PLANT LAYOUT

A plant layout study is an engineering study used to analyze different physical configurations
for an industrial plant.

Plant layout refers to the arrangement of physical facilities such as machines, equipment, tools,
furniture etc. 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 raw material to
the delivery of the final product.

Objectives of good Plant Layout:

• Proper and efficient utilization of available floor space
• Transportation of work from one point to another point without any delay
• Proper utilization of production capacity.
• Reduce material handling costs
• Utilize labour efficiently
• Reduce accidents
• Provide for volume and product flexibility
• Provide ease of supervision and control
• Provide for employee safety and health
• Allow easy maintenance of machines and plant.
• Improve productivity

TYPES OF LAYOUT:

(a) Product or line layout

(b) Process or functional layout
(c) Fixed position or location layout
(d) Combined or group layout

PRODUCT OR LINE LAYOUT:

In this type of layout the machines and equipments are arranged in one line depending upon the
sequence of operations required for the product. It is also called as line layout. The material
moves to another machine sequentially without any backtracking or deviation i.e the output of
one machine becomes input of the next machine. It requires a very little material handling.
It is used for mass production of standardized products.

Advantages of Product layout:

• Low cost of material handling, due to straight and short route and absence of backtracking
• Smooth and continuous operations
• Continuous flow of work
• Lesser inventory and work in progress
• Optimum use of floor space
• Simple and effective inspection of work and simplified production control
• Lower manufacturing cost per unit

Disadvantages of Product layout:

• Higher initial capital investment in special purpose machine (SPM).

• High overhead charges

• Breakdown of one machine will disturb the production process.

• Lesser flexibility of physical resources

PROCESS LAYOUT:

In this type of layout the machines of a similar type are arranged together at one place. This
type of layout is used for batch production. It is preferred when the product is not standardized
and the quantity produced is very small.

Advantages of Process layout:

• Lower initial capital investment is required.
• There is high degree of machine utilization, as a machine is not blocked for a single product
• The overhead costs are relatively low
• Breakdown of one machine does not disturb the production process.
• Supervision can be more effective and specialized.
• Greater flexibility of resources.

Disadvantages of Process layout:

• Material handling costs are high due to backtracking
• More skilled labour is required resulting in higher cost.
• Work in progress inventory is high needing greater storage space.
• More frequent inspection is needed which results in costly supervision

COMBINED LAYOUT:
A combination of process & product layout is known as combined layout. Manufacturing
concerns where several products are produced in repeated numbers with no likelihood of
continuous production, combined layout is followed

FIXED POSITION OR LOCATION LAYOUT:

Fixed position layout involves the movement of manpower and machines to the product which
remains stationary. The movement of men and machines is advisable as the cost of moving
them would be lesser. This type of layout is preferred where the size of the job is bulky and
heavy. Example of such type of layout is locomotives, ships, boilers, generators, wagon
building, aircraft manufacturing, etc.

Advantages of Fixed position layout:

• The investment on layout is very small.
• The layout is flexible as change in job design and operation sequence can be easily
incorporated.
• Adjustments can be made to meet shortage of materials or absence of workers by changing
the sequence of operations.

Disadvantages of Fixed position layout:

• As the production period being very long so the capital investment is very high.
• Very large space is required for storage of material and equipment near the product.
• As several operations are often carried out simultaneously so there is possibility of confusion
and conflicts among different workgroups.

Product Considerations

The intended products to be manufactured have an impact on the choice of layout.

 A fixed position layout would be chosen where large or unique items are worked on
individually, such as ship building or construction of a bridge.
 A functional layout is a multiple purpose layout designed to facilitate a variety of
products, a typical example of this is a hospital.
 A product layout focuses on maximising plant efficiency through techniques such
as mass production.
 A cellular layout seeks to gain the benefits of both the flexibility of a functional layout and
the efficiency product layout by grouping machines into autonomous work groups. This is
particularly utilised along side Just In Time systems.
 PLANT LOCATION

Plant location refers to the choice of region and the selection of a particular site for setting up a
business or factory. But the choice is made only after considering cost and benefits of different
alternative sites. It is a strategic decision that cannot be changed once taken. If at all changed
only at considerable loss, the location should be selected as per its own requirements and
circumstances. Each individual plant is a case in itself.

Businessman should try to make an attempt for optimum or ideal location.

The location of the plant can have a crucial effect on the overall profitability of a project, and the
scope for future expansion. Many factors must be considered when selecting a suitable plant
site. The principal factors are:
 Location, with respect to the marketing area
 Raw material supply
 Transport facilities
 Availability of labor
 Availability of suitable land
 Environmental impact and effluent disposal
 Local community consideration
 Climate
 Political and strategic consideration

Location analysis is a dynamic process where entrepreneur analyses and compares the
appropriateness or otherwise of alternative sites with the aim of selecting the best site for a
given enterprise. It consists the following:
(a) Demographic Analysis: It involves study of population in the area in terms of total
population (in no.), age composition, per capita income, educational level, occupational
structure etc.

(b) Trade Area Analysis: It is an analysis of the geographic area that provides continued
clientele to the firm. He would also see the feasibility of accessing the trade area from
alternative sites.

(c) Competitive Analysis: It helps to judge the nature, location, size and quality of competition
in a given trade area.

(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, the traffic analysis aims at judging the
alternative sites in terms of pedestrian and vehicular traffic passing a site.

(e) Site economics: Alternative sites are evaluated in terms of establishment costs and
operational costs under this. Costs of establishment is basically cost incurred for permanent
physical facilities but operational costs are incurred for running business on day to day basis,
they are also called as running costs.

Selection Criteria for Plant Location

• Natural or climatic conditions.

• Availability and nearness to the sources of raw material.
• Transport costs-in obtaining raw material and also distribution or marketing finished
products to the ultimate users.
• Access to market: small businesses in retail or wholesale or services should be located
within the vicinity of densely populated areas.
• Availability of Infrastructural facilities such as developed industrial sheds or sites, link
roads, nearness to railway stations, airports or sea ports, availability of electricity, water,
public utilities, civil amenities and means of communication are important, especially for
small scale businesses.
• Availability of skilled and non-skilled labour and technically qualified and trained
managers.
• Banking and financial institutions are located nearby.
• Locations with links: to develop industrial areas or business centers result in savings and
cost reductions in transport overheads, miscellaneous expenses.
• Strategic considerations of safety and security should be given due importance.
• Government influences: Both positive and negative incentives to motivate an
entrepreneur to choose a particular location are made available. Positive includes cheap
overhead facilities like electricity, banking transport, tax relief, subsidies and
liberalization. Negative incentives are in form of restrictions for setting up industries in
urban areas for reasons of pollution control and decentralization of industries.
• Residence of small business entrepreneurs want to set up nearby their homelands