What is plant location in production management. Plant Location: Importance, Techniques and Procedure 2022-10-22
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Factors Affecting Plant Location
However, the principle of overall integration should be considered while planning for the minimum distance moved. The prospective plant owner has to choose the site in such a way that labour should be present in adequate numbers with low cost. Manufacturing Plants Each supplying to a Specific Market Area. Site economics Alternative sites are evaluated in terms of establishment costs and operational costs under this. Here are explain; What do we think about Plant location decision? While weighing, we establish a percentage to represent the relative importance.
Plant Location: Importance, Techniques and Procedure
Site Evaluations The land is zoned correctly, infrastructure is in place, and everything else about the location is perfect. The objective of minimization of cost of production can achieve only when the plant is of the right size and at the right place where economies of all kinds in production are available. Deciding criteria for selection. Government provides various incentives and subsidies to entrepreneurs to start plants in rural areas instead of urban areas. What do we think about Plant location decision? Theories associated with Location 1. Climatic Conditions: ADVERTISEMENTS: With the developments in the field of heating, ventilating and air- conditioning, climate of the region does not present much problem. For example - In case of dairy milk products that are delivered on daily basis to their customers.
Large number of government of facilities will be easily available like-Post office, Banks, Railways, Police and Fire protection. Quantitative Techniques Operation Research Models : a Break-even analysis. The business would also see the feasibility of accessing the trade area from alternative sites. It is an important decision in the case of new entrepreneurs. Urban areas: Urban areas are the opposite to rural areas. The selection of a locality in a particular region is influence by the following factors: i Availability of Labour Despite the talk of mechanization and automation, the importance of labor on the industrial side has not been completely lost.
Now Total cost of production and distribution, i. While dealing with the economy of labor, the factors responsible are; The ratio of labor cost to total manufacturing cost. Production technology and cost structure The location of the plant will decide the type of production technology management adopt and the structure of cost. Mahadevan Location decision pertains to the choice of an appropriate geographical site for locating various manufacturing and services facilities of an organization. Availability of Labour: Stable labour force, of right kind, of adequate size number , and at reasonable rates with its proper attitude towards work are a few factors which govern plant location to a major extent. Repairing work may become difficult, because of less industry in the area. Examples are shoes, furniture, glassware industries.
Availability of Water: Water is used for processing, as in paper and chemical industries, and is also required for drinking and sanitary purposes. Service : a Steam, b Gas, c Water, d Air or high pressure, e Electricity, and f Sewerage. Excavation, stormwater drainage, and even the right kind of soil for your purposes can have a big impact on the bottom line. Seasonal labour is also easily obtained than in a smaller centre of population, specially where unskilled labour is required. What are the buying habits of local people, and what must be done to fit your service to these habits? Semi-quantitative Techniques Factor weight-rating system 4. Lower fuel and power supply cost.
Water and sewer lines are also must-haves but can be scarce in rural areas. When materials are small and of high unit price. Instead of schools, being close to existing infrastructure may be a requirement. Availability of Labour 5. The cost of land is less than in a city area and usually easier to provide space for future expansion. The type of labor required. For finding this, statistical analysis, questionnaire survey or other techniques may be employed.
Plant Layout in Production and Operation Management
Availability of safety facilities like fire- fighting, police etc. And, it is these strategies of which the location design is a product. Explain different parts: For economical analysis these factors play an important part: Following are the factors when an undertaking is located near the raw material site; When the source of raw material is likely the controlling factor. Hence climate is not healthy. Without sound and careful location planning in the beginning itself, the new facilities may create continuous operating problems in future. When Plant location decision in Different Situations, How to chose perfect? Physical factors One another importance of plant location decisions is that it helps the company to look over the other aspects also.
Facility location is a critical strategic decision. For example, the textile industries silk and carpet-making industries, sports goods, etc. More subsection about the spoilage. A right selection of a plant location can make and a wrong decision mar an organization. Step 1: Find the important factors.
What do we think about Plant location decision? in Different Situations
Once a mistake is made in locating a plant it becomes extremely difficult and costly to correct it. It is the place of maximum net advantage or which gives lowest unit cost of production and distribution. Even then steel industries are located near source of fuel coal to cut down the fuel transportation costs. In other words, places with well-developed means of transport attract industries. When materials are bulky and of relatively low price.
Competitive Analysis It helps to judge the nature, location, size and quality of competition in a given trade area. The Government of India has been influencing plant location in a number of ways. It is sometimes possible that all the requirements and features of ideal site may not be available at one particular location but then it will be advantageous to find out suitable site with combinations of all essential requirements of the particular industry to be established as explained in following paras. Selection of Site As Per Area: Broadly, the area can be classified as rural, suburban and urban area. If it saves a few bucks by positioning their plant in an advantageous location, it makes smart financial sense to take the time to find the right piece of land. Healthy surrounding and pleasant atmosphere.
