FACILITY LOCATION AND LAYOUT

INTRODUCTION
Plant location or the facilities location problem is an important strategic level decision making for an organisation. One of the key features of a conversion process (manufacturing system) is the efficiency with which the products (services) are transferred to the customers. The selection of location is a key-decision as large investment is made in building plant and machinery. As, it is not possible to change the location very often, an improper location of plant may lead to waste of all the investments made in building and machinery, equipment. Before a location for a plant is selected, long range forecasts is to be made anticipating future needs of the company. The plant location is to be based on the companys expansion plan and policy, diversification plan for the products, changing market conditions, the changing sources of raw materials and many other factors that influence the choice of the location decision. The purpose of the location study is to find an optimum location one that will result in the greatest advantage to the organization.

NEED FOR SELECTING A SUITABLE LOCATION The need for selecting a suitable location arises because of three situations
I. When starting a new organisation, i.e., location choice for the first time. II. In case of existing organisation. III. In case of Global Location.

Location Choice for the First Time or New Organisations

Cost economies are always important while selecting a location for the first time, but should keep in mind the cost of long-term business/ organisational objectives. The following are the factors to be considered while selecting the location for the new organisations:
1. Identification of region:
The organisational objectives along with the various long-term considerations about marketing, technology, internal organisational strengths and weaknesses, region specific resources and business environment, legalgovernmental environment, social environment and geographical environment suggest a suitable region for locating the operations facility.

2. Choice of a site within a region:

Once the suitable region is identified, the next step is choosing the best site from an available set. Choice of a site is less dependent on the organisations long-term strategies. Evaluation of alternative sites for their tangible and intangible costs will resolve facilities-location problem

3. Dimensional analysis:
Dimensional analysis consists in computing the relative merits (cost ratio) for each of the cost items for two alternative sites. For each of the ratios an appropriate weightage by means of power is given and multiplying these weighted ratios to come up with a comprehensive figure on the relative merit of two alternative sites,

Location Choice for the First Time or New Organisations

When starting a new factory, plant location decisions are very important because they have direct bearing on factors like, financial, employment and distribution patterns. In the long run, relocation of plant may even benefit the organization.. Location of warehouses and other facilities are also having direct bearing on the operational performance of organizations. The existing firms will seek new locations in order to expand the capacity or to place the existing facilities. When the demand for product increases, it will give rise to following decisions:
Whether to expand the existing capacity and facilities. Whether to look for new locations for additional facilities. Whether to close down existing facilities to take advantage of some new locations

Location Choice for Existing Organisation

In this case a manufacturing plant has to fit into a multi-plant operations strategy. That is, additional plant location in the same premises and elsewere under following circumstances:
1. Plant manufacturing distinct products. 2. Manufacturing plant supplying to specific market area. 3. Plant divided on the basis of the process or stages in manufacturing. 4. Plants emphasizing flexibility.

Location Choice for Existing Organisation The different operations strategies under the above circumstances could be: 1. Plants manufacturing distinct products:
Each plant services the entire market area for the organization. This strategy is necessary where the needs of technological and resource inputs are specialized or distinctively different for the different product-lines. For example, a high quality precision product-line should not be located along with other product-line requiring little emphasis on precision. Product specialization may be necessary in a highly competitive market. It may be necessary to exploit the special resources of a particular geographical area. The more decentralized these pairs are in terms of the management and in terms of their physical location, the better would be the planning and control and the utilization of the resources.

Location Choice for Existing Organisation

2. Manufacturing plants supplying to a specific market area:
Here, each plant manufactures almost all of the companys products. This type of strategy is useful where market proximity consideration dominates the resources and technology considerations.

3. Plants divided on the basis of the process or stages in manufacturing:

Each production process or stage of manufacturing may require distinctively different equipment capabilities, labour skills, technologies, and managerial policies and emphasis.

4. Plants emphasizing flexibility:

This requires much coordination between plants to meet the changing needs and at the same time ensure efficient use of the facilities and resources. In any facility location problem the central question is: Is this a location at which the company can remain competitive for a long time?

Location Choice for Existing Organisation

For an established organization in order to add on to the capacity, following are the ways:
(a) Expansion of the facilities at the existing site: This is acceptable when it does not violate the basic business and managerial outlines, i.e., philosophies, purposes, strategies and capabilities.
For example, expansion should not compromise quality, delivery, or customer service.

(b) Relocation of the facilities (closing down the existing ones): This is a drastic step which can be called as Uprooting and Transplanting. Unless there are very compelling reasons, relocation is not done.
The reasons will be either bringing radical changes in technology, resource availability or other destabilization.

All these factors are applicable to service organizations, whose objectives, priorities and strategies may differ from those of hardcore manufacturing organizations.

Global Location
Because of globalisation, multinational corporations are setting up their organizations in India and Indian companies are extending their operations in other countries. In case of global locations there is scope for virtual proximity and virtual factory. VIRTUAL PROXIMITY
With the advance in telecommunications technology, a firm can be in virtual proximity to its customers. For a software services firm much of its logistics is through the information/ communication pathway Logistics is certainly an important factor in deciding on a location whether in the home country or abroad. Markets have to be reached. Customers have to be contacted. Hence, a market presence in the country of the customers is quite necessary.

VIRTUAL FACTORY
The Indian BPO firm is a foreign-based companys virtual service factory. So a location could be ones own or ones business associates. The location decision need not always necessarily pertain to own operations.

REASONS FOR A GLOBAL/FOREIGN LOCATION

A. Tangible Reasons The tangible reasons for setting up an operations facility abroad could be as follows: Reaching the customer:
One obvious reason for locating a facility abroad is that of capturing a share of the market expanding worldwide. The phenomenal growth of the GDP of India is a big reason for the multinationals to have their operations facilities in our country. An important reason is that of providing service to the customer promptly and economically which is logistics-dependent. Therefore, cost and case of logistics is a reason for setting up manufacturing facilities abroad. By logistics set of activities closes the gap between production of goods/services and reaching of these intended goods/services to the customer to his satisfaction. Reaching the customer is thus the main objective. The tangible and intangible gains and costs depend upon the company defining for itself as to what that reaching means. The tangible costs could be the logistics related costs; the intangible costs may be the risk of operating in a foreign country. The tangible gains are the immediate gains; the intangible gains are an outcome of what the company defines the concepts of reaching and customer for itself.

REASONS FOR A GLOBAL/FOREIGN LOCATION

B. Intangible Reasons The intangible reasons for considering setting up an operations facility abroad could be as follows:
1. Customer-related Reasons
(a) With an operations facility in the foreign country, the firms customers may feel secure that the firm is more accessible. Accessibility is an important service quality determinant. (b) The firm may be able to give a personal touch. (c) The firm may interact more intimately with its customers and may thus understand their requirements better. (d) It may also discover other potential customers in the foreign location.

2. Organisational Learning-related Reasons

(a) The firm can learn advanced technology. For example, it is possible that cutting-edge technologies can be learn by having operations in an technologically more advanced country. The firm can learn from advanced research laboratories/universities in that country. Such learning may help the entire product-line of the company. (b) The firm can learn from its customers abroad. A physical location there may be essential towards this goal.

REASONS FOR A GLOBAL/FOREIGN LOCATION

B. Intangible Reasons
2. Organisational Learning-related Reasons (contd.)
(c) It can also learn from its competitors operating in that country. For this reason, it may have to be physically present where the action is. (d) The firm may also learn from its suppliers abroad. If the firm has a manufacturing plant there, it will have intensive interaction with the suppliers in that country from whom there may be much to learn in terms of modern and appropriate technology, modern management methods, and new trends in business worldwide.

3. Other Strategic Reasons

(a) The firm by being physically present in the host country may gain some local boy kind of psychological advantage. The firm is no more a foreign company just sending its products across international borders (b) The firm may avoid political risk by having operations in multiple countries. (c) By being in the foreign country, the firm can build alternative sources of supply. (d) The firm could hunt for human capital in different countries by having operations in those countries. Thus, the firm can gather the best of people from across the globe. (e) Foreign locations in addition to the domestic locations would lower the market risks for the firm.

FACTORS INFLUENCING PLANT LOCATION/FACILITY LOCATION

Facility location is the process of determining a geographic site for a firms operations.
proximity to customers and suppliers, labour costs, transportation costs.

Location conditions are complex and each comprises a different Characteristic of

a tangible (i.e. Freight rates, production costs) and non-tangible (i.e. reliability, Frequency security, quality) nature. Location conditions are hard to measure. Tangible cost based factors such as wages and products costs can be quantified precisely into what makes locations better to compare. non-tangible features, which refer to such characteristics as reliability, availability and security, can only be measured along an ordinal or even nominal scale. Other non-tangible features like the percentage of employees that are unionized can be measured as well. To sum this up nontangible features are very important for business location decisions.

It is appropriate to divide the factors, which influence the plant location or facility location on the basis of the nature of the organisation as: 1. General locational factors, which include controllable and uncontrollable factors for all type of organisations. 2. Specific locational factors specifically required for manufacturing and service organisations. Location factors can be further divided into two categories:
Dominant factors are those derived from competitive priorities (cost, quality, time, and flexibility) and have a particularly strong impact on sales or costs. Secondary factors also are important, but management may downplay or even ignore some of them if other factors are more important.

General Locational Factors

Following are the general factors required for location of plant in case of all types of organisations.
CONTROLLABLE FACTORS
1. Proximity to markets 2. Supply of materials 3. Transportation facilities 4. Infrastructure availability 5. Labour and wages 6. External economies 7. Capital. 8. Government policy 9. Climate conditions 10. Supporting industries and services 11. Community and labour attitudes 12. Community Infrastructure.

UNCONTROLLABLE FACTORS

CONTROLLABLE FACTORS
1. Proximity to markets: Every company is expected to serve its customers by providing goods and services at the time needed and at reasonable price organizations may choose to locate facilities close to the market or away from the market depending upon the product. When the buyers for the product are concentrated, it is advisable to locate the facilities close to the market. Locating nearer to the market is preferred if
The products are delicate and susceptible to spoilage. After sales services are promptly required very often. Transportation cost is high and increase the cost significantly. Shelf life of the product is low.

Nearness to the market ensures a consistent supply of goods to customers and reduces the cost of transportation. 2. Supply of raw material: It is essential for the organization to get raw material in right qualities and time in order to have an uninterrupted production. This factor becomes very important if the materials are perishable and cost of transportation is very high. General guidelines suggested by Yaseen regarding effects of raw materials on plant location are:
When a single raw material is used without loss of weight, locate the plant at the raw material source, at the market or at any point in between. When weight loosing raw material is demanded, locate the plant at the raw material source. When raw material is universally available, locate close to the market area. If the raw materials are processed from variety of locations, the plant may be situated so as to minimize total transportation costs.

Nearness to raw material is important in case of industries such as sugar, cement, jute and cotton textiles.

CONTROLLABLE FACTORS
3. Transportation facilities:
Speedy transport facilities ensure timely supply of raw materials to the company and finished goods to the customers. The transport facility is a prerequisite for the location of the plant. There are five basic modes of physical transportation, air, road, rail, water and pipeline. Goods that are mainly intended for exports demand a location near to the port or large airport. The choice of transport method and hence the location will depend on relative costs, convenience, and suitability. Thus transportation cost to value added is one of the criteria for plant location.

4. Infrastructure availability:
The basic infrastructure facilities like power, water and waste disposal, etc., become the prominent factors in deciding the location. Certain types of industries are power hungry e.g., aluminum and steel and they should be located close to the power station or location where uninterrupted power supply is assured throughout the year. The nonavailability of power may become a survival problem for such industries. Process industries like paper, chemical, cement, etc., require continuous. Supply of water in large amount and good quality, and mineral content of water becomes an important factor. A waste disposal facility for process industries is an important factor, which influences the plant location

CONTROLLABLE FACTORS 5. Labour and wages:

The problem of securing adequate number of labour and with skills specific is a factor to be considered both at territorial as well as at community level during plant location. Importing labour is usually costly and involve administrative problem. Prevailing wage pattern, cost of living and industrial relation and bargaining power of the unions forms in important considerations.

6. External economies of scale:

External economies of scale can be described as urbanization and locational economies of scale. It refers to advantages of a company by setting up operations in a large city while the second one refers to the settling down among other companies of related Industries. In the case of urbanization economies, firms derive from locating in larger cities rather than in smaller ones in a search of having access to a large pool of labour, transport facilities, and as well to increase their markets for selling their products and have access to a much wider range of business services.

CONTROLLABLE FACTORS

7. Capital:
By looking at capital as a location condition, it is important to distinguish the physiology of fixed capital in buildings and equipment from financial capital. Fixed capital costs as building and construction costs vary from region to region. But on the other hand buildings can also be rented and existing plants can be expanded.

UNCONTROLLABLE FACTORS
8. Government policy:
The policies of the state governments and local bodies concerning labour laws, building codes, safety, etc., are the factors that demand attention. In order to have a balanced regional growth of industries, both central and state governments in our country offer the package of incentives to entrepreneurs in particular locations.
The incentive package may be in the form of exemption from a safes tax and excise duties for a specific period, soft loan from financial institutions, subsidy in electricity charges and investment subsidy. Some of these incentives may tempt to locate the plant to avail these facilities offered.

9. Climatic conditions:
The geology of the area needs to be considered together with climatic conditions (humidity, temperature). Climates greatly influence human efficiency and behaviour.
Some industries require specific climatic conditions e.g., textile mill will require humidity.

10. Supporting industries and services:

Now a day the manufacturing organisation will not make all the components and parts by itself and it subcontracts the work to vendors. So, the source of supply of component parts will be the one of the factors that influences the location.

UNCONTROLLABLE FACTORS
11. Community and labour attitudes:
Community attitude towards their work and towards the prospective industries can make or mar the industry. Community attitudes towards supporting trade union activities are important criteria.
Facility location in specific location is not desirable even though all factors are favouring because of labour attitude towards management, which brings very often the strikes and lockouts.

12. Community infrastructure and amenity:

All manufacturing activities require access to a community infrastructure, most notably economic overhead capital, such as roads, railways, port facilities, power lines and service facilities and social overhead capital like schools, universities and hospitals.
These factors are also needed to be considered by location decisions as infrastructure is enormously expensive to build and for most manufacturing activities the existing stock of infrastructure provides physical restrictions on location possibilits.

Specific Locational Factors for Manufacturing Organisation

DOMINANT FACTORS Factors dominating location decisions for new manufacturing plants can be broadly classified in following groups. They are listed in the order of their importance as follows.
1. Favourable labour climate 2. Proximity to markets 3. Quality of life 4. Proximity to suppliers and resources 5. Utilities, taxes, and real estate costs

SECONDARY FACTORS There are some other factors needed to be considered, including
Room for expansion, Construction costs, Accessibility to multiple modes of transportation, The cost of shuffling people and materials between plants, Competition from other firms for the workforce, Community attitudes, and many others. For global operations, firms are emphasizing local employee skills and education and the local infrastructure.

Specific Locational Factors for Service Organisation

DOMINANT FACTORS The factors considered for manufacturers are also applied to service providers, with one important addition the impact of location on sales and customer satisfaction. Customers usually look about how close a service facility is, particularly if the process requires considerable customer contact.
PROXIMITY TO CUSTOMERS TRANSPORTATION COSTS AND PROXIMITY TO MARKETS LOCATION OF COMPETITORS

SECONDARY FACTORS
Retailers also must consider the level of retail activity, residential density, traffic flow, and site visibility. Retail activity in the area is important, as shoppers often decide on impulse to go shopping or to eat in a restaurant. Traffic flows and visibility are important because businesses customers arrive in cars. Visibility involves distance from the street and size of nearby buildings and signs. High residential density ensures night time and weekend business when the population in the area fits the firms competitive priorities and target market segment.

LOCATION THEORIES
ALFRED WEBERS THEORY OF THE LOCATION OF INDUSTRIES
Alfred Weber (18681958), with the publication of Theory of the Location of Industries in 1909, put forth the first developed general theory of industrial location. His model took into account several spatial factors for finding the optimal location and minimal cost for manufacturing plants. The point for locating an industry that minimizes costs of transportation and labour requires analysis of three factors:
1. 2. 3. The point of optimal transportation based on the costs of distance to the material indexthe ratio of weight to intermediate products (raw materials) to finished product. The labour distortion, in which more favourable sources of lower cost of labour may justify greater transport distances. Agglomeration and degglomerating.

LOCATION THEORIES
Agglomeration or concentration of firms in a locale occurs when there is sufficient demand for support services for the company and labour force, including new investments in schools and hospitals. Also supporting companies, such as facilities that build and service machines and financial services, prefer closer contact with their customers. Degglommeration occurs when companies and services leave because of over concentration of industries or of the wrong types of industries, or shortages of labour, capital, affordable land, etc.
Weber also examined factors leading to the diversification of an industry in the horizontal relations between processes within the plant.

LOCATION MODELS
Various models are available which help to identify the ideal location. Some of the popular models are:
1. 2. 3. 4. 5. Factor rating method Weighted factor rating method Load-distance method Centre of gravity method Break-even analysis

Factor Rating Method

The process of selecting a new facility location involves a series of following steps:
1. Identify the important location factors. 2. Rate each factor according to its relative importance, i.e., higher the ratings is indicative of prominent factor. 3. Assign each location according to the merits of the location for each factor. 4. Calculate the rating for each location by multiplying factor assigned to each location with basic factors considered. 5. Find the sum of product calculated for each factor and select best location having highest total score.

Let us assume that a new medical facility, Health-care, is to be located in Delhi. The location factors, factor rating and scores for two potential sites are shown in the following table. Which is the best location based on factor rating method?

Weighted Factor Rating Method

In this method to merge quantitative and qualitative factors, factors are assigned weights based on relative importance and weightage score for each site using a preference matrix is calculated. The site with the highest weighted score is selected as the best choice.

Let us assume that a new medical facility, Health-care, is to be located in Delhi. The location factors, weights, and scores (1 = poor, 5 = excellent) for two potential sites are shown in the following table. What is the weighted score for these sites? Which is the best location?

Load-distance Method
The load-distance method is a mathematical model used to evaluate locations based on proximity factors. The objective is to select a location that minimizes the total weighted loads moving into and out of the facility. The distance between two points is expressed by assigning the points to grid coordinates on a map. An alternative approach is to use time rather than distance. DISTANCE MEASURES Suppose that a new warehouse is to be located to serve Delhi. It will receive inbound shipments from several suppliers, including one in Ghaziabad. If the new warehouse were located at Gurgaon, what would be the distance between the two facilities? If shipments travel by truck, the distance depends on the highway system and the specific route taken. Computer software is available for calculating the actual mileage between any two locations in the same county. However, for load-distance method, a rough calculation that is either Euclidean or rectilinear distance measure may be used. Euclidean distance is the straight-line distance, or shortest possible path, between two points. The point A on the grid represents the suppliers location in Ghaziabad, and the point B represents the possible warehouse location at Gurgaon. The distance between points A and B is the length of the hypotenuse of a right triangle, or

dAB = Sqrt ((XA XB)2 + (YA YB)2)

where dAB = distance between points A and B

XA = x-coordinate of point A YA = y-coordinate of point A XB = x-coordinate of point B YB = y-coordinate of point B

Rectilinear distance measures distance between two points with a series of 90 turns as city blocks. Essentially, this distance is the sum of the two dashed lines representing the base and side of the triangle in figure. The distance travelled in the x-direction is the absolute value of the difference in x-coordinates. Adding this result to the absolute value of the difference in the y-coordinates gives

DAB = |XA XB| + |YA YB|

Load-distance Method
CALCULATING A LOAD-DISTANCE SCORE
Suppose that a firm planning a new location wants to select a site that minimizes the distances that loads, particularly the larger ones, must travel to and from the site. Depending on the industry, a load may be shipments from suppliers, between plants, or to customers, or it may be customers or employees travelling to or from the facility. The firm seeks to minimize its loaddistance, generally by choosing a location so that large loads go short distances. To calculate a load-distance for any potential location, we use either of the distance measures and simply multiply the loads flowing to and from the facility by the distances travelled. These loads may be expressed as tones or number of trips per week.

The new Health-care facility is targeted to serve seven census tracts in Delhi. The table given below shows the coordinates for the centre of each census tract, along with the projected populations, measured in thousands. Customers will travel from the seven census tract centres to the new facility when they need health-care. Two locations being considered for the new facility are at (5.5, 4.5) and (7, 2), which are the centres of census tracts C and F. Details of seven census tract centres, co-ordinate distances along with the population for each centre are given below. If we use the population as the loads and use rectilinear distance, which location is better in terms of its total loaddistance score?

Centre of Gravity
Centre of gravity is based primarily on cost considerations. This method can be used to assist managers in balancing cost and service objectives. The centre of gravity method takes into account the locations of plants and markets, the volume of goods moved, and transportation costs in arriving at the best location for a single intermediate warehouse. The centre of gravity is defined to be the location that minimizes the weighted distance between the warehouse and its supply and distribution points, where the distance is weighted by the number of tones supplied or consumed. The first step in this procedure is to place the locations on a coordinate system. The origin of the coordinate system and scale used are arbitrary, just as long as the relative distances are correctly represented. This can be easily done by placing a grid over an ordinary map. The centre of gravity is determined by the formula.

where Cx = x-coordinate of the centre of gravity Cy = y-coordinate of the centre of gravity Dix = x-coordinate of location i Diy = y-coordinate of location i

The new Health-care facility is targeted to serve seven census tracts in Delhi. The table given below shows the coordinates for the centre of each census tract, along with the projected populations, measured in thousands. Customers will travel from the seven census tract centres to the new facility when they need health-care. Two locations being considered for the new facility are at (5.5, 4.5) and (7, 2), which are the centres of census tracts C and F. Details of seven census tract centres, coordinate distances along with the population for each centre are given below. Find the target areas centre of gravity for the Health-care medical facility.

Break-even Analysis

Break-even Analysis

Potential locations X, Y and Z have the cost structures shown below. The ABC company has a demand of 1,30,000 units of a new product. Three otential locations X, Y and Z having following cost structures shown are available. Select which location is to be selected and also identify the volume ranges where each location is suited?

Therefore, at a volume of 1,30,000 units, Y is the appropriate strategy. From the graph (Fig. 4.4) we can interpret that location X is suitable up to 100,000 units, location Y is suitable up to between 100,000 to 300,000 units and location Z is suitable if the demand is more than 300,000 units.

LOCATIONAL ECONOMICS
An ideal location is one which results in lowest production cost and least distribution cost per unit. These costs are influenced by a number of factors as discussed earlier. The various costs which decide locational economy are those of land, building, equipment, labour, material, etc. Other factors like community attitude, community facilities and housing facilities will also influence the selection of best location. Economic analysis is carried out to decide as to which locate best location.

From the following data select the most advantageous location for setting a plant for making transistor radios.

SOLUTION

PLANT LAYOUT
Plant layout refers to the physical arrangement of production facilities. It is the configuration of departments, work centres and equipment in the conversion process. It is a floor plan of the physical facilities, which are used in production. According to Moore Plant layout is a plan of an optimum arrangement of facilities including personnel, operating equipment, storage space, material handling equipment and all other supporting services along with the design of best structure to contain all these facilities.

Objectives of Plant Layout

The primary goal of the plant layout is to maximise the profit by arrangement of all the plant facilities to the best advantage of total manufacturing of the product. The objectives of plant layout are:
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. Streamline the flow of materials through the plant. Facilitate the manufacturing process. Maintain high turnover of in-process inventory. Minimise materials handling and cost. Effective utilisation of men, equipment and space. Make effective utilisation of cubic space. Flexibility of manufacturing operations and arrangements. Provide for employee convenience, safety and comfort. Minimize investment in equipment. Minimize overall production time. Maintain flexibility of arrangement and operation. Facilitate the organizational structure.

Principles of Plant Layout

1. 2. Principle of integration: A good layout is one that integrates men, materials, machines and supporting services and others in order to get the optimum utilisation of resources and maximum effectiveness. Principle of minimum distance: This principle is concerned with the minimum travel (or movement) of man and materials. The facilities should be arranged such that, the total distance travelled by the men and materials should be minimum and as far as possible straight line movement should be preferred. Principle of cubic space utilisation: The good layout is one that utilise both horizontal and vertical space. It is not only enough if only the floor space is utilised optimally but the third dimension, i.e., the height is also to be utilised effectively. Principle of flow: A good layout is one that makes the materials to move in forward direction towards the completion stage, i.e., there should not be any backtracking. Principle of maximum flexibility: The good layout is one that can be altered without much cost and time, i.e., future requirements should be taken into account while designing the present layout. Principle of safety, security and satisfaction: A good layout is one that gives due consideration to workers safety and satisfaction and safeguards the plant and machinery against fire, theft, etc. Principle of minimum handling: A good layout is one that reduces the material handling to the minimum.

3.

4. 5. 6. 7.

CLASSIFICATION OF LAYOUT
Layouts can be classified into the following five categories:
1. 2. 3. 4. 5. Process layout Product layout Combination layout Fixed position layout Group layout

Process layout
Process layout is recommended for batch production. All machines performing similar type of operations are grouped at one location in the process layout e.g., all lathes, milling machines, etc. are grouped in the shop will be clustered in like groups. Process layout is normally used when the production volume is not sufficient to justify a product layout.
Typically, job shops employ process layouts due to the variety of products manufactured and their low production volumes.

Process layout
Advantages
1. 2. 3. 4. 5. 6. 7. In process layout machines are better utilized and fewer machines are required. Flexibility of equipment and personnel is possible in process layout. Lower investment on account of comparatively less number of machines and lower cost of general purpose machines. Higher utilisation of production facilities. A high degree of flexibility with regards to work distribution to machineries and workers. The diversity of tasks and variety of job makes the job challenging and interesting. Supervisors will become highly knowledgeable about the functions under their department. Backtracking and long movements may occur in the handling of materials thus, reducing material handling efficiency. Material handling cannot be mechanised which adds to cost. Process time is prolonged which reduce the inventory turnover and increases the inprocess inventory. Lowered productivity due to number of set-ups. Throughput (time gap between in and out in the process) time is longer. Space and capital are tied up by work-in-process.

Limitations
1. 2. 3. 4. 5. 6.

Product Layout
In this type of layout, machines and auxiliary services are located according to the processing sequence of the product. If the volume of production of one or more products is large, the facilities can be arranged to achieve efficient flow of materials and lower cost per unit. Special purpose machines are used which perform the required function quickly and reliably. The product layout is selected when the volume of production of a product is high such that a separate production line to manufacture it can be justified. In a strict product layout, machines are not shared by different products. Therefore, the production volume must be sufficient to achieve satisfactory utilisation of the equipment.

Product Layout
Advantages
1. 2. 3. 4. 5. 6. 7. The flow of product will be smooth and logical in flow lines. In-process inventory is less. Throughput time is less. Minimum material handling cost. Simplified production, planning and control systems are possible. Less space is occupied by work transit and for temporary storage. Reduced material handling cost due to mechanised handling systems and straight flow. 8. Perfect line balancing which eliminates bottlenecks and idle capacity. 9. Manufacturing cycle is short due to uninterrupted flow of materials. 10. Small amount of work-in-process inventory. 11. Unskilled workers can learn and manage the production.

Limitations
1. 2. 3. 4. 5. A breakdown of one machine in a product line may cause stoppages of machines in the downstream of the line. A change in product design may require major alterations in the layout. The line output is decided by the bottleneck machine. Comparatively high investment in equipments is required. Lack of flexibility. A change in product may require the facility modification.

Combination Layout
A combination of process and product layouts combines the advantages of both types of layouts. A combination layout is possible where an item is being made in different types and sizes. Here machinery is arranged in a process layout but the process grouping is then arranged in a sequence to manufacture various types and sizes of products. It is to be noted that the sequence of operations remains same with the variety of products and sizes.

Fixed Position Layout

This is also called the project type of layout. In this type of layout, the material, or major components remain in a fixed location and tools, machinery, men and other materials are brought to this location. This type of layout is suitable when one or a few pieces of identical heavy products are to be manufactured and when the assembly consists of large number of heavy parts, the cost of transportation of these parts is very high.

Fixed Position Layout

Advantages The major advantages of this type of layout are:
1. Helps in job enlargement and upgrades the skills of the operators. 2. The workers identify themselves with a product in which they take interest and pride in doing the job. 3. Greater flexibility with this type of layout. 4. Layout capital investment is lower.

Group Layout (or Cellular Layout)

There is a trend now to bring an element of flexibility into manufacturing system as regards to variation in batch sizes and sequence of operations. A grouping of equipment for performing a sequence of operations on family of similar components or products has become all the important. Group Technology (GT) is the analysis and comparisons of items to group them into families with similar characteristics. GT can be used to develop a hybrid between pure process layout and pure flow line (product) layout. This technique is very useful for companies that produce variety of parts in small batches to enable them to take advantage and economics of flow line layout. The application of group technology involves two basic steps; first step is to determine component families or groups. The second step in applying group technology is to arrange the plants equipment used to process a particular family of components. This represents small plants within the plants. The group technology reduces production planning time for jobs. It reduces the set-up time. Thus group layout is a combination of the product layout and process layout. It combines the advantages of both layout systems. If there are m-machines and n-components, in a group layout (Group-Technology Layout), the m-machines and n-components will be divided into distinct number of machine-component cells (group) such that all the components assigned to a cell are almost processed within that cell itself. Here, the objective is to minimize the intercell movements. The basic aim of a group technology layout is to identify families of components that require similar of satisfying all the requirements of the machines are grouped into cells. Each cell is capable of satisfying all the requirements of the component family assigned to it. The layout design process considers mostly a single objective while designing layouts. In process layout, the objective is to minimize the total cost of materials handling. Because of the nature of the layout, the cost of equipments will be the minimum in this type of layout. In product layout, the cost of materials handling will be at the absolute minimum. But the cost of equipments would not be at the minimum if the equipments are not fully utilized.

Group Layout (or Cellular Layout)

Group Layout (or Cellular Layout)

Advantages of Group Technology Layout Group Technology layout can increase
1. Component standardization and rationalization. 2. Reliability of estimates. 3. Effective machine operation and productivity. 4. Customer service.

It can decrease the

1. Paper work and overall production time. 2. Work-in-progress and work movement. 3. Overall cost.

Limitations of Group Technology Layout

This type of layout may not be feasible for all situations. If the product mix is completely dissimilar, then we may not have meaningful cell formation.

DESIGN OF PRODUCT LAYOUT

In product layout, equipment or departments are dedicated to a particular product line, duplicate equipment is employed to avoid backtracking, and a straight-line flow of material movement is achievable. Adopting a product layout makes sense when the batch size of a given product or part is large relative to the number of different products or parts produced. Assembly lines are a special case of product layout.
In a general sense, the term assembly line refers to progressive assembly linked by some material-handling device. The usual assumption is that some form of pacing is present and the allowable processing time is equivalent for all workstations. Within this broad definition, there are important differences among line types. A few of these are material handling devices (belt or roller conveyor, overhead crane); line configuration (U-shape, straight, branching); pacing (mechanical, human); product mix (one product or multiple products); workstation characteristics (workers may sit, stand, walk with the line, or ride the line); and length of the line (few or many workers). The range of products partially or completely assembled on lines includes toys, appliances, autos, clothing and a wide variety of electronic components. In fact, virtually any product that has multiple parts and is produced in large volume uses assembly lines to some degree.

Traditional assembly line

 LINE BALANCING

DESIGN OF PRODUCT LAYOUT

Assembly-line balancing often has implications for layout. This would occur when, for balance purposes, workstation size or the number used would have to be physically modified. The most common assembly-line is a moving conveyor that passes a series of workstations in a uniform time interval called the workstation cycle time (which is also the time between successive units coming off the end of the line). At each workstation, work is performed on a product either by adding parts or by completing assembly operations. The work performed at each station is made up of many bits of work, termed tasks, elements, and work units. Such tasks are described by motion-time analysis. Generally, they are grouping that cannot be subdivided on the assembly-line without paying a penalty in extra motions. The total work to be performed at a workstation is equal to the sum of the tasks assigned to that workstation. The linebalancing problem is one of assigning all tasks to a series of workstations so that each workstation has no more than can be done in the workstation cycle time, and so that the unassigned (idle) time across all workstations is minimized.

DESIGN OF PRODUCT LAYOUT

LINE BALANCING
The problem is complicated by the relationships among tasks imposed by product design and process technologies. This is called the precedence relationship, which specifies the order in which tasks must be performed in the assembly process.
The steps in balancing an assembly line are:
1. Specify the sequential relationships among tasks using a precedence diagram. 2. Determine the required workstation cycle time C, using the formula

C =Production time per day/Required output per day (in units)

3. Determine the theoretical minimum number of workstations (Nt) required to satisfy the workstation cycle time constraint using the formula

Nt = Sum of task times (T)/Cycle time (C)

4. Select a primary rule by which tasks are to be assigned to workstations, and a secondary rule to break ties. 5. Assign tasks, once at a time, to the first workstation until the sum of the task times is equal to the workstation cycle time, or no other tasks are feasible because of time or sequence restrictions. Repeat the process for workstation 2, workstation 3, and so on until all tasks are assigned. 6. Evaluate the efficiency of the balance derived using the formula

Efficiency = Sum of task times (T)/ Actual number of workstations (Na ) Workstations cycle time (C)
7. If efficiency is unsatisfactory, rebalance using a different decision rule.

DESIGN OF PRODUCT LAYOUT

BEHAVIOURAL FACTORS
The most controversial aspect of product layout is behavioural response. Studies have shown that paced production and high specialization lower job satisfaction. One study has shown that productivity increased on unpaced lines. Many companies are exploring job enlargement and rotation to increase job variety and reduce excessive specialization.

DESIGN OF PRODUCT LAYOUT

NUMBER OF MODELS PRODUCED
A mixed-model line produces several items belonging to the same family. A single-model line produces one model with no variations. Mixed model production enables a plant to achieve both high-volume production and product variety. However, it complicates scheduling and increases the need for good communication about the specific parts to be produced at each station.

CYCLE TIMES
A lines cycle time depends on the desired output rate (or sometimes on the maximum number of workstations allowed). In turn, the maximum line efficiency varies considerably with the cycle time selected. Thus, exploring a range of cycle times makes sense. A manager might go with a particularly efficient solution even if it does not match the output rate. The manager can compensate for the mismatch by varying the number of hours the line operates through overtime, extending shifts, or adding shifts. Multiple lines might even be the answer.

DESIGN OF PROCESS LAYOUT

The analysis involved in the design of production lines and assembly lines relates primarily to timing, coordination, and balance among individual stages in the process. For process layouts, the relative arrangement of departments and machines is the critical factor because of the large amount of transportation and handling involved. PROCEDURE FOR DESIGNING PROCESS LAYOUTS
Process layout design determines the best relative locations of functional work centres. Work centres that interact frequently, with movement of material or people, should be located close together, whereas those that have little interaction can be spatially separated. One approach of designing an efficient functional layout is described below.
1. List and describe each functional work centre. 2. Obtain a drawing and description of the facility being designed. 3. Identify and estimate the amount of material and personnel flow among work centres 4. Use structured analytical methods to obtain a good general layout. 5. Evaluate and modify the layout, incorporating details such as machine orientation, storage area location, and equipment access.

DESIGN OF PROCESS LAYOUT Relationship flow diagram

DESIGN OF PROCESS LAYOUT

The amounts and/or costs of flows among work centres are usually presented using a flow matrix, a flow-cost matrix, or a proximity chart. 1. Flow Matrix
A flow matrix is a matrix of the estimated amounts of flow between each pair of work centres. The flow may be materials (expressed as the number of loads transported) or people who move between centres. Each work centre corresponds to one row and one column, and the element fij designates the amount of flow from work centre (row) I to work centre (column) j. Normally, the direction of flow between work centres is not important, only the total amount, so fij and fji can be combined and the flows represented using only the upper right half of a matrix.

2. Flow-cost Matrix
A basic assumption of facility layout is that the cost of moving materials or people between work centers is a function of distance travelled. Although more complicated cost functions can be accommodated, often we assume that the per unit cost of material and personnel flows between work centres is proportional to the distance between the centres. So for each type of flow between each pair of departments, i and j, we estimate the cost per unit per unit distance, c .
ij

3. Proximity Chart
Proximity charts (relationship charts) are distinguished from flow and flow-cost matrices by the fact that they describe qualitatively the desirability or need for work centres to be close together, rather than providing quantitative measures of flow and cost. These charts are used when it is difficult to measure or estimate precise amounts or costs of flow among work centres. This is common when the primary flows involve people and do not have a direct cost but rather an indirect cost, such as when employees in a corporate headquarters move among departments (payroll, printing, information systems) to carry out their work.

SERVICE LAYOUT
The major factors considered for service providers, is an impact of location on sales and customer satisfaction. Customers usually look about how close a service facility is, particularly if the process requires considerable customer contact. Hence, service facility layouts should provide for easy entrance to these facilities from the freeways. Well-organized packing areas, easily accessible facilities, well designed walkways and parking areas are some of the requirements of service facility layout. Service facility layout will be designed based on degree of customer contact and the service needed by a customer. These service layouts follow conventional layouts as required. For example, for car service station, product layout is adopted, where the activities for servicing a car follows a sequence of operation irrespective of the type of car. Hospital service is the best example for adaptation of process layout. Here, the service required for a customer will follow an independent path.

Service layout for car servicing

Layout for hospitality service

ORGANISATION OF PHYSICAL FACILITIES

The following are the most important physical facilities to be organised:
1. Factory building 2. Lighting 3. Climatic conditions 4. Ventilation 5. Work-related welfare facilities.

Design of the Building

The building should designed so as to provide a number of facilitiessuch as lunch rooms, cafeteria, locker rooms, crches, libraries, first-aid and ambulance rooms, materials handling facilities, heating, ventilation, air-conditioning, etc. Following factors are considerations in the designing of a factory building:
1. Flexibility: Flexibility is one of the important considerations because the building is likely to become obsolete and provides greater operating efficiency even when processes and technology change. Flexibility is necessary because it is not always feasible and economical to build a new plant, every time a new firm is organised or the layout is changed. With minor alternations, the building should be able to accommodate different types of operations. 2. Product and equipment: The type of product that is to be manufactured, determines column-spacing, type of floor, ceiling, heating and air-conditioning. A product of a temporary nature may call for a less expensive building and that would be a product of a more permanent nature. Similarly, a heavy product demands a far more different building than a product which is light in weight.

Design of the Building

3. Expansibility: Growth and expansion are natural to any manufacturing enterprises. They are the indicators of the prosperity of a business. The following factors should be borne in mind if the future expansion of the concern is to be provided for:
(i) The area of the land which is to be acquired should be large enough to provide for the future expansion needs of the firm and accommodate current needs. (ii) The design of the building should be in a rectangular shape. Rectangular shapes facilitate expansion on any side. (iii) If vertical expansion is expected, strong foundations, supporters and columns must be provided. (iv) If horizontal expansion is expected, the side walls must be made non-loadbearing to provide for easy removal.

4. Employee facilities and service area: Employee facilities must find a proper place in the building design because they profoundly affect the morale, comfort and productivity.
The building plan should include facilities for lunch rooms, cafeteria, water coolers, parking area and the like. The provision of some of these facilities is a legal requirement. Others make good working conditions possible. And a good working condition is good business. Service areas, such as the tool room, the supervisors office, the maintenance room, receiving and dispatching stations, the stock room and facilities for scrap disposal, should also be included in the building design.

Types of Buildings
Industrial buildings may be grouped under two types:
1. Single-storey buildings, 2. Multi-storey buildings.

The decision on choosing a suitable type for a particular firm depends on the manufacturing process and the area of land and the cost of construction.

SINGLE-STOREY BUILDINGS
Advantages
Advantages of single-storey building are: 1. There is a greater flexibility in layout and production routing. 2. The maintenance cost resulting from the vibration of machinery is reduced considerably because of the housing of the machinery on the ground. 3. Expansion is easily ensured by the removal of walls. 4. The cost of transportation of materials is reduced because of the absence of materials handling equipment between floors. 5. All the equipment is on the same level, making for an easier and more effective layout supervision and control. 6. Greater floor load-bearing capacity for heavy equipment is ensured. 7. The danger of fire hazards is reduced because of the lateral spread of the building.

Limitations Single-storey buildings suffer from some limitations. These are:

1. High cost of land, particularly in the city. 2. High cost of heating, ventilating and cleaning of windows. 3. High cost of transportation for moving men and materials to the factory which is generally located far from the city.

MULTI-STOREY BUILDINGS
Advantages When constructed for industrial use, multi-storey buildings offer the following advantages:
1. Maximum operating floor space (per sq. ft. of land). This is best suited in areas where land is very costly. 2. Lower cost of heating and ventilation. 3. Reduced cost of materials handling because the advantage of the use of gravity for the flow of materials.

Limitations Following are the disadvantages of multi-storey building:

1. Materials handling becomes very complicated. A lot of time is wasted in moving them between floors. 2. A lot of floor space is wasted on elevators, stairways and fire escapes. 3. Floor load-bearing capacity is limited, unless special construction is used, which is very expensive. 4. Natural lighting is poor in the centres of the shop, particularly when the width of the building is somewhat great. 5. Layout changes cannot be effected easily and quickly.

Generally speaking, textile mills, food industries, detergent plants, chemical industries and software industry use these types of buildings.

LIGHTING
It is estimated that 80 per cent of the information required in doing job is perceived visually. Good visibility of the equipment, the product and the data involved in the work process is an essential factor in accelerating production, reducing the number of defective products, cutting down waste and preventing visual fatigue and headaches among the workers. It may also be added that both inadequate visibility and glare are frequently causes accidents. In principle, lighting should be adapted to the type of work. However, the level of illumination, measured in should be increased not only in relation to the degree of precision or miniaturization of the work but also in relation to the workers age. The accumulation of dust and the wear of the light sources cut down the level of illumination by 1050 per cent of the original level. This gradual drop in the level should therefore be compensated for when designing the lighting system. Regular cleaning of lighting fixture is obviously essential. Excessive contrasts in lighting levels between the workers task and the general surroundings should also be avoided. The use of natural light should be encouraged. This can be achieved by installing windows that open, which are recommended to have an area equal to the time of day, the distance of workstations from the windows and the presence or absence of blinds. For this reason it is essential to have artificial lighting, will enable people to maintain proper vision and will ensure that the lighting intensity ratios between the task, the surrounding objects and the general environment are maintained.

LIGHTING
CONTROL OF LIGHTING In order to make the best use of lighting in the work place, the following points should be taken into account:
1. For uniform light distribution, install an independent switch for the row of lighting fixtures closest to the windows. This allows the lights to be switched on and off depending on whether or not natural light is sufficient. 2. To prevent glare, avoid using highly shiny, glossy work surfaces. 3. Use localized lighting in order to achieve the desired level for a particular fine job. 4. Clean light fixtures regularly and follow a maintenance schedule so as to prevent flickering of old bulbs and electrical hazards due to worn out cables. 5. Avoid direct eye contact with the light sources. This is usually achieved by positioning them properly. The use of diffusers is also quite effective.

CLIMATIC CONDITIONS
Control of the climatic conditions at the workplace is paramount importance to the workers health and comfort and to the maintenance of higher productivity. With excess heat or cold, workers may feel very uncomfortable, and their efficiency drops. In addition, this can lead to accidents. This human body functions in such a way as to keep the central nervous system and the internal organs at a constant temperature. It maintains the necessary thermal balance by continuous heat exchange with the environment. It is essential to avoid excessive heat or cold, and wherever possible to keep the climatic conditions optimal so that the body can maintain a thermal balance.

CLIMATIC CONDITIONS
WORKING IN A HOT ENVIRONMENT
Hot working environments are found almost everywhere. Work premise in tropical countries may, on account of general climatic conditions, be naturally hot. When source of heat such as furnaces, kilns or hot processes are present, or when the physical workload is heavy, the human body may also have to deal with excess heat. In such hot working environments sweating is almost the only way in which the body can lose heat. As the sweat evaporates, the body cools. There is a relationship between the amount and speed of evaporation and a feeling of comfort. The more intense the evaporation, the quicker the body will cool and feel refreshed. Evaporation increases with adequate ventilation.

WORKING IN A COLD ENVIRONMENT

Working in cold environments was once restricted to non-tropical or highly elevated regions. Now as a result of modern refrigeration, various groups of workers, even in tropical countries, are exposed to a cold environment. Exposure to cold for short periods of time can produce serious effects, especially when workers are exposed to temperatures below 10C. The loss of body heat is uncomfortable and quickly affects work efficiency. Workers in cold climates and refrigerated premises should be well protected against the cold by wearing suitable clothes, including footwear, gloves and, most importantly, a hat. Normally, dressing in layers traps dead air and serves as an insulation layer, thus keeping the worker warmer.

CLIMATIC CONDITIONS
CONTROL OF THE THERMAL ENVIRONMENT
There are many ways of controlling the thermal environment. It is relatively easy to assess the effects of thermal conditions, especially when excessive heat or cold is an obvious problem. To solve the problem, however, consistent efforts using a variety of available measures are usually necessary. This is because the problem is linked with the general climate, which greatly affects the workplace climate, production technology, which is often the source of heat or cold and varying conditions of the work premises as well as work methods and schedules. Personal factors such as clothing, nutrition, personal habits, and age and individual differences in response to the given thermal conditions also need to be taken into account in the attempt to attain the thermal comfort of workers.

Principles of controlling the thermal environment

1. Regulating workroom temperature by preventing outside heat or cold from entering (improved design of the roof, insulation material or installing an air-conditioned workroom even though it is costly, especially in factories.); Provision of ventilation in hot workplaces by increasing natural ventilating through openings or installing ventilation devices; Separation of heat sources from the working area,
insulation of hot surfaces and pipes, or placement of barriers between the heat sources and the workers; for example by preventing the escape of steam from pipes and equipment;

2. 3. 4. 5.

Control of humidity with a view to keeping it at low levels,

Provision of adequate personal protective clothing and equipment for workers exposed to excessive radiant heat or excessive cold
(heat-protective clothing with high insulation value may not be recommended for jobs with long exposure to moderate or heavy work as it prevents evaporative heat loss);

6. 7. 8.

Reduction of exposure time, for example, by mechanization, remote control or alternating work schedules; Insertion of rest pauses between work periods, with comfortable,
1. if possible air-conditioned, resting facilities;

Ensuring a supply of cold drinking-water for workers in a hot environment and of hot drinks for those exposed to a cold environment.

VENTILATION
Ventilation is the dynamic parameter that complements the concept of air space.
For a given number of workers, the smaller the work premises the more should be the ventilation.

Ventilation differs from air circulation.

Ventilation replaces contaminated air by fresh air, whereas as the air-circulation merely moves the air without renewing it. Where the air temperature and humidity are high, merely to circulate the air is not only ineffective but also increases heat absorption. Ventilation disperses the heat generated by machines and people at work. Adequate ventilation should be looked upon as an important factor in maintaining the workers health and productivity

VENTILATION
Except for confined spaces, all working premises have some minimum ventilation.
To ensure the necessary air flow (which should not be lower than 50 cubic metres of air per hour per worker),
air usually needs to be changed between four to eight times per hour in offices or for sedentary workers, between eight and 12 times per hour in workshops and as much as 15 to 30 or more times per hour for public premises and where there are high levels of atmospheric pollution or humidity.

The air speed used for workplace ventilation should be adapted to the air temperature and the energy expenditure:
for sedentary work it should exceed 0.2 metre per second, but for a hot environment the optimum speed is between 0.5 and 1 metre per second. For hazardous work it may be even higher. Certain types of hot work can be made tolerable by directing a stream of cold air at the workers.

Natural ventilation, obtained by opening windows or wall or roof air vents, may produce significant air flows but can normally be used only in relatively mild climates. The effectiveness of this type of ventilation depends largely on external conditions.
Where natural ventilation is inadequate, artificial ventilation should be used. A choice may be made between a blown-air system, an exhaust air system or a combination of both (push-pull ventilation). Only push-pull ventilation systems allow for better regulation of air movement.

WORK-RELATED WELFARE FACILITIES

Work-related welfare facilities offered at or through the workplace can be important factors. Some facilities are very basic, but often ignored, such as drinkingwater and toilets. Others may seem less necessary, but usually have an importance to workers far greater than their cost to the enterprise. 1. DRINKING WATER 2. SANITARY FACILITIES 3. FIRST-AID AND MEDICAL FACILITIES 4. REST FACILITIES 5. FEEDING FACILITIES 6. CHILD-CARE FACILITIES 7. RECREATIONAL FACILITIES