FACILITY LOCATION &

FACILITY LAYOUT
TOPICS

o Introduction
o Need for Selection of Suitable Location
o Factors Influencing Facility Location
o Location Models
o Objectives of Facility Layout
INTRODUCTION

o The purpose of the location study is to find an optimum

location which will result in the greatest advantage to the
organization.
o The facility location selection is an important strategic
level decision-making, for any kind of organization.
o The selection of location is a key decision, as large
investment is made in building, plant and machinery.
INTRODUCTION – contd…

o It is neither advisable nor possible to change the location

very often.
o The performance of an organization is considerably
affected by its location. Therefore facility location
assumes national importance.
NEED FOR SELECTING A SUITABLE LOCATION
o The need for selecting a suitable location arises because
of three situations.
 While starting a new organization –
 Identification of region – about marketing,
technology, internal organisational strengths &
weaknesses, region specific resources, legal terms,
social environment etc.

 In case of existing organization or expansion –

supply to specific market area, process & stages of
manufacturing, flexibility etc.

 In case of Global Location – tangible reasons like

reaching to the customers, intangible reasons like
customer-related reasons, other strategic reasons etc.
FACTORS INFLUENCING FACILITY LOCATION
o General Factors (for all types of organization) –
 Controllable factors – Proximity to markets, Supply of
materials, Transportation facilities, Infrastructure
availability, labour and wages, Capital etc.
 Uncontrollable factors – Government policy, Climate
conditions, Supporting industries and services,
Community and labour attitudes etc.

o Specific Locational Factors – (for manufacturing &

service organisation)
FACTORS INFLUENCING FACILITY LOCATION contd…
o Dominant Factors –
 Favourable labour climate – Labour climates includes
wage rates, training requirements, attitude towards
work, worker productivity and union strength.
 Proximity to market – Locating near markets is very
important, when the final goods are bulky or heavy
and outbound transportation rates are high.
 Quality of life – Good schools, cultural events etc.
 Proximity to suppliers
 Real estate costs & taxes
o Secondary Factors – which includes Room for
expansion, construction costs, accessibility to multiple
modes of transportation, material movement between
plants, competition from other firms etc.
LOCATION MODELS
Various models are available which help to identify the
ideal location-

o Factor rating method - identify the important location

factors.

o Weighted factor rating method – in this method factors

are assigned weights based on relative importance and
weightage score for each site using a preference matrix is
calculated e.g. average time per trip weight – 25,
employee preference – 10 etc.

o Load distance method – is a mathematical model used

to evaluate locations based on proximity factors.
OBJECTIVES OF FACILITY LAYOUT

o To streamline the flow of materials through the plant.

o To facilitate the manufacturing process and
organisational structure.
o To minimise the materials handling and cost.
o Effective utilisation of employees, equipments and space.
o Flexibility of manufacturing operations and
arrangements.
o To provide convenience, safety and comfort to the
employees.
o To minimize overall production time.
o To facilitate the Minimize investment in equipment.
FACILITY LAYOUT
o Facility layout is a method of allocating machines &
equipments, production processes as well as other
necessary services for performing various operations
resulting into output of high quality & minimum cost.
TYPES OF LAYOUTS

o Product or Line Layout

A manufacturing example would be a machine shop. A
machine shop generally has separate departments where
general-purpose machines are grouped together by function
(e.g., milling, grinding, drilling, hydraulic presses, and
lathes).
o Process or Functional Layout
For example all the milling equipment would be arranged in
the milling department, all the grinding machines in the
grinding department and welding machines in the welding
department. It requires large amount of specially designed
plant operated by a small workforce.
TYPES OF LAYOUTS – contd…
o Group Layout
Equipment/Operations are located according to the
progressive steps required to make the product.
Example: Hardware products manufacturing industry.

o Combination Layout
A combination layout is possible where an item is being
made in different types and sizes. In such cases machinery
is arranged in a process layout but the process grouping (a
group of number of similar machines) is then arranged in a
sequence to manufacture various types and sizes of
products.
Example: Plastic and Rubber manufacturing industry
TYPES OF LAYOUTS – contd…

o Fixed Position Layout

Fixed-position layouts are typical of projects in which the
product produced is too fragile, bulky, or heavy to move.
Ships, houses, and aircraft are examples. In this layout,
the product remains stationary for the entire
manufacturing cycle.
RELATION BETWEEN FACILITY LAYOUT & MATERIAL
HANDLING
o Good layout minimizes handling.
o Good layout ensures minimum travel for workmen thus
enhancing the production time and eliminating the
hunting & travel time.
o Plant layout integrates all the movements of employees
& materials through a well designated layout with
effective material handling system.
o It helps to keep material handling shorter, faster and
economical.

Thus a good layout always ensures minimum material

handling.
THANK YOU