References .
. .
,
Handling. 2. Richard L. Francis, Facility Layout and Location. 3. Chandrashekar Hiregoudar, etal. Facility Planning and Layout Design. 4. Dr-Ing. Daniel Kitaw, Industrial Management and Engin Enginee eeri ring ng Econ Econom omy. y.
OUTLINE
Definitions
Plan Plantt Loca Locati tioon o
Site Selection
o
Location Economics
o
o
e ec ng an n r an Site Selection Process
ura
reas
OUTLINE-cont’d
Objective of a good plant
Principles of plant layout
Definitions
A plant is a place
Where men , materials , money , equipment , machinery , etc . are brought together for
.
CONT’D
Plant location means deciding a suitable
location, area, place, etc. where the plant or ac ory w
s ar
unc on ng.
CONT’D Plant
layout means the disposition of the
various facilities (equipments, materials, manpower, e c. an
serv ces o
within the area of the site selected.
e p an
CONT’D Problems of layout develop when needed: •
To start a new roduct,
•
To change the product design,
•
To reduce the cost; And when
•
•
•
•
The market demand chan es The plant, the product, the building become obsolete, Accidents occur re uentl The working environment is poor.
Plant Location Choice
of general area or region.
Choice
of site within the area selected.
CONT’D Location
decision is based on the organizations long-
,
,
resource availability and financial strategies .
Plant location is important because: . •
Location influences capital investment and operating costs.
CONT’D
Need for location decision: .
Expansion of existing facility.
growing volume of business. due to new development. ,
,
a change of location of the existing facility.
CONT’D Plant
location plays a major role in the design
of a production system as it determine the
Getting suitable raw materials;
Processing raw material to finished goods; and .
Site Selection
The problem of the selection of a factory or a plant can be solved in the following two stages: b) The Selection of a Particular site.
CONT’D a) General Location of the plant
Availability of Raw Materials
Availability of Water
Proximity to Markets
Avai a i ity o Capita
Social and Facilities
Business Facilities
Existence Industries
Transport
Facility
Cheap Labour
Availability of Power and Fuel
Climatic and Conditions
Atmospheric
Recreational
and of
Other factors …
Commercial related
CONT’D b) Specific Site Selection
Communit Attitude
Community To
Facilities
o ra h
Transportation Waste
Dis osal
Ecology Size
Facilities
and Pollution
of Land
Supporting
Industries
Theories of Industrial Location
All are emphasize on the search for suitable location which offers the greatest difference between total costs and total revenue.
Some im ortant theories on industrial location are:
Theory of Maximum Profit Location
Location Analogue Model
Theory of Least-Cost Location
Linear Programming Techniques
Weber’s Theory of Location
Theory of Location by Sargent
Theory of Location by Predohl and others
Theory of Location by Losch and Walter Israd
Location Economics
For evaluation of economical location following factors should be considered: a
Raw materia procurement
b) Proximity to market c)
Availability of labour
Fixed cost
d) Availability of power e)
Availability of finance
f)
Miscellaneous considerations (donations, subsidies, taxes and noninter erence
y government or oca
o ies, war an
effects and other facilities or bottlenecks)
po itica
CONT’D
The principle of industrial plant location is that
the
sum
of manufacturing and
s r u ng cos s ou the best location.
e a m n mum
or
CONT’D a)
Factors for locating an undertaking near the raw material size: •
•
•
•
•
en source o raw ma er a s s
e con ro ng ac or,
When materials are bulky and of relatively low price, en ma er a s are sma an o
g un
r ce,
When raw materials are greatly reduced in bulk during , When raw materials are perishable and process makes the less erishable.
CONT’D b) Factors for locating an industry near to
•
When the size or bulk of the
roduct is
more, •
•
Render it more fragile, .
CONT’D c) Factors related to the economy of labour: manufacturing cost, •
Possibility of reduction in labour cost by labour,
•
The type of labour required.
CONT’D d) Economy and availability of power e
er
ma or
ac or
a
availabilit of finance f) Miscellaneous considerations
n uence
Location Alternatives
Various costs Total and other considerations have been Cost-1= 8,219,500 Birrlisted below as regards to locations 2. Its required to determine Total1 and Cost-2= 8,432,000 Birrthe over all best oca on.
Location-1 (Birr)
Location-2 (Birr)
Costs of
Location-1 (Birr)
Location-2 (Birr)
Costs of
a) Land
1,100,000
1,000,000
h) Raw Material and 1,450,000 o er supp es
1,400,000
b) Building
3,500,000
3,800,000
i) Taxes
400,000
300,000
c) Water
9,500
12,000
j) Community
Good
d) Power
500,000
800,000
e) Labour
600,000
500,000
k) Community attitude
Alright
l Housin facilities
Ver
f Frei ht In-coming Out-going
230,000 310,000
220,000 300,000
m) Cost of Living
High
g) Fuel
120,000
100,000
n) Community Size
Small
• •
Excellent
Encouraging
ood Good Normal
Medium
Location Alternatives rom
e
o ow ng
a a se ec
e mos a van ageous oca on or
setting a plant for making Aluminum Extrusion Plant osts o a) Total initial investment b) Total expected sales for the eriod
Lebu Akaki rr rr n in mln mln 9
9
9
R.O.R = 4.5
5
4.5
Costs of f) Wage and Salaries
. . 0.4
d) Raw material ex ense
1.5
=
.
i) Employee R.O.R for Akaki housing = 30% facilities 1.0 2.0
0.4
0.3
Akaki Birr in mln
0.35
0.3
0.5
0.4
0.3
0.4
Good Excellent
Sululta Birr in mln
Alri ht
0.6
Total R.O.R for Sululta = 5.6% 0.3
Lebu Birr in mln
g) Other Total Investment expenses h) Community
c) Distribution expense
e) Power and Water supply expenses
Sululta rr n mln
0.5
Expense
Alright
Alright
2.95
2.3
Poor
4
Economic Factors a) Product - Nature, Volume, value. –
,
.
c) Manufacturing machinery d) Services – Electricity, Water, Sewerage, steam, air.
Selecting the plant site in city(Urban site) van ages •
A city is very well connected by rails, roads and air.
•
It provides a good market also.
•
Right labour force is available.
•
•
ower an
a er s eas y ava a e.
It has good hospitals, marketing centers, Schools, Banks, etc. .
•
•
Workers training classes and many other educational facilities can be cites.
•
Services of experts and specialist are easily available.
•
Many other small industries are existing
•
Security
CONT’D Disadvantages •
Land available for the buildin is limited in area
•
Cost of land and building construction is high
•
Local taxes, etc … are high
•
La our sa aries are ig
Selecting the plant site in a small town (Rural area)
Advantages •
Plenty of land is available for building construction and ex ansion ur oses
•
Land is cheap
•
Cheap labour force
•
•
Less tax and restriction
CONT’D Disadvantages •
•
e
a our s no ava a e
Rail, road and air links may not be there at all or may not be adequate
•
Site Selection Process The following procedures are recommended: . 2. Analyze the problem 3. Search for alternative solutions . 5. Select the preferred design 6. Specify the solution
OBJECTIVES OF A GOOD PLANT •
Ensure effective space utilization,
•
transports), •
to a rational master plan, create job satisfaction, and .
Development stimulating layout problem PRODUCT DESIGN
NEW PRODUCT
BUILD NEW PLANT
MARKET DEMAND CHANGE
OBSOLETE FACILITIES
MOVE TO EXISTING PLANT
POOR WORKER ENVIR.
REARRANGE EXISTING LAYOUT
Classes of layout problem Cause and result occur frequently Cause and result occur less frequently Cause and result occur occasionally Cause and result occur very seldom
MARKET RELOCATION
MINOR CHANGES
COST REDUCTION
PRINCIPLES OF A GOOD PLANT LAYOUT •
•
•
•
•
•
Overall integration of factors n mum movement Uni-directional Effective use of available space ax mum v s
y
Maximum accessibility
TYPES OF LAYOUT •
From the point of view of plant layout, we can c assi y
usiness
or
cate ories: 1. Manufacturing units 2. Traders .
units
into
t ree
CONT’D Manufacturing units , four types: a) Product or line layout c) Fixed position or location layout d) Combined or group layout
CONT’D Product or line layout •
In this type of layout, only one product or one .
•
The
product
must
be standardized and
manufactured in large quantities in order to .
CONT’D •
The raw material moves very fast from one wor station to ot er stations wit a minimum work
in
handling.
ro ress
stora e
and
material
CONT’D The grouping of machines should be done keeping in mind the following general principles: a) All the machine tools or other items of equipments must be placed at the point demanded by the sequence of operations
b) There should no points where one line crossed another line. but not necessarily at one point. , included in the line
,
CONT’D Product A Department
s l a i r e t a w a R
1
Mill
Grind
Inspect
2
3
4
5
6
7
Paint
Pack
Heat treat
Press
1 Cast
Grind
Drill
2
3
4
5
Mill
Paint
Product B Department
Inspect
6
7
Pack
d o o G e d r e t h S s i n i F
CONT’D •
Specialized equipment
•
High capital intensity & wide use of automation
•
Processin rates are faster
•
Material handling costs are lower
•
Less space required for inventories
•
Less volume or desi n flexibilit
CONT’D Some o t e advantages o pro uct ayout are: lower total material handling cost, lower total production time, less work in process, greater incentive for groups of workers to raise level of performance, less floor area required per unit of production and greater simplicity of production control, fewer contro recor s nee e an ower accounting cost. •
•
•
•
•
•
CONT’D ome o •
e
sa van ages o
ro uc ayou are:
High initial capital investment in special purpose machine
•
Breakdown of one machine will hamper the whole production process
•
product.
CONT’D Product Layout is useful under the following conditions •
Mass production of standardized products
•
Simple and repetitive manufacturing process
•
pera on me or
eren proce
more or e
•
Reasonably stable demand for the product
•
Continuous supply of materials
•
operations,
equa
CONT’D
Process or Functional Layout •
Similar equipment and similar operations are grouped
oge er n •
e process or unc ona ayou .
It is articularly useful where low volume is required.
CONT’D The grouping of machines according to the process has to be done keeping in mind the following principles •
The distance between departments should be as short as
ossible for avoidin
lon
distance movement of
materials
•
The arrangement should be convenient for inspection and supervision
CONT’D Tailoring, light and heavy engineering products, made to order furniture industries.
CONT’D Foundry Dept.
s l a i r e t a m a R
1
1 Press Dept.
Product A Product B
Drilling Dept.
Grinding Dept.
4 4 3
Brazing Dept. Inspection Dept.
5
7 8
6
Heat treat Dept. Painting Dept.
2 Milling Dept.
7 Packing Dept.
e r o s d o o G d e h s i n i F
CONT’D Some of the Advantages of Process Layout are: •
•
•
less duplication of equipment, equipment, hence lower investment investment cost, gr great eater exi exi i ity o pro pro ucti ction, on, better and more efficient efficient supervision, supervision,
•
performance, •
•
•
bett better er cont contro roll o com com lica licate ted d or reci recisi sion on roce rocess sses es Breakdown of one machine does not result in complete work stoppage Change in output design and volume can be more easily adapted to the output of variety of products
CONT’D ome o t e
isa vantages o
rocess ayout are:
•
Material handling costs costs are high due due to backtracking
•
More skilled skilled labour labour is required required resulting resulting in higher cost.
•
Work in progress inventory is high needing greater storage space
•
More freq requent ent insp nspecti ectioon is nee needed ded whic which h resu resullts in costly supervision
CONT’D Process Layout is useful under the following conditions •
•
•
Quantity produced is small There are frequent changes in design and style of roduct
•
Job shop type of work is done
•
Machines are very expensive
CONT’D •
In this type of layout, the material or major component remains in a fixed location , and tools, machinery, men as well as other pieces of material are brought to this location.
•
Typical
examples
are
ship
building,
construction
industries, aircraft building and bench work exercises. •
enterprises.
CONT’D ome o •
e
van ages o
xe
os on ayou are:
It saves time and cost involved on the movement of work from one work station to another.
•
The layout is flexible as change in job design and operation sequence can be easily incorporated.
•
It is more economical when several orders in different stages of progress are being executed simultaneously.
•
Ad ustments can be made to meet shorta e of materials or absence of workers by changing the sequence of operations.
CONT’D ome o t e •
isa vantages o
ixe
osition ayout are:
Production period being very long, capital investment is very heavy
•
Ver
ar e s ace is re uired or stora e o
ateria and
equipment near the product. •
s
severa
opera ons
are
o en
carr e
ou
simultaneously, there is possibility of confusion and conflicts among different workgroups.
CONT’D Fixed Position Layout is useful under the following conditions •
Manufacture of bulky and heavy products such as ,
,
,
,
manufacturing, etc. •
•
Construction of building, dams, etc. Hospital, the medicines, doctors and nurses are taken to the patient (product).
CONT’D •
Certain manufacturing units may require all three processes namely intermittent rocess (job shops), the continuous process (mass production shops) and the representative process combine
•
rocess [i.e. miscellaneous shops].
Combination of the product and process layout or other combination are found, in practice, e.g. for industries involving the fabrication of parts and assembly, fabrication tends to employ the process layout, while the assembly areas often employ the product layout.
TRADERS •
When two outlets carry almost same merchandise, customers usually buy in the one that is more appealing to them.
•
Thus customers are attracted and ke t b
ood la out
i.e. good lighting, attractive colors, good ventilation, air conditionin
modern desi n and arran ement and even
music. , appeal and greater business volume.
CONT’D ,
•
efficiency and quality . •
There are three kinds of layouts in retail operations . 1. Self service or modified self service layout 2. Full service layout .
pec a ayou s
SERVICES CENTERS AND ESTABLISHMENT •
ervices esta is ments suc as an s, nsurance,
ote s,
Hotels, Restaurants, must give due attention to client convenience, quality of service, efficiency in delivering services and pleasing office ambience. •
In today’s environment, the clients look for ease in organization and hence the layout should be designed in a , the facilities offered by a service establishment.
STUDY OF PLANT LAYOUT •
The solution of any size and type of plant layout pro ems cou
e ac
a e
y us ng a y ema c
and logical approach . •
An early pioneer in this area was Richard Muther, methodology.
CONT’D eS •
proce ure ea s t e p anner t roug
Abstraction
(Analysis): Gathering
appropriate
information and analyzing the flow of materials and diagram . •
pace
cons erat ons w en
com ne
wt
t e
relationship diagram develop the space relationship diagram .
CONT’D •
earc
or poss
e so ut on :
e overa
ayout s
designed by combining space consideration with the relationship diagram. •
The search hase is the hase in which alternative layouts are developed by examining the space such as materials handling, storage facilities, site con
ons an surroun ngs, u
ng ypes, personne
convenience, etc., and practical limitations .