Facility Layout (Plant Layout) Plan for the location of all machines and

utilities and for the physical arrangement within facilities of all manufacturing processes and their support functions.

Plant layout is a floor plan of the physical facilities which are used in production.

Layout planning refers to the generation of several possible plans for the spatial arrangement of physical facilities and select the one which minimizes the distance between the departments.

Objectives of Plant Layout Minimize investment in equipment Minimize overall production time Utilize existing space most effectively Provide for employee convenience, safety

and comfort Maintain flexibility of arrangement and

operation Minimize materials-handling cost Facilitate the manufacturing process Facilitate the organizational structure.

Layout Design Layout design must consider how to

achieve the following Higher utilization of space, equipment, and

people Improved flow of information, materials, or

people Improved employee morale and safer

working conditions Improved customer/client interaction Flexibility

Good Layout A good layout requires determining the

following: Material handling equipment: Managers

must decide about equipment to be used, including conveyors, cranes, automated storage and retrieval systems, etc.

Capacity and space requirements: Only when personnel, machines, and equipment requirements are known can managers proceed with layout and provide space for each component.

Good Layout Environment and aesthetics: Layout concerns

often require decisions about windows, planters, and height of partitions to facilitate air flow, reduce noise, provide privacy, etc.

Flows of information: Communication is important to any organization and must be facilitate by the layout.

Cost of moving between various work areas: There may be unique considerations related to moving materials or to the importance of having certain areas next to each other.

Classification/Types of Layout Layouts can be classified into the

following four categories. Process Layout Product Layout Group Layout ( Combination/Hybrid

Layout) Fixed position Layout

Process Layout Process layout are designed to

accommodate variety in product designs and processing steps.

It is otherwise known as functional layout or job shops.

In process layout, similar machines and services are located together.

Process layout is normally used when the production volume is not sufficient to justify a product layout.

Job shops employ process layouts due to the variety of products manufactured and their low production volumes.

Process Layout Process layout typically use general

purpose that can be changed over rapidly to new operations for different product designs.

These machines are usually arranged according to the type of process being performed.

For example, all machining would be in one department, all assembly in another department, and all painting in another department

Product Layout Product layouts are designed to accommodate

only a few product designs. It is often called production lines or assembly

lines. Product layout is used when machines and

auxiliary services are located according to the processing sequence of the product.

It is selected when the volume of production of a product is high.

Auto manufacturing plants are good examples of facilities that use a product layout.

Advantages of product layout The low variable cost per unit usually

associated with high-volume, standardized products

Low material handling costs Reduce work-in-process inventories Easier training and supervision

Disadvantages of product layout The high volume required because of

the large investment needed to establish the process.

That work stoppage at any one point ties up the whole operation

A lack of flexibility when handling a variety of products or production rates.

Group Layout A group layout is a combination of 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, the m machines and n components will be divided into distinct number of machine component cells such that all the components assigned to a cell are almost processed within that cell itself.

The basic aim of a group technology layout is to identify families of components that require similar processing on a set of machines.

In group technology layout , the objective is to minimize the sum of the cost of transportation and the cost of equipments

Fixed position Layout

It is also known as static position layout. In fixed position layout the physical

characteristics of the product dictate as to which type of machines and men are to be brought to the product.

the ship building industry commonly employs a static product layout..

Retail Layout

Retail layout are based on the idea that sales and profitability vary directly with customer exposure to products.

Most retail operations managers try to expose customers to as many products as possible.

The operations manager can alter both with the overall arrangement of the store and allocation of space to various products within that arrangement.

Ideas for determining the arrangement of stores Locate the high-draw items around the

periphery of the store. Example: we tend to find dairy products on one side of a supermarket and bread and bakery products on another.

Use prominent locations for high-impulse and high-margin items. Best buy puts fast-growing, high-margin digital goods – such as cameras and DVDs – in the front and centre of its stores.

Ideas for determining the arrangement of stores

Distribute what are known in the trade as “power items” – items that may dominate a purchasing trip.

Convey the mission of the store by carefully selecting the position of the lead-off department.

Retail Layout

Once the overall layout of a retail store has been decided, products need to be arranged for sale.

The main objective of retail layout is to maximize profitability per square foot of floor space.

Slotting fees

An additional, and somewhat controversial, issue in retail layout is called slotting.

Slotting fees are fees manufacturers pay to get their goods on the shelf in a retail store or supermarket chain.

Wal-Mart is one of the few major retailers that does not demand slotting fees. This removes the barrier to entry that small companies usually face.

Servicescapes

The term servicecape describes the physical surroundings in which the service is delivered and how the surroundings have a humanistic effect on customers and employees.

to provide good service layout, a firm considers three elements:

Ambient conditions, which are background characteristics such as lighting, sound, smell, and temperature.

Servicescapes

Spatial layout and functionality, which involves customer circulation path planning, product grouping.

Signs, symbols, and artifacts, which are characteristics of building design that carry social significance

Facility Location or Plant Location Business systems utilize facilities like, plant and

machineries, warehouses, etc., while performing the task of producing products/services.

A proper planning of these facilities would definitely reduce their cost of operation and maintenance.

Plant location decisions are very important because they have direct bearing on factors like financial, employment and distribution patterns.

At the time of starting any industry, one should generate several alternate sites for locating the plant.

After a critical analysis, the best site is to be selected for commissioning the plant.

Location of warehouses and other facilities are also having direct bearing on the operational performance of organizations

Reasons for plant location study

Establishment of a new venture Expansion of existing business Significant change in existing demand,

supply and marketing locations Significant change in the cost structure Government policies.

Factors Influencing Plant Location General Factors: Availability of land for present and future needs and

cost of land and land development and building etc. Availability of inputs such as labour, raw materials,

etc. Closeness to the market places Stability of demand Availability of communication facilities Availability of necessary modes of transportation

like road, rail, airport and water ways. Availability of infrastructure facilities such as power,

water, financial institutions, banks, etc Disposal of waste and effluent and their impact on

the environment.

Factors Influencing Plant Location General Factors: Government support, grant, subsidy, tax

structure Availability of housing facilities and

recreational facilities Demographic factors like population,

trained man power, academic institutions, standard of living, income level, etc.

Security, culture of society Fuel cost.

Factors Influencing Plant Location Specific Factors: A MNC, desiring to set up plant

should consider the following aspects in addition to the normal factors.

The economic stability of the country and the concern of the country towards outside investments are to be considered.

The success of operation of the factory depends on the cultural factors, language and cultural differences which can present operating, control and even policy problems.

Analysis must be based on the factors like wage rate, policy duties, etc.

The company can set up joint ventures with any local giants that will solve many operational problems.