1. Facility –Location & Layout
N.K.Agarwal

2. Plant Location
• Location of facilities involves commitment of
resources to a long range plan
• Need for selection of location
– Business newly started
– Existing business has outgrown the capacity of the original
facilities
– Volume of business or extent of market needs establishing
of branches
– Lease expires and the landlord does not renew the lease
– Other social or economic reasons e.g. Inadequate labour
supply, shifting of markets etc

3. Plant Location
• Proper selection of location for the plant ensures
– An easy and regular supply of
• Raw materials
• Labour force
– Efficient plant layout
– Proper utilisation of plant production capacity & related cost of
production
• Resulting into smooth and efficient working of the organisation

4. Steps in plant location
• National decision (within or outside the country)
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Political stability
Export & import policy
Currency and exchange rate
Cultural & economic peculiarities
Natural environment
• Selection of the region
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Availability of raw materials
Nearness to market
Availability of power
Transport facilities
Suitability of climate
Government policy
Competition among states

5. Steps in plant location
• Selection of locality or community
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Availability of labour
Civic amenities for workers
Existence of complementary & competing industries
Finance & research facilities
Availibility of water and fire fighting services
Local taxes & restrictions
Momentum of an early start
Personal factors
• Selection of exact site
– Soil, size & topography
– Disposal of waste

6. Off shore location
• Availibility of relatively cheaper labour appears to be
a lure to many manufacturers to establish plants in
foreign countries
• However, lower productivity of the labour can be a
contradicting factor
• Effect of capital productivity needs to be considered
also
• Many other costs like cost of materials, fuel, power,
equipment, credit, transportation, taxation etc have to
be also considered for striking a balance between the
various costs for the most economic decision

7. Plant Layout
• A floor plan for determining and arranging the
desired machinery and equipment of a plant
• It permits
–The quickest flow of materials in processing the product
•From the receipt of the raw materials to the shipment of
the finished product
–At the lowest cost, and
–With the least amount of handling

8. Critical factors
• Materials
– Type, availability, provision for storage and movement
• Product
– Type i.e. Heavy,light, wet operation (cement), market
demand (decision on machinery type)
• Workers
– Male, female (special needs), facilities
• Machinery
– Fixed or mobile position of men, machinery, job to decide
machinery layout-depending on type, volume of production

9. Critical factors
• Location
– Size and terrain decides type of building
– Location decides mode of transportation of raw material and
finished products
– Fuel requirement for the plant
– Future expansion provision
• Managerial policies
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Volume of production and expansion
Extent of automation
Making or buying decision
Rapid delivery to customers
Purchasing policy
Personnel policies

10. Process layout
• Grouping together of similar machines in one
department
• Material moves from one group of machines to the
other
• Movement over longer distance and along criss-cross
paths
• May also involve part finished inventory waiting
Best suited for intermittent type of production/light
and heavy industries

11. PRODUCTION SUB-SYSTEM
RAW MATERIALS
RECEIVING
OPERATION A
WIP
MATERIAL FLOW
STORAGE
FINISHED
GOODS
EDP
CONTROL
SYSTEMS
WIP
OPERATION D
SHIPPING
FINISHED GOODS
OPERATION B
WIP
WIP
OPERATION C
INFORMATION
FLOWS
INTERMITTENT FLOW PRODUCTION SYSTEM (JOB SHOP )

12. Process layout
• Advantages
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Reduced investment on machines, being general purpose machines
Greater flexibility in production
Better and more efficient supervision
Greater scope of expansion
Better utilisation of resources
Handling breakdown of equipment easier-jobs can be transferred
to other machines
– Full utilisation of machinery
• Limitations
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Difficulty in movement of materials
Layout requires more space
Difficulty in production control
Production time increased because of extra travel
Accumulation of work-in-process at different machines

13. Product layout
• Machines arranged in a line depending upon sequence of
operations
• Material moves in a line from the first machine to the
finished product on the last machine.
• Investment higher as compared to process layout
Better suited for standardised products on a mass
scale production. Ex chemicals,paper

14. PRODUCTION SUB-SYSTEM
RAW MATERIALS
RECEIVING
OPERATION B
STORAGE
OPERATION A
MATERIAL FLOW
EDP
CONTROL
SYSTEMS
OPERATION D
OPERATION C
SHIPPING
FINISHED GOODS
INFORMATION
FLOWS
CONTINUOUS FLOW PRODUCTION SYSTEM (FLOW SHOP)

15. Product layout
• Advantages
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Reduction in material handling cost due to mechanisation
Layout avoids production bottlenecks
Economy in manufacturing time
Better production control
Requires less floor area per unit of production
Work-in-progress in reduced
Early detection of mistakes
Limitations
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Layout inflexible
Layout expensive
Difficulty in supervision
Expansion is difficult
Any breakdown along the line can disrupt total production

16. Fixed position layout
• Movement of men & machinery to the product
• Product remains stationary
– Cost of moving product is high,being bulky
• Advantages
– Men/machinery can be moved for a wide variety of operations
producing different products
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Worker identifies himself with the product & takes pride when
the work is completed
• Investment on layout is small
• High cost & difficulty in transporting a bulky job avoided
Best suited for bulky & heavy products
ex.Ships, aero planes etc.

17. RAW MATERIALS
MACHINE &
EQUIPMENT
AIRCRAFT ASSEMBLY
LABOUR
FIXED POSITION OR STATIC LAYOUT
FINISHED PRODUCT
(AIRCRAFT)

18. Cellular manufacturing (CM) layout
• Grouping of machines into cells
• Cells function somewhat like product layout within a
larger shop or process layout
• Each cell in the cm formed to produce a single part /
a few parts
– All with common characteristics which usually requires
similar machines and settings
• Flow of parts within the cell can take many forms

19. U-Shaped Cell Layout
C
B
A
B
D
C
B
A
D
C
A
D
C
B
D
A
= work station

20. CM Layout
• Advantages
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Lower work-in-process inventories
Reduced material handling costs
Shorter flow times in production
Simplified production planning (men, material etc.)
Overall performance often increases by lowering production
costs & improving on-time delivery
– Improved quality
• Limitations
– Reduced manufacturing flexibility & potentially increased machine
downtime
– Duplicate pieces of machinery may be needed so as to avoid
movement of parts between cells

21. Combined layout
• Combination of product & process layout with an
emphasis on either
• Generally adopted in industry
• In fabrication plants including assembly, fabrication
tends to employ process layout while assembly areas
employ product layout
• It is the layout that produces the desired volumes of
products at least total cost

22. PRODUCT LAYOUT
RAW MATERIAL
F.P.
G.C.
H.T.
G.G.
FINISHED
PRODUCTS
(GEARS)
PROCESS LAYOUT
RAW MATERIAL
F.P.
G.C.
H.T.
G.G.
G.C.
F.P. = FORGING PRESS
G.C. = GEAR CUTTING
H.T. = HEAT TREATMENT FURNACE
G.G. = GEAR GRINDING MACHINE
COMBINATION LAYOUT OR HYBRID LAYOUT FOR GEAR MANUFACTURING

23. Service facility layout
• Generally, as in manufacturing
– Line layout preferred in high volume, standardised products
• Fast food service
– Process layout preferred in service operations also
• General offices, banks, general hospitals, municipal offices
etc.

24. SERVICE WAITING LINE MODULES
WAITING LINE
SERVICE
FACILITY
SINGLE CHANNEL,
SINGLE PHASE MODULE
WAITING LINE
SERVICE
FACILITY
MULTIPLE CHANNEL,
SINGLE PHASE MODULE
WAITING LINE
SERVICE FACILITY
SINGLE CHANNEL,
MULTIPLE PHASE MODULE
WAITING LINE
SERVICE
FACILITY
MULTIPLE CHANNEL,
MULTIPLE PHASE MODULE

25. Plant Layouts
• Plant layout has to provide for other facilities also
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Location for receiving and shipping departments
Storage
Inspection
Maintenance
Employee facilities
Others, as applicable to various plants
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Power generators
Water treatment plants
Oil tankers
Compressed air, Chilled water plants etc.

26. Layout Planning-Methodology
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Travel chart method
Load-distance analysis method
Systematic layout planning method
Analysing layouts with computers
– ALDEP(Automated Layout Designing Programme)
– CORELAP (COmputerised RElationship Layout Planning)
– CRAFT (Computerised Relative Allocation of Facilities
Technique)

27. References
• Production &Operations Management: Aswathappa
/ Bhat
• Modern Production / Operations Management:
Buffa / Sarin

28. Thank you

30. LOCATION THEORIES
• PRIMARY FACTORS
– INDUSTRIAL UNITS MATERIAL ORIENTED IF
THEIR MATERIAL TRANSPORTATION COST TO
THE UNIT IS HIGHER
– INDUSTRIAL UNITS MARKET ORIENTED WHEN
COST OF TRANSPORTING FINISHED PRODUCTS
TO MARKETS IS HIGHER
– CENTRES FLUSH WITH CHEAP AND SKILLED
LABOUR PULL INDUSTRIES TOWARDS THEM

31. LOCATION THEORIES
• SECONDARY FACTORS
– SOME OF THESE ATTRACT INDUSTRIES TO
CERTAIN AREAS FROM DIFFERENT PLACES
• CALLED AGGLOMERATING FACTORS
– WHEREAS SOME OTHERS CONTRIBUTE TO
THEIR DISPERSAL FROM ORIGINAL PLACES
• CALLED DEGGLOMERATING FACTORS

32. CRITICAL FACTORS
• TYPE OF INDUSTRY
– SYNTHETIC
• CONSTITUENT ELEMENTS COMBINING TO MAKE THE
FINAL PRODUCT E.G. CHEMICAL INDUSTRY
– ANALYTICAL
• CONVERSION OF RAW MATERIALS INTO VARIOUS
ELEMENTS E.G. PETROLEUM INDUSTRY
– CONDITIONING
• CHANGING IN SHAPE / FORM OR PHYSICAL PROPERTIES
E.G. FOUNDARY, METAL WORKING INDUSTRY
– EXTRACTIVE
• INVOLVING SEPARATION OF ONE ELEMENT FROM THE
OTHER E.G. METAL FROM IRON ORE
– EACH OF ABOVE FURTHER CLASSIFIED INTO
• INTERMITTENT INDUSTRIES
• CONTINUOUS INDUSTRIES

33. PRODUCT LAYOUT
• IMPORTANT CONSIDERATIONS
– ALL MACHINES PLACED AT POINTS DEMANDED BY
SEQUENCE OF OPERATION
– NO CROSSING OVER OF ONE LINE WITH THE OTHER
– MATERIALS MAY BE FED WHERE THEY ARE
REQUIRED FOR ASSEMBLY BUT NOT NECESSARILY
ALL AT ONE POINT
– ALL OPERATIONS INCLUDING ASSEMBLY, TESTING
AND PACKING INCLUDED IN THE LINE

34. PROCESS LAYOUT
• IMPORTANT CONSIDERATIONS
– DISTANCE BETWEEN DEPARTMENTS AS SMALL AS
POSSIBLE
– DEPARTMENTS TO BE LOCATED AS PER SEQUENCE
OF OPERATION
– CONVENIENCE FOR INSPECTION AS WELL AS
SUPERVISION

35. SERVICE FACILITY LAYOUT
• LAYOUT IMPORTANT TO ACHIEVE CLIENTCUSTOMER GOAL OF FAST SERVICE
– FAST SERVICE SUPPORTED BY POINT OF SALE SYSTEM,
SCANNERS, SELF SERVICE TO PROVIDE SPEED AS WELL
AS REDUCE COST, ATMs BY BANKS ETC.
• FLOW LINE APPROACH FOLLOWED IN FAST FOOD
SERVICE
• PROCESS LINE LAYOUT OCCURS IN MANY
SERVICES LIKE MEDICAL CLINICS, OFFICES ETC.

36. CELLULAR MANUFACTURING LAYOUT
CELL # 2
CELL # 1
1
2
1
3
5
2
4
PART B
1
2
4
PRODUCTION OPERATION
PART D
PART X
PART Y
1
PART A
3
CELL # 4
3
2
3
CELL # 3
PRODUCT OR MATERIAL FLOW

37. Group Technology Layout
A
A
C
C
C
B
A
D
B
C
D
A
D
D
B
B

38. Layout planning
• Need for future revisions caused due to expansions,
technological advances, improved layouts etc
• Major criteria for selecting and designing layouts
– Material handling cost
• Material handling costs minimised by using mechanised material
handling equipments
– Worker effectiveness
• Good layout provides workers with a satisfying job and permits
them to work more effectively at the highest skill level
• Good communication system and well placed supporting activity
locations important