S.I.C.E.

S Degree College Of Arts, Science & Commerce

(Affiliated By University Of Mumbai)

Stream:- SYBMS

Submitted By:-
1.Yogesh .H. Chalwadi (17009)
2.Rohit .B. Sharma (17010)
3.Ashwini .S. Pardeshi (17011)
4.Sagar .S. Mane (17012)

Submitted To :- Asst Prof Mudassar Sir

Topic Name:- Plant Location & Layout And Purchase

Management
 Introduction

 Plant location refers to the choice of region and the selection of a

particular site for setting up an industry. Decisions regarding location of
plant are strategically important as these are long term and non-
repetitive in nature.
 Any change after commissioning of plant results in considerable cost.
 In practice the question of location is linked to two competitive
imperatives:
1.The need to produce close to the customer due to time-based
competition, trade agreements, and shipping costs.
2.The need to locate near the appropriate labor pool to take advantage
of low wage costs and or high technical skills.
Need Or Importance Of Location Planning

 Expansion
 Cost advantages
 Discovery of raw material
 Additional facilities
 Mergers
 Political and social changes
 Increasing product demand
 Avail tax benefits
 Examples Of Plant Location In India

 Most of the textiles mills are found in or near Mumbai and Ahmadabad
because of the humidity condition that prevail their.
 Similar case is observed in the plants which manufacture cement; such
plants are located near the lime and coal deposits.
 Naptha/oil based fertilizer plants at Mangalore, Madras, cochin have been
located near ports which act as a great source for the import of the raw
materials.
 What is Plant Layout ?

 Plant layout is a mechanism which involves knowledge of

the space requirements for the facilities and also involves
their proper arrangement so that continuous and steady
movement of the production cycle take place.

 According to the George R. Terry “Plant layout is the

arrangement of machines, work areas and services areas
within a factory.”
Objectives Of Good Plant Layout

 Stream line the flow of materials through the plant.

 Facilitate the manufacturing process.

 Maintain high turnover of in-process inventory.

 Minimize materials handling and cost.

 Minimize investment in equipment.

 Minimize overall production time.

 Principles Of Plant Layout

 Principle of integration
 Principle of minimum distance
 Principle of cubic space utilization
 Principle of flow
 Principle of maximum flexibility
 Principle of safety, security and satisfaction
 Principle of minimum handling
 Types Of Plant Layout

A. Product or line layout

 Disadvantages :-
 Advantages :-
1) Lesser flexibility
1) Removal of obstacles in production
2) Large investment
2) Economics in material handling
3) Higher overhead charges
3) Lesser manufacturing time
4) Interruption due to
4) Lesser work in progress
breakdown
 Types Of Plant Layout

B. Functional Or Process Layout

 Advantages :-  Disadvantages :-
1) Maximum utilisation of machine 1) Coverage of more floor area
2) Greater flexibility 2) Higher cost of material
3) Scope for expansion handling
4) Specialisation 3) Higher labour cost
4) Longer production time
 Types Of Plant Layout

C. Static layout or fixed layout

D. Cellular layout

E. Combined layout
What is Purchase Management ?

 For an organization, purchasing is a window to the

outside world.
 Purchase management, or purchasing management,
is all about saving money and increasing profit. As
such, it is one of the most important functions in a
wholesale distribution or manufacturing business.
Objectives of purchasing

 To purchase the required material at minimum possible

price by following the company policies.

 Development of good & new vendors.

 To ensure supply of quality materials.

 To avoid Stock- out situations.

 To contribute in product improvement.

 Vendor Relations

 A good vendor is a is asset to the company

 Customer goodwill is considered important, a good
relationship with the vendor should be also treated
likewise.
 Negotiation

 Negotiation is a part of buyers

routine task.
 The process of trying to reach an
agreement through discussion or it is
bargaining between two parties.
 Make Or Buy

 If it costs less to buy rather to manufacture the

component internally.
 If the return on necessary investment to be made to
manufacture the components is not attractive
enough.
 If it feels that manufacturing internally will mean
additional labour problem.
 If the process of making the product is confidential or is
patented.