be located where the cost of production and distribution of products are minimum. Where a facility is provided on a turnkey basis. material and equipment. employment. Plant layout or facility layout choices follow the location decision. LOCATION OF FACILITIES/PLANT LOCATION: INTRODUCTION: A plant is a place. Plant location is not a static decision that can be made or forgotten. by itself. Plant decisions are very crucial because they commit organizations to long lasting financial.continuous basis. for example design-build-finance-operate (dbfo). It is essential that decision-making in the preceding design and construction phases is therefore properly informed about operational requirements if the facility is to provide optimal support to the owner¶s business. facility management can be seen as an integral part of a coordinated and controlled process of design. machine. An ideal location may not. construction and operations.

Any location which is found optimum or most appropriate today may not remain optimum tomorrow. NEED FOR SELECTION OF LOCATION: When the business is newly started. Location fixes some of the physical factors of the overall plant design e. shifting of the market etc. The existing business unit has outgrown its original facilities and expansion is not possible. Thus the problem of decision to move or to stay at a particular location is always before the management specially when some expansion program is contemplated. hence a new location has to be found. inadequate labor supply. . Other social or economic reasons. transportation need for raw materials and finished goods. for instance. power needs. The volume of business or the extent of market necessitates the establishment of branches. A lease expires and the landlord does not renew the lease.g. storage capacity for raw material taking into consideration their local availability. It determines the nature of investment costs to be incurred and also the level of many operating costs.Layout can be changed more easily than location. Government sometimes plays an important role in the choice of the location keeping in view the national benefits DYNAMIC NATURE OF PLANT: No location can be considered to be unique and can remain competitive indefinitely. fuel etc. cost of labor. taxes. Each prospective location implies a new allocation of capacity to respective market area. land. Heating and ventilation requirements. IMPORTANCE OF PLANT LOCATION Location of plant partially determines operating and capital costs. construction. The shift of the location of plant to some other place is known as relocation.

Changes in the costs and availability of materials. Integration with other groups of companies. housing facilities etc. IMPORTANT FACTORS INFLUENCING PLANT LOCATION : y y y y y y y y y y y y Market Area Raw Materials Supply Transport facilities Availability of labor Availability of utilities (water. Demolition. compulsory purchases of premises or national legislation. Changes in the pricing policy of the enterprise Undesirable labor situation. education. etc. increasing competition. Safety requirements. changes in other factors viz. Scientific discoveries/ development. new fields of technology. Power. Relocation of various associates industries and plants.) Availability of land Effluent disposal Climate Political & Strategic considerations Location should be near to the source of operating power. rise in labor costs. Changes in the nature and costs of transportation.The relocation of plant may be necessary due to following reasons: Shift in the structure of the market or movement of markets. . In availability of labor.

time. can only be measured along an ordinal or even nominal scale.e. which include controllable and uncontrollable factors for all type of organisations. Managers of both service and manufacturing organizations must weigh many factors when assessing the desirability of a particular site. quality. reliability. It is appropriate to divide the factors. Frequency security. labour costs. Location conditions are complex and each comprises a different Characteristic of a tangible (i. CONTROLLABLE FACTORS 1. quality) nature. To sum this up non-tangible features are very important for business location decisions. 2. availability and security. which influence the plant location or facility location on the basis of the nature of the organisation as 1. and transportation costs. 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. but management may downplay or even ignore some of them if other factors are more important. Proximity to markets: Every 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 .FACTORS INFLUENCING PLANT LOCATION/FACILITY LOCATION Facility location is the process of determining a geographic site for a firm s operations. including proximity to customers and suppliers.e. Specific locational factors specifically required for manufacturing and service organisations. General locational factors. GENERAL LOCATIONAL FACTORS Following are the general factors required for location of plant in case of all types of organisations. Location factors can be further divided into two categories: Primary factors are those derived from competitive priorities (cost. Freight rates. Other non-tangible features like the percentage of employees that are unionized can be measured as well. and flexibility) and have a particularly strong impact on sales or costs. production costs) and non-tangible (i. Location conditions are hard to measure. which refer to such characteristics as reliability. Secondary factors also are important.

The transport facility is a prerequisite for the location of the plant. Goods that are mainly intended for exports demand a location near to the port or large airport. Nearness to the market ensures a consistent supply of goods to customers and reduces the cost of transportation. Supply of raw material: It is essential for the organization to get raw material in right qualities and time in order to have an uninterrupted production. water and pipeline.from the market depending upon the product. If the raw materials are processed from variety of locations. locate close to the market area. When the buyers for the product are concentrated. 3. Transportation facilities: Speedy transport facilities ensure timely supply of raw materials to the company and finished goods to the customers. 2. Shelf life of the product is low. After sales services are promptly required very often. This factor becomes very important if the materials are perishable and cost of transportation is very high. locate the plant at the raw material source. at the market or at any point in between. There are five basic modes of physical transportation. the plant may be situated so as to minimize total transportation costs. jute and cotton textiles. When raw material is universally available. When weight loosing raw material is demanded. it is advisable to locate the facilities close to the market. Locating nearer to the market is preferred if The products are delicate and susceptible to spoilage. Transportation cost is high and increase the cost significantly. cement. Nearness to raw material is important in case of industries such as sugar. rail. air. road. locate the plant at the raw material source. General guidelines suggested by Yaseen regarding effects of raw materials on plant location are: When a single raw material is used without loss of weight. The choice of transport .

. transport facilities.method and hence the location will depend on relative costs. A waste disposal facility for process industries is an important factor. As large corporations have realized that inventories and warehouses have become a major cost factor. 4. etc. etc. In the case of urbanization economies. Productivity of labour is also an important factor to be considered. Infrastructure availability: The basic infrastructure facilities like power. aluminum and steel and they should be located close to the power station or location where uninterrupted power supply is assured throughout the year. Process industries like paper. External economies of scale: External economies of scale can be described as urbanization and locational economies of scale. and suitability. water and waste disposal. require continuous. This led to manufacturing districts where many companies of related industries are located more or less in the same area. cement. Prospective community is to be studied. Thus transportation cost to value added is one of the criteria for plant location. Supply of water in large amount and good quality. 6. they have tried reducing inventory costs by launching . The history of labour relations in a prospective community is to be studied. which influences the plant location. Prevailing wage pattern. The non-availability of power may become a survival problem for such industries.g. and mineral content of water becomes an important factor. Labour and wages: The problem of securing adequate number of labour and with skills specific is a factor to be considered both at territorial as well as at community level during plant location. Certain types of industries are power hungry e. convenience. firms derive from locating in larger cities rather than in smaller ones in a search of having access to a large pool of labour. become the prominent factors in deciding the location. Location economies of scale in the manufacturing sector have evolved over time and have mainly increased competition due to production facilities and lower production costs as a result of lower transportation and logistical costs. chemical.. cost of living and industrial relation and bargaining power of the unions forms in important considerations. and as well to increase their markets for selling their products and have access to a much wider range of business services. It refers to advantages of a company by setting up operations in a large city while the second one refers to the settling down among other companies of related Industries. Importing labour is usually costly and involve administrative problem.. 5.

soft loan from financial institutions. it is important to distinguish the physiology of fixed capital in buildings and equipment from financial capital. 7.Just in Time production system (the so called Kanban System).Cola operate in many different countries and can raise capital where interest rates are lowest and conditions are most suitable. Capital: By looking at capital as a location condition. large Multinational Corporations such as Coca. textile mill will require humidity. Financial capital is highly mobile and does not very much influence decisions. Some industries require specific climatic conditions e. temperature). building codes. In order to have a balanced regional growth of industries. Climatic conditions: The geology of the area needs to be considered together with climatic conditions (humidity. But on the other hand buildings can also be rented and existing plants can be expanded. Some of these incentives may tempt to locate the plant to avail these facilities offered. Just in time ensures to get spare parts from suppliers within just a few hours after ordering.. This high efficient production system was one main factor in the Japanese car industry for being so successful. The incentive package may be in the form of exemption from a safes tax and excise duties for a specific period. Capital becomes a main factor when it comes to venture capital. etc. These firms particularly need access to financial capital and also skilled educated employees. subsidy in electricity charges and investment subsidy. are the factors that demand attention.. safety. Climates greatly influence human efficiency and behaviour. Fixed capital costs as building and construction costs vary from region to region. both central and state governments in our country offer the package of incentives to entrepreneurs in particular locations.g. Government policy: The policies of the state governments and local bodies concerning labour laws. To fulfill these criteria corporations have to be located in the same area increasing their market and service for large corporations. In that case young. For example. fast growing (or not) high tech firms are concerned which usually have not many fixed assets. UNCONTROLLABLE FACTORS 8. . 9.

worker productivity. These factors are also needed to be considered by location decisions as infrastructure is enormously expensive to build and for most manufacturing activities the existing stock of infrastructure provides physical restrictions on location possibilities. taxes. and real estate costs 1. Favorable labour climate: A favorable labour climate may be the most important factor in location decisions for labour-intensive firms in industries such as textiles. 1. and consumer electronics.10. So. training requirements. railways. . Supporting industries and services: Now a day the manufacturing organization will not make all the components and parts by itself and it subcontracts the work to vendors. most notably economic overhead capital. They are listed in the order of their importance as follows. Proximity to markets 3. Quality of life 4. Proximity to suppliers and resources 5. port facilities. Community and labour attitudes: Community attitude towards their work and towards the prospective industries can make or mar the industry. power lines and service facilities and social overhead capital like schools. SPECIFIC LOCATIONAL FACTORS FOR MANUFACTURING ORGANISATION Factors dominating location decisions for new manufacturing plants can be broadly classified in six groups. Utilities. attitudes toward work. Facility location in specific location is not desirable even though all factors are favouring because of labour attitude towards management. 12. Community attitudes towards supporting trade union activities are important criteria. the source of supply of component parts will be the one of the factors that influences the location. furniture. 11. which brings very often the strikes and lockouts. Community infrastructure and amenity: All manufacturing activities require access to a community infrastructure. banking services professional consultancy services and other civil amenities services will play a vital role in selection of a location. Labour climate includes wage rates. such as roads. Favourable labour climate 2. universities and hospitals. The various services like communications.

For example. Many executives consider weak unions or al low probability of union organizing efforts as a distinct advantage. Proximity to markets:After determining where the demand for goods and services is greatest. Supply of raw material: It is necessary to consider the adequate supply of raw materials and the nature of raw materials. manufacturers of products such as plastic pipe and heavy metals all emphasize proximity to their markets. 4.and union strength. 3. . but it can make the difference in location decisions. management must select a location for the facility that will supply that demand. Those factors having direct bearing are classified into primary and those which have indirect impact are classified into secondary a) PRIMARY FACTORS 1. which can become more difficult as distance increases. Proximity to suppliers and resources: In many companies. relocation costs. taxes. These require frequent coordination and communication. financing incentives offered by local or state governments. and water). 5. Quality of life:Good schools. local and state taxes. and land costs. CLASSIFICATION AS PRIMARY AND SECONDARY FACTORS The factors affecting location are classified into two types namely primary and secondary based on their effect. This factor is relatively unimportant on its own. Utilities. energy. 2. The cost of raw materials is an important element of the total cost of production. cultural events. and real estate costs: Other important factors that may emerge include utility costs (telephone. plants supply parts to other facilities or rely on other facilities for management and staff support. Locating near markets is particularly important when the final goods are bulky or heavy and outbound transportation rates are high. and an attractive lifestyle contribute to quality of life. recreational facilities.

diesel and atomic energy .2. Nearness to market: Nearness to market is important from the point of view of control over the market.Supply of labour :The supply of labour at low cost is important . Nearness to source of labour supply is very important . 4. producers should have regular labour supply by reducing absenteeism and strikes due to unsatisfactory working conditions . nearness to source of raw materials is not as important as nearness to the market. Therefore . Power: power may be electrical . Supply of Raw-material Supply Of Capital Nearness to market Transport Availability . In those industries where the raw materials are obtained from different source. Transport Facilities: Speedy transport facilities are needed for the regular and timely supply of raw materials at low.It should also be regular . 5. All types of power required must be in abundance in order to ensure smooth flow of production. 3.

industrial development banks and other financial services must also be encouraged .Natural factors--affect the location of those industries which require a particular climate or weather conditions .Supply of capital :Industries require huge capital hence capital market must be developed at industrial centres . Not only this . b) SECONDARY FACTORS Miscellaneous Facilities Factors Natural Personal Factors Factors 1.

7.Agra .Once one industry starts at a certain place other industries come their.g.Political factors-States with stable government attract more industries 3.Miscellaneous factorsa)sufficient water supply. e)Ecological and environment considerations etc. Historical and Religious Factors. Kohlapur.g. Jamshedpur became an industrial town in the following manner.some places have industrial importance and some have religious importance e. b)Disposal of waste. Industries reach these places to reap the benefits of such facilities.2. c)Dangers of air-attacks. features.Nasik etc.Government Subsidies and Facilities.Government gives subsidies and good industrial development facilities in backward areas . Industries grow because of these important . 5.Personal Factor: Personal likeness for a place affects the establishment of business at a place .Initial Start and Goodwill. Benaras . d)Community attitude. E. 4. 6.