layout Describe the concepts of plant location and plant  Identify the various factors to be considered for selection of plant location from state/area to the specific site  Distinguish among the alternative patterns of plant layout  Discuss the various factors influencing the choice of an initial layout and its subsequent modification

 large market share. .What is a plant location?  Plant location refers to the choice of region and the selection of a particular site for setting up a business or factory. small-scale entrepreneur can make use of locational analysis for this purpose. For achieving this objective. What is an ideal location?  cost of the product is kept to minimum.  the least risk and the maximum social gain.  It is the place of maximum net advantage or which gives lowest unit cost of production and distribution.

LOCATIONAL ANALYSIS (a)Demographic Analysis: It involves study of population in the area in terms of total population (in no. they are also called as running costs. size and quality of competition in a given trade area. Two sites A and B are evaluated in terms of above mentioned two costs as follows: . location. (d) Traffic analysis: To have a rough idea about the number of potential customers passing by the proposed site during the working hours of the shop. per capita income. He would also see the feasibility of accessing the trade area from alternative sites. Costs of establishment is basically cost incurred for permanent physical facilities but operational costs are incurred for running business on day to day basis. educational level. (b) Trade Area Analysis: It is an analysis of the geographic area that provides continued clientele to the firm. occupational structure etc. age composition.). (e) Site economics: Alternative sites are evaluated in terms of establishment costs and operational costs under this. (c) Competitive Analysis: It helps to judge the nature. the traffic analysis aims at judging the alternative sites in terms of pedestrian and vehicular traffic passing a site.

500 3.64.000 60.000 5.000 60.000 1.000 10.000 20.) .000 10. freight and carriage Taxes and insurance Labour Water. power and fuel Total 34.000 Site A (Rs.000 8.000 4.000 20.00.000 34.500 70.000 2.) Site B (Rs.000 7.Comparative Costs of Alternative Locations Costs Cost of establishments: Land and Buildings Equipment Transport facilities Cost of operations: Materials.30.10.09.

f) Availability of skilled and non-skilled Labour and technically qualified and trained managers. public utilities. c) Transport costs-in obtaining raw material and also distribution or marketing finished products to the ultimate users. water. link roads. d) Access to market: small businesses in retail or wholesale or services should be located within the vicinity of densely populated areas. . b) Availability and nearness to the sources of raw material. airports or sea ports. nearness to railway stations. availability of electricity.SELECTION CRITERIA a) Natural or climatic conditions. civil amenities and means of communication are important. e) Availability of Infrastructural facilities such as developed industrial sheds or sites. especially for small scale businesses.

tax relief. Negative incentives are in form of restrictions for setting up industries in urban areas for reasons of pollution control and decentralization of industries.  k) Residence of small business entrepreneurs want to set up nearby their homelands . transport. banking. miscellaneous expenses.  h) Locations with links: to develop industrial areas or business centers result in savings and cost reductions in transport overheads.SELECTION CRITERIA  g) Banking and financial institutions are located nearby.  j) Government influences: Both positive and negative incentives to motivate an entrepreneur to choose a particular location are made available.  i) Strategic considerations of safety and security should be given due importance. subsidies and liberalization. Positive includes cheap overhead facilities like electricity.

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. The Pharma City is located close to lane ADB supported National No.Features of Pharma City  Development of 900 acres for Pharma City. The Pharma City has the benefit of South Asia¶s largest all weather sea port with extensive varied cargo handling facilities. The Pharma City is 0 Km from the Air Port and 0 Km from the Sea Port.5 that connects Chennai with Kolkatta. The proposed green field deep water sea port at Gangavaram and Special Economic one in 9 00 acres add value to the Pharma City.

Features of Pharma City The Pharma City has plans that takes care of Industrial water requirements from the river Godavari through the Yeleru canal.  This is being carried out in public private partnership mode by Visakhapatnam Industrial ater Supply Company Simhadri Power project with an installed capacity of 000 M located close by. 0/ / is . The Pharma City is being provided with a dedicated KV Electrical Sub station.

Features of Pharma City  Common Effluent Treatment Plant with marine out fall is being planned.  Marine outfall facility will be constructed into Bay of Km after studies relating Bengal at a distance of 0 to to Environmental aspects .

Therefore an appropriate location is essential to the efficient and economical working of a plant. In some cases. you will find that  location may contribute to even 0% of cost of manufacturing and marketing.  A firm may fail due to bad location or its growth and efficiency may be restricted.SIGNIFICANCE  location of a plant is an important entrepreneurial decision because it influences the cost of production and distribution to a great extent. .

PAL = Personnel Air Lock .PHARMACEUTICAL FECTORY LAYOUT AND PLANING Group Session ± modified layout 20Pa Sampling Rooom 30Pa 0Pa Service Corridor (contains Vacuum & R w supply) O ater Air Shower 20Pa 10Pa Warehouse MAL 2 Weigh Booth 20Pa Post Staging 30Pa 30Pa Tablet 1 15Pa Tablet 2 15Pa Liquids Mix 30Pa Softgel Capsule Packing 0Pa MAL1 Air Lock 15Pa 30Pa Clean Corridor Emergency Exit PAL 40Pa 20Pa 20Pa MAL 3 40Pa Sterile eyedrops dispensing & asceptic filling 60Pa Male Change 2 Female Change 2 10Pa 10Pa 15Pa 10Pa Packed Goods Quarantine Secondary Packing Primary Packing 20Pa 30Pa MAL 4 50Pa Change 50Pa Equipment Wash Male Change 1 Female Change 1 Air Lock 4 0Pa Service Room 0Pa 0Pa MAL = Material Air Lock.

undi.DEFINITION  Plant layout refers to the arrangement of physical facilities such as machinery. . equipment. ³the overall objective of plant layout is to design a physical arrangement that most economically meets the required output ± quantity and quality.´  According to J. ³Plant layout ideally involves allocation of space and arrangement of equipment in such a manner that overall operating costs are minimized. L. with in the factory building in such a manner so as to have quickest flow of material at the lowest cost and with the least amount of handling in processing the product from the receipt of material to the shipment of the finished product. furniture etc.  According to Riggs.

.  Minimizes material handling. use of space and expansion possibilities etc.  It is also important because it affects the flow of material and processes.  Safety .  promotes effective utilization of manpower. supervision and control.comfort at work. floor area and manufacturing process.An Ideal Plant Layout  should provide the optimum relationship among output.  It facilitates the production process. time and cost. and provides for employee¶s convenience. and allows flexibility of operations.  easy production flow. Labour efficiency. maximum exposure to natural light and ventilation. makes economic use of the building.

. . . . 5. 6. 7. 8. 9. 0. . . . . Proper and efficient utilization of available floor space To ensure that work proceeds from one point to another point without any delay Provide enough production capacity. Reduce material handling costs Reduce hazards to personnel Utilise Labour efficiently Increase employee morale Reduce accidents Provide for volume and product flexibility Provide ease of supervision and control Provide for employee safety and health Allow ease of maintenance Allow high machine or equipment utilization Improve productivity

An entrepreneur must possess an expertise to lay down a proper layout for new or existing plants. It differs from plant to plant, from location to location and from industry to industry. But the basic principles governing plant layout are more or less same.

Classification plant layout
1. Manufacturing units . Traders . Service Establishments

Manufacturing units
In case of manufacturing unit, plant layout may be of four types: 
Product or line layout  Process or functional layout  Fixed position or location layout  Combined or group layout

.Manufacturing units (a) Product or line layout: Under this. The materials move form one workstation to another sequentially without any backtracking or deviation. machines and equipments are arranged in one line depending upon the sequence of operations required for the product. Under this. the output of one machine becoming input of the next. machines are grouped in one sequence. Therefore materials are fed into the first machine and finished goods travel automatically from machine to machine.

10/17/2008 .Slide 20 RS1 Ritesh Shah.

I and Excipient  Granulating  Tablet Press  Tablet Coater  Laser Drilling and Packaging .Manufacturing units (a) Product or line layout: Product or line layout of CR Osmotic Tablets  Obtain raw material  Mix.P. A.

Manufacturing units (a) Product or line layout: PRINCIPLES  All the machine tools or other items of equipments must be placed at the point demanded by the sequence of operations  There should no points where one line crossed another line.  All the operations including assembly.  Materials may be fed where they are required for assembly but not necessarily at one point. testing packing must be included in the line .

due to straight and short route and absence of backtracking  Smooth and uninterrupted operations  Continuous flow of work  Lesser investment in inventory and work in progress  Optimum use of floor space  Shorter processing time or quicker output  Less congestion of work in the process  Simple and effective inspection of work and simplified production control  Lower cost of manufacturing per unit .Manufacturing units (a) Product or line layout: Advantages  Low cost of material handling.

Manufacturing units (a) Product or line layout: Disadvantages  High initial capital investment in special purpose machine  Heavy overhead charges  Breakdown of one machine will hamper the whole production process  Lesser flexibility as specially laid out for particular product. Suitability: Product layout is useful under following conditions:      Mass production of standardized products Simple and repetitive manufacturing process Operation time for different process is more or less equal Reasonably stable demand for the product Continuous supply of materials .

Manufacturing units (b) Process or functional layout .

Manufacturing units (b) Process or functional layout .

Manufacturing units (b) Process or functional layout .

Manufacturing units (b) Process or functional layout .

Manufacturing units (b) Process or functional layout .

Manufacturing units (b) Process or functional layout .

Manufacturing units (b) Process or functional layout .

Manufacturing units (b) Process or functional layout .

Manufacturing units (b) Process or functional layout .

Manufacturing units (b) Process or functional layout .

Manufacturing units (b) Process or functional layout .

Manufacturing units (b) Process or functional layout .

Manufacturing units (b) Process or functional layout .

Manufacturing units (b) Process or functional layout .

Manufacturing units (b) Process or functional layout .

Manufacturing units (b) Process or functional layout .

Manufacturing units (b) Process or functional layout .

Manufacturing units (b) Process or functional layout PRINCIPLES  The distance between departments should be as short as possible for avoiding long distance movement of materials  The departments should be in sequence of operations  The arrangement should be convenient for inspection and supervision .

. There is high degree of machine utilization.Manufacturing units (b) Process or functional layout  Advantages: Process layout provides the following benefits  a) Lower initial capital investment in machines and equipments. as a machine is not blocked for a single product  b) The overhead costs are relatively low  c) Change in output design and volume can be more easily adapted to the output of variety of products  d) Breakdown of one machine does not result in complete work stoppage  e) Supervision can be more effective and specialized  f) There is a greater flexibility of scope for expansion.

jewelry.Manufacturing units (b) Process or functional layout Disadvantages: Product layout suffers from following drawbacks      a. Products are not standardized  .g. c. More skilled Labour is required resulting in higher cost. . Material handling costs are high due to backtracking b. process layout or functional layout is suitable for job order production involving non-repetitive processes and customer specifications and non standardized products. Job shop type of work is done  5. light and heavy engineering products. made to order furniture industries. More frequent inspection is needed which results in costly supervision Suitability: Process layout is adopted when  1. Machines are very expensive Thus. Quantity produced is small  . e. There are frequent changes in design and style of product  . tailoring. Time gap or lag in production is higher d. ork in progress inventory is high needing greater storage space e.

All facilities are brought and arranged around one work center.(c) Fixed Position or Location Layout  In this type of layout. The following figure shows a fixed position layout . the major product being produced is fixed at one location. Equipment Labour and components are moved to that location. This type of layout is not relevant for small scale entrepreneur.

 b) The layout is flexible as change in job design and operation sequence can be easily incorporated.  c) It is more economical when several orders in different stages of progress are being executed simultaneously. .(c) Fixed Position or Location Layout Advantages  a) It saves time and cost involved on the movement of work from one workstation to another.  d) Adjustments can be made to meet shortage of materials or absence of workers by changing the sequence of operations.

aircraft manufacturing. generators. the medicines. doctors and nurses are taken to the patient (product). dams. flyovers. wagon building. boilers.  Construction of building.  As several operations are often carried out simultaneously.(c) Fixed Position or Location Layout Disadvantages: Fixed position layout has the following drawbacks  Production period being very long. ships. Suitability: The fixed position layout is followed in following conditions  Manufacture of bulky and heavy products such as locomotives. etc.  Hospital. . capital investment is very heavy  Very large space is required for storage of material and equipment near the product. there is possibility of confusion and conflicts among different workgroups.

g. manufacturing plant. Generally.e. a combination of the product and process layout or other combination are found. Ventilation and Air-Conditioning (HVAC) heating. miscellaneous shops]. combined layout is followed. . in manufacturing concerns where several products are produced in repeated numbers with no likelihood of continuous production.(d) Combined layout  Certain manufacturing units may require all three processes namely intermittent process (job shops). In tablet. e. Thus. the machinery manufacturing tablet is arranged on the product line principle. only a product layout or process layout or fixed location layout does not exist. in practice. the continuous process (mass production shops) and the representative process combined process [i. for industries involving the fabrication of parts and assembly. but ancillary services such as Heating. the water treatment plant etc. In most of industries. the power house. while the assembly areas often employ the product layout. are arranged on a functional basis. fabrication tends to employ the process layout.

Hence. attractive colors. good lighting. the layout is essential for handling merchandise. modern design and arrangement and even music. There are three kinds of layouts in retail operations today. Thus. which is arranged as per the space available and the type and magnitude of goods to be sold keeping in mind the convenience of customers.e. Full service layout 3. air conditioning. Self service or modified self service layout 2. The customer is always impressed by service. customer appeal and greater business volume.2. customers usually buy in the one that is more appealing to them. efficiency and quality. good ventilation. customers are attracted and kept by good layout i. Traders  When two outlets carry almost same merchandise. All of these things mean customer convenience. 1. Special layouts .

which allows clients quick and convenient access to the facilities offered by a service establishment. hotels. In today¶s environment. efficiency in delivering services and pleasing office ambience. quality of service. restaurants. Services centers and establishment  Services establishments such as motels. must give due attention to client convenience. the clients look for ease in approaching different departments of a service organization and hence the layout should be designed in a fashion. .3.

air conditioning. product layout is better. Nature of product: product layout is suitable for uniform products whereas process layout is more appropriate for custom-made products. dust control. Type of machinery: General purpose machines are often arranged as per process layout while special purpose machines are arranged according to product layout . must be kept in mind. process layout is desirable.FACTORS INFLUENCING LAYOUT Factory building: The nature and size of the building determines the floor space available for layout. hile designing the special requirements. humidity control etc. e. Production process: In assembly line industries.g. In job order or intermittent manufacturing on the other hand.

ventilation and other aspects should be duly considered.g. light. washroom. e. if any.FACTORS INFLUENCING LAYOUT Repairs and maintenance: machines should be so arranged that adequate space is available between them for movement of equipment and people required for repairing the machines. Adequate safety arrangement should also be made. noise. the layout should be conducive to health and safety of employees. Thus. . It should ensure free and efficient flow of men and materials. lockers. toilets and other employee facilities. Human needs: Adequate arrangement should be made for cloakroom. paint shops and plating section should be located in another hall so that dangerous fumes can be removed through proper ventilation etc. proper provision should be made for disposal of effluents. drinking water. Future expansion and diversification may also be considered while planning factory layout. Plant environment: Heat.

product design. . fuel etc.  Deficiencies in the layout unnoticed by the layout engineer in the beginning.DYNAMICS OF PLANT LAYOUT  Revision in plant layout may become necessary on account of the following reasons:  Increase in the output of the existing product  Introduction of a new product and diversification  Technological advancements in machinery. processes. material.

employee facilities. liquid and semi solid dosage form.  A plant layout applies besides the grouping of machinery. storage etc.e.APPLICABILITY OF PLANT LAYOUT  Applicability of this layout is the manufacture of talcum powder.  Applicability of this layout is the manufacture of solid.  Applicability of this layout is the manufacture of sterile product. to an arrangement for other facilities as well. Thus. material is poured into the first machine at the top and powder comes out at the bottom of the machinery located on the ground floor. Such facilities include receiving and dispatching points. Here machinery is arranged vertically i. from top to bottom. . inspection facilities.

should be located in a place which is easily accessible to all the other departments in the plant. safety devices. there are the other industries or plants to which plant layout is applicable. The storeroom should be located close to the production. receiving and dispatching centers in order to minimize handling costs. the receiving and the dispatching departments should be at either end of the plant. collection and disposal of garbage. . Hence. drinking water facilities. can be a little away from other departments but should be within easy reach of the employees. scrap etc.APPLICABILITY OF PLANT LAYOUT  Generally. before dispatch. The inspection should be right next to other dispatch department as inspections are done finally.  The other employee facilities like toilet facilities.  The maintenance department consisting of lighting. first aid room. fire protection. cafeteria etc.

. It is a long-term strategic decision. which influence his decision. which refers to the selection of a particular site for setting up a business or factory.SUMMARY  observed that the entrepreneur has to make decisions regarding plant location. The efficiency of production depends on how well the various machines. which cannot be changed once taken. An ideal plant layout should provide the optimum relationship among the output. he has to go through the detailed locational analysis considering various factors. An optimum location can reduce the cost of production and distribution to a great extent. production facilities and amenities are located in a plant. Thus great care and appropriate planning is required to select the most appropriate location. floor area and manufacturing process. But before making such a choice.

Traders might go either for self service or full service or special layouts whereas service establishments such as motels. the layout should be conducive to health and safety of employees. At the end.g. improves productivity etc.  Plant layout is applicable to all types of industries or plants. allows flexibility of operation. Process. as the case may be. But basic principles to be followed are more or less same. production process.e. provides for employees convenience. hotels. From the point of view of plant layout. Designing of layout is different in all above three categories e. It should ensure free and efficient flow of men and materials. size of factory building. Future expansion and diversification may also be considered while planning factory layout. a small entrepreneur has to consider the factors like the nature of the product. manufacturing unit may follow one of Product.SUMMARY  An efficient plant layout is one that aims at achieving various objectives like efficient utilization of available floor space. The entrepreneurs must possess the expertise to lay down a proper layout for new or existing plants. we can classify small business into three categories i. minimizes cost. quality of service. and restaurants must give due attention to customer convenience. (a) manufacturing units (b) traders (c) service establishments. It differs from one plant to another. . efficiency in delivering the service etc. and fixed position or combined layout. human needs etc. hile deciding for layout for factory or unit or store.


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