1

Location Selection and Plant Layout

Course Contents
1.1 Nature of Location Decision
1.2 Importance of Location
1.3 Dynamic Nature of Plant
Location
1.4 Choice of Site For Location
1.5 Urban, Suburban and Rural
Location
1.6 Plant Layout
1.7 Principles of Plant Layout
1.8 Factors Influencing Layout
1.9 Types of Layout
1.10 Plant Layout Procedure
1.11 Material Flow Patterns
1.12 Tools And Techniques For Plant
Layout
1.13 Different Plant Layouts
1.14 Computerized Package For
Layout Analysis
1.1 Nature of Location Decision
 Plant location is an important decision which decides the fate of the business. In the
past, much importance was not given to the selection of appropriate location and the
decisions in this regard were mainly governed by the individual preferences of the
entrepreneurs and social customs. This resulted in failure of many organisations which
otherwise could have been successful.
 Government also became instrumental in the selection of location for various
industries in undeveloped areas by providing various investment benefits and other
incentives with the objective of industrialists to follow a more scientific and logical
approach towards the selection of site for establishing their industries.
 The degree of significance for the selection of location for any enterprise mainly
depends on its size and nature. Sometimes, the nature of the product itself suggests
some suitable location.
 A small scale industry mainly selects the site where in accordance with its capacity,
the local market is available for its products. It can easily shift to other place when
there is any change in the market. But for large scale industries requiring huge amount
of investment there are many considerations other than the local demand in the
selection of proper plant location. These plants cannot be easily shifted to other place
and an error of judgment in the selection of site can be very expensive to the
organisation.
1.2 Importance of Location
 The selection of location is an important activity for the success of the business and
requires careful analysis. The selection of location is of prime importance both for new
and already established enterprises.
 The choice of location is vital for any new firm for its success. Because fundamental
objective of an enterprise is to maximize its profit which can be done either by
increasing sales or by reducing cost of production.
 Selection of appropriate location is important due to the following reasons :
1) Natural or climatic conditions.
2) Availability and nearness to the sources of raw material.
3) Transport costs-in obtaining raw material and also distribution or marketing
finished products to the ultimate users.
4) Access to market: small businesses in retail or wholesale or services should be
located within the vicinity of densely populated areas.
5) 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.
6) Availability of skilled and non-skilled labour and technically qualified and
trained managers.
7) Banking and financial institutions are located nearby.
8) Locations with links: to develop industrial areas or busines s centers result in
savings and cost reductions in transport overheads, miscellaneous expenses.
9) Strategic considerations of safety and security should be given due
importance.
 10) 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.
11) Residence of small business entrepreneurs want to set up nearby their
homelands.
 The need for selection of suitable site or location to house the factory/plant may arise
in the following:
a) While starting a new factory/enterprise.
b) During the expansion of the existing plant.
c) When the existing plant is to be relocated at some other place to remove its draw
back or to gain the benefits of still better location.
1.3 Dynamic Nature of Plant Location
 There is nothing like permanent good location. In reality no location can be considered
unique and can remain good for ever.
 The business uncertainty and dynamism may convert a good location of today into an
inferior one of tomorrow and vice versa. Location study thus requires constant
monitoring.
 Thus the problem of decision to move or to stay at a particular location is always
before the management specially when some expansion programme is undertaken.
The shift of the location of plant to some other place is known as relocation.
 The relocation of plant may be necessary dug to following reasons :
1) Shift in the structure of the market or movement of markets.
2) Changes in the nature and costs of transportation.
3) Changes in the costs and availability of raw-materials.
4) Change in the pricing policy of the enterprise.
5) Undesirable labour situation.
6) Non-availability of labour, rise in labour costs, changes in other factors etc.
7) Demolition, compulsory purchase of premises or national legislation.
8) Relocation of various associated industries and plants.
9) Scientific discoveries/developments, new field of technology, increasing
competition etc.
1.4 Choice of Site For Location
 The problem of site selection of a factory can be solved in the following three stages:
1) Selection of the region.
2) Selection of the locality,
3) Selection of actual site.
1) Selection of the region
 Generally, the geographical area is divided on the basis of natural regions or political
boundaries within the nation (for example, Maharashtra State, Gujarat State, U.P.
State etc.). The suitability of various regions are considered on the basis of
comparative cost advantages available out of the possible regions.
 Some of the major considerations in selecting the region.
a) Availability and proximity of raw-materials,
 b) Vicinity of the market,
c) Labour supply
d) Climatic conditions

2) Selection of the Locality.

 After selecting the region, the specific locality within the region is considered.
Generally, following alternatives are open in selecting the locality.
a) Urban area.
b) Rural area.
c) Suburban area in the vicinity of the urban area.
 The comparative advantages of each locality are considered at this stage.
 The following factors must be considered while selecting the location of the factory :
1. Availability of Raw-materials.
2. Proximity to markets.
3. Availability of labour.
4. Transport and communication facilities.
5. Availability of power and fuel.
6. Climatic conditions.
7. Availability of water.
8. Ancillary Industries.
9. Financial and other aids.
10. Business and commercial facilities.

1. Availability of Raw-Material. (Nearness to supply of raw-material).

 As far as possible the site selected should be near the source of raw-materials, so that
the cost of transportation can be minimized and the storing cost can be reduced due
to shorter lead time.
 If the raw-materials are heavy and bulky or cheap but looses a good amount of weight
during processing, it becomes essential to select a site near to the source of raw-
material. For example, most of the iron and steel industries are situated in Orissa and
Bihar. Again, if the raw-material is perishable nearness to source of raw-material is an
advantage. For example sugarcane is both weight loosing (weight of the sugar is about
10% of weight of sugarcane) and perishable. Hence most of the sugar-cane industries
in Maharashtra and U.P. are concentrated in those areas where sugarcane is
cultivated. If the material cost forms bulk cost of finished product, this factor needs
careful consideration.
2. Proximity to markets.
 The cost of transporting finished goods, advertising and distribution etc. will be greatly
reduced if the factory is located near the market. Nearness to market is an important
factor in the following cases :
a) Industries using light raw-materials of high value.
b) Industries producing perishable, fragile or heavy products.
c) For the industries providing technical advice and services (such as tool and die
companies) this will help in ensuring prompt service to customers.
 If the product enjoys scattered market then nearness of the market is not a deciding
factor in the selection of site.
3. Availability of labour.
 Availability of right kind of labour force in required numbers at reasonable rates is also
a deciding factor in selection of site. Unskilled labour is amply available at major
industrial centres and rural areas. However, the firms requiring skilled labour should
be situated near the urban areas.
 The glass and bangle industries in Ferozabad, woollen carpets in Mirzapur, Silk sarees
at Kanziwaram etc. are mainly due to highly skilled labour for that particular industry
being available at the place.
4. Transport and communication facilities.
 Transport facilities are needed for transporting raw materials, parts and finished
goods. Generally industries have a tendency to locate the industrial units near the
railway station, highway or port areas.
 Railways are cheaper but involve delays. Road transport is quick, it is convenient for
door to door service, but it is costlier. So a balance should be achieved between the
two according to the need of the unit. Generally long distances are covered by Railway
transport and short distances by road transport. Communication facilities like mail,
telephone, telegraph etc. must be adequate. Regularity of service, safety, speed and
low cost are essential both for transport and for communication. Mumbai exhibited
the largest concentration of textile mills although away from cotton growing regions
and market, soley, because of existence of adequate, quick transport and
communication facilities.
5. Availability of power and fuel.
 Coal, electricity, oil and natural gas are the important sources of power in the
industries. The availability of reliable and cheap power supply is an important factor
in the location of electro-chemical industries, iron and steel industries, glass, pulp and
paper industries etc. for example, Tata iron and steel industry is established near the
coal mines of Bihar.
 However, because of the development of long distance transmission of electric power
this has not remained a deciding factor for plant location.
6. Climatic conditions.
 Climatic conditions largely affect certain production proces ses also the efficiency of
the employees. For example, textile mills require moist climate that is why most of the
textile mills are situated at Bombay and Ahmedabad. For agro-base industries like tea
and coffee or rubber plantations, climatic conditions play a decisive role in the
selection of the site.
 However, with the development of air-conditioning techniques, it is possible to
control the temperature as well as humidity in the factory according to the
requirements, though at the additional costs.
7. Availability of water.
 Water is used in industries for processing as in paper in chemical industries, for
generation of power in hydroelectric power plants and is also required for drinking
sanitary purposes etc. Depending upon the nature of plant water should be available
in adequate quantity and should be proper quality (clean and pure).
8. Ancillary Industries.
 The existence of ancillary industries in the nearby area may avail certain economic
advantages. Many industries such as processing and assembly industries are not
producing all the parts of their product but purchase some of the parts from ancillary
 industries producing it. The products produced by ancillary industries then forms a
raw-material for such industries.
9. Financial and other aids.
 For the development of backward regions central as well as Stale Government provide
certain incentives and facilities such as cash-subsidy, concessional financial assistance,
land, power and other facilities at cheaper rates, tax concessions etc.
10. Business and commercial facilities.
 For day-to-day management of finance and working capital needs, banking services
are considered highly desirable. Facilities for depositing surplus cash, discounting of
bills, sending outstation cheques for collection and withdrawals, for meeting the cash
shortages nearness to banking facilities is essential.
1.5 Urban, Suburban and Rural Location
A. URBAN AREA
Advantages
1. Excellent communication network.
2. Good transportation facilities for material and people.
3. Availability of skilled and trained manpower.
4. Factory in the vicinity of the market hence high local demand.
5. Excellent sourcing (subcontracting) facilities.
6. Good educational, recreational and medical facilities.
7. Availability of service of consultants, training institutes and trainers.
Disadvantages
1. High cost of land compared to rural area.
2. Sufficient land is not available for expansion.
3. Labour cost is high due to high cost of living.
4. Industrial unrest due to trade union activities.
5. Management labour relations are much influenced by union activities.
6. Municipal and other authority restrictions on buildings etc.
7. High labour turnover.
B. RURAL AREA
Advantages
1. Cheaper and ample availability of site.
2. Cheaper labour rates.
3. Less turnover of labours because of limited mobility.
4. No municipal restrictions.
5. Good industrial relations.
6. Scope for expansion and diversification.
7. No slums and environmental pollution.
Disadvantages
1. Poor transportation network.
2. No good communication facilities.
3. Sourcing of components and materials should be from outside.
4. Far away from market.
5. High absenteeism during harvest season.
6. No educational, medical and recreational facilities.
 C. SUBURBAN AREA
Advantages
1. Land available at cheaper rate compared to urban location.
2. Infrastructure facilities are developed by promotional agencies.
3. Because of nearness to city availability of skilled manpower.
4. Educational, medical facilities are available because of nearness to city.
Limitations
1. Due to concentration the suburban area will become crowdy and will become
urban in turn within short period.
2. High mobility of workers and hence higher labour turnover.
3. Government incentive and subsides to promote industry.

Table 1.1 Comparison between urban and rural locations

Sr
Factor Urban Location Rural Location
no.
Local demand is high so less Market far away which
1 Market distribution and transportation increase the distribution and
cost transportation cost
Adequate availability of skilled Difficult to get the skilled
2 Labour
labour labour
Cost and Cost of land will be high and
Adequate land will be available
3 availability of difficult to get land for future
at the lower cost
land expansion
Good transport facility is Non-availability of good
4 Transport
available transport system
Communication Availability of good Communication facilities are
5
facilities communication network not available
Municipal and
6 other civil Available Not available
amenities
Strictly measures are to be Lower efforts are required for
7 Pollution control
taken to control pollution control of pollution measures
Higher labour turnover due to
8 Labour turnover better opportunities in the Low labour turnover
vicinity of the area
High union activities resulting Least disturbances due to
9 Union activities
in strikes strikes and lockouts
Community services like
Community
schools services and Not available. It is to be
10 services (School,
recreation facilities are created by the firm on its own
hospital)
available
11 Cost of living High Low
Adequate storage facilities Warehouse and storage
12 Storage facilities
including cold storages facilities are not available
1.6 Plant Layout
 A plant layout is an arrangement of facilities and services in the plant. It outlines
relationship between production centers and departments.
 Plant layout can be defined as an optimum arrangement of industrial facilities,
including personnel, equipments, storage space, material handling equipments and all
other supporting services, in an existing or proposed plants. Plants layout can also be
defined as: “A technique of locating machines, processes and plant services within the
factory in order to secure the greatest possible output of high quality at the lowest
possible total cost of production.”
 Plant layout provides a broad framework within which production and many
administrative activities have to take place. All facilities like equipment, raw-materials,
machinery, tools, fixtures, finished goods, in process inventories, workers, material
handling equipments etc. are given a proper place in the plant layout. Therefore, the
plant layout has an important bearing on utilization of facilities, on manufacturing
methods, on control mechanisms, and on production costs.
An efficient plant layout is one that can be instrumental in achieving the following
Objectives:
1) Proper and efficient utilization of available floor space
2) To ensure that work proceeds from one point to another point without any
delay
3) Provide enough production capacity.
4) Reduce material handling costs
5) Reduce hazards to personnel
6) Utilize labour efficiently
7) Increase employee morale
8) Reduce accidents
9) Provide for volume and product flexibility
10) Provide ease of supervision and control
11) Provide for employee safety and health
12) Allow ease of maintenance
13) Allow high machine or equipment utilization
14) Improve productivity
Situations in Which Layout Problem May Arise
 A layout problem may arise in any one of the following situations:
1) When starting a new plant
2) Changes in the product design
3) Necessity of introducing a new product
4) Necessity of changes in the volume of production
5) Poor working conditions
6) Frequent accidents
7) Changes in location of the industry.
1.7 Principles of Plant Layout
1) 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.
 2) 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.
3) 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.
4) 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.
5) 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.
6) Principle of safety and 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.
7) Principle of minimum handling: A good layout is one that reduces the material
handling to the minimum.
1.8 Factors Influencing Layout
 While choosing the layout for a factory, the following factors should be taken into
consideration :
1) Management Policy. Management has to decide on many matters, e.g. nature and
quality of products, size of the plant, integration of production process, plans for
expansion, amount of inventory in stock, employee facilities etc.
2) Manufacturing Process. The type of manufacturing process, e.g. synthetic/analytical,
continuous/ intermittent and repetitive/non-repetitive, will govern the type of plant
layout.
3) Nature of Product. The type of product to be manufactured affects plant layout in
several ways. Small and light products can be moved easily to the machines whereas
for heavy and bulky products the machines may have to be moved. Large and heavy
equipment requires assembly bays. One or a few standardised products can better be
produced through product layout while process layout is more useful for producing a
large variety of non-standardized products. Quality and fragility of the product also
influences the layout.
4) Volume of Production. The plant layout and material handling equipment in the large
scale organisation will be different from the same in the small scale manufacturing
industry.
5) Type of Equipment. The use of single purpose and multi-purpose machines
substantially affects the plant layout. Similarly, noisy and vibrating machines require
special attention in the plant layout decision.
6) Type of building. The plant layout in a single storey building will be different from that
in a multi¬storey building. The covered area, the number of storeys, elevators and
stairs, parking and storage area all affect the layout.
7) Availability of total floor area. The allocation of space for machines, work-benches,
sub-store, aisles, etc. is made on the basis of the available floor area. Use of overhead
space is made in case of shortage of space.
8) Arrangement of material handling equipment. The plant layout and material handling
services are closely related and the latter has a decisive effect on the arrangement of
 production process and plant services. It is necessary to provide adequate aisles for
free movement of material handling equipment such as hand truck, fork truck etc.
9) Service facilities. The layout of factory must include proper service facilities required
for the comfort and welfare of workers. These include canteen, lockers, drinking
water, first aid etc.
10) Possibility of future expansion. Plant layout is made in the light of future
requirements and installations of additional facilities.
1.9 Types of Layout
Plant layout may be of four types:
1) Product or line layout
2) Process or functional layout
3) Fixed position or location layout
4) Combined or group layout
1) Product or line layout:
 Under this, machines and equipment’s are arranged in one line depending upon the
sequence of operations required for the product. The materials move from one
workstation to another sequentially without any backtracking or deviation. Under this,
machines are grouped in one sequence. Therefore materials are fed into the first
machine and finished goods travel automatically from machine to machine, the output
of one machine becoming input of the next, e.g. in a paper mill, bamboos are fed into
the machine at one end and paper comes out at the other end. The raw material
moves very fast from one workstation to other stations with a minimum work in
progress storage and material handling.
 The grouping of machines should be done keeping in mind the following general
principles.
a) All the machine tools or other items of equipment’s must be placed at the
point demanded by the sequence of operations
b) There should no points where one line crossed another line.
c) Materials may be fed where they are required for assembly but not necessarily
at one point.
d) All the operations including assembly, testing packing must be included in the
line.
 A line layout for two products is given below:

Fig.1.1 Product layout

Advantages:
a) Low cost of material handling, due to straight and short route and absence of
backtracking
b) Smooth and uninterrupted operations
c) Continuous flow of work
 d) Lesser investment in inventory and work in progress
e) Optimum use of floor space
f) Shorter processing time or quicker output
g) Less congestion of work in the process
h) Simple and effective inspection of work and simplified production control
i) Lower cost of manufacturing per unit
Disadvantages:
a) High initial capital investment in special purpose machine
b) Heavy overhead charges
c) Breakdown of one machine will hamper the whole production process
d) Lesser flexibility as specially laid out for particular product.
Suitability:
a) Mass production of standardized products
b) Simple and repetitive manufacturing process
c) Operation time for different process is more or less equal
d) Reasonably stable demand for the product
e) Continuous supply of materials
2) Process layout:
 In this type of layout machines of a similar type are arranged together at one place.
E.g. Machines performing drilling operations are arranged in the drilling department,
machines performing casting operations be grouped in the casting department.
Therefore the machines are installed in the plants, which follow the process layout.
 Hence, such layouts typically have drilling department, milling department, welding
department, heating department and painting department etc. The process or
functional layout is followed from historical period. It evolved from the handicraft
method of production. The work has to be allocated to each department in such a way
that no machines are chosen to do as many different job as possible i.e. the emphasis
is on general purpose machine.
 The work, which has to be done, is allocated to the machines according to loading
schedules with the object of ensuring that each machine is fully loaded. Process layout
is shown in the following diagram.

Fig.1.2 Process layout

Advantages:
 a) Lower initial capital investment in machines and equipment’s. There is high
degree of machine utilization, as a machine is not blocked for a single product
b) The overhead costs are relatively low
c) Change in output design and volume can be more easily adapted to the output
of variety of products
d) Breakdown of one machine does not result in complete work stoppage
e) Supervision can be more effective and specialized
f) There is a greater flexibility of scope for expansion.
Disadvantages:
a) Material handling costs are high due to backtracking
b) More skilled labour is required resulting in higher cost.
c) Time gap or lag in production is higher
d) Work in progress inventory is high needing greater storage space
e) More frequent inspection is needed which results in costly supervision
Suitability:
a) Products are not standardized
b) Quantity produced is small
c) There are frequent changes in design and style of product
d) Job shop type of work is done
e) Machines are very expensive
3) Fixed Position or Location Layout:
 In this type of layout, the major product being produced is fixed at one location.
Equipment labour and components are moved to that location. All facilities are
brought and arranged around one work center. This type of layout is not relevant for
small scale entrepreneur. The following figure shows a fixed position layout regarding
shipbuilding.

Fig.1.3 Product layout

Advantages:
a) It saves time and cost involved on the movement of work from one
workstation to another.
b) The layout is flexible as change in job design and operation sequence can be
easily incorporated.
c) It is more economical when several orders in different stages of progress are
being executed simultaneously.
d) Adjustments can be made to meet shortage of materials or absence of workers
by changing the sequence of operations.
Disadvantages:
a) Production period being very long, capital investment is very heavy
 b) Very large space is required for storage of material and equipment near the
product.
c) As several operations are often carried out simultaneously, there is possibility
of confusion and conflicts among different workgroups.
Suitability:
a) Manufacture of bulky and heavy products such as locomotives, ships, boilers,
generators, wagon building, aircraft manufacturing, etc.
b) Construction of building, flyovers, dams.
c) Hospital, the medicines, doctors and nurses are taken to the patient (product).
4) Combined layout:
 Certain manufacturing units may require all three processes namely intermittent
process (job shops), the continuous process (mass production shops) and the
representative process combined process [i.e. miscellaneous shops].
 In most of industries, only a product layout or process layout or fixed location layout
does not exist. Thus, in manufacturing concerns where several products are produced
in repeated numbers with no likelihood of continuous production, combined layout is
followed. Generally, a 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. In soap, manufacturing plant, the machinery
manufacturing soap is arranged on the product line principle, but ancillary services
such as heating, the manufacturing of glycerin, the power house, the water treatment
plant etc. are arranged on a functional basis.
1.10 Plant Layout Procedure
1. Collect the information about the product, process, etc. and record the data
systematically.
2. Analyse the data using various techniques of analysis.
3. Select the general flow pattern for the materials.
4. Design the individual work stations.
5. Assemble the individual layout into total layout in accordance with the general
flow pattern and the building facilities.
6. Coordinate the plan with plan for handling materials.
7. Complete the plant layout.
8. Convent the plant layout into floor plans that is to be used by the plant engineer
for installation of equipment.
1.11 Material Flow Patterns
 In order to achieve the production targets, the layout of plant is decided. Except, in
case of fixed plant layout, the material moves from one machine to another machine.
So, the movement of material is more in the plant in any kind of layout. Hence, it is
necessary to have effective flow of materials in the plant. Naturally, the minimum
movement of material can reduce the material handling cost as well as it reduces the
chances of damage of the material. To achieve, above objectives, the flow of material
in the plant called flow pattern is decided. Flow pattern starts from the entry of raw
material in the plant and it ends at when the raw material is converted into finished
product.
  The flow pattern of materials helps in eliminating bottle-necks, rushing and
backtracking and ensures good supervision and control.
Characteristics of good flow pattern:
 Flow pattern must be short, smooth and easy to understand.
 Flow pattern must be designed according to plant layout.
 Flow pattern should involve minimum movement of flow.
 Flow pattern should avoid repetitive path for the material, if unnecessary.
 Flow pattern should be such that the material flow is easily visible.
 The material flow systems can be classified on the basis of the availability of floor
space as.
1. Horizontal flow system: Usually devised for a single story building when the
flat floor area is available.
2. Vertical flow system: This system is used in case of multi-storey buildings
and limited' area is available.
 Following are different types of flow pattern which are mostly used in the plant layout.

Shortest route and must

have roads on both sides.
Plant area has long length
Straight line
and narrow width.
Unsuitable for longer
production lines.
Less difficulty in returning
empty containers.
Suitable for longer
production lines.
U-type Requires square like floor
area.
One side road link will be
required.

It is used when buildings

L-type: are wide compared to its
length

Requires roads on both

sides.
Suitable for longer
Serpentine production lines.
(Inverted S-Shape) Difficulty in returning
empty containers.
Requires square like floor
area.
Comb or dendrite Combination of flow pattern
arrangement

Used when the table is

rotary type

O type flow
Used for electrical system
production

Fig.1.4 Horizontal type flow system

 There also vertical type flow systems exists in multi-storey buildings. Following are the
various types of vertical flow patterns.

Fig.1.5 Vertical type flow system

 Factors governing flow pattern:
 Type of product to be manufactured.
 Number of varieties of product to be manufactured.
 Number of operations on each product.
 Number of sub-assemblies made up ahead of assembly line.
 Quantities of products to be manufactured.
1.12 Tools And Techniques For Plant Layout
 The quality and quantity of the data on various factors is required to develop a good
layout. The data is to be collected regarding the various process es, sequence of
operations, material flow, frequency of travel, space requirements, activities and their
relationships. Following are the various tools used for checking the effectiveness of
the plant.
1. Process charts—(operation process charts, flow process charts)
2. Travel Chart
3. Diagrams—(flow diagrams and string diagrams)
4. REL—(Relationship chart)
5. Templates
6. Scaled models
The process charts and diagrams are discussed in chapter on method study- chapter 3.
1. TRAVEL CHART
 The flow of material between functional areas of the plant is recorded on a From-To
chart. It records the distance and frequency of movements between various pairs of
departments. This chart is used to determine the degree of closeness between the
departments. It forms the basis for layout design that seeks to minimise the total
material handling costs.
The advantages of travel charts are:
i. It is a useful tool for movement analysis.
ii. It is helpful to locate the activities and backtracking.
iii. Useful for comparing alternative flows.
iv. Can be easily computerized as quantitative data is involved.
Procedure to draw the Travel Chart
 Departments or work centres are listed both row wise and column wise, in the same
sequence. Each intersecting square (cell) is used to record data from one department
to another. The entries in the chart are scattered on both sides of the diagonal.
 A typical travel chart is shown in Fig.

Fig.1.6 Travel Chart

 MBC represents number of moves from B to C.
 The entries below the diagonal represent backtracking.
2. REL (RELATIONSHIP CHART)
 The relative importance of having one department near another is displayed in
Relationship chart. Robert Muther developed the REL chart. Each diamond-shaped cell
in the chart shows the relationship if any between two functional plant areas. Two
entries come into the cells. The top entry is a letter that indicates the degree of
closeness of the relationship and the number below represents the important reason
for relationship.
 The relationship diagrams recognise the need for exploring “Relationship” rather than
calculating exact flows and costs. The requirements of closeness are expressed on a
scale.
 These pair-wise interdepartmental “closeness requirement ratings” are then used to
develop a suitable layout which satisfies as many pairwise relationship as pos sible and
to the extent possible.
 The relationship charts is shown in the Fig.

Fig.1.6 Relationship Chart

3. TEMPLATES
 This is the most common method of presenting the plant layout. These are two-
dimensional cut outs prepared by cardboard, coloured papers, etc. They are made to
scale and are placed on the scaled plan of the building drawn on the board. The
templates depict the plan of various activities like machine tools, work benches,
storages, etc.
Advantages
 Cheaper compared to model layout.
 Congestion, backtracking can be better visualised.
 Easy for interpretation.
 They can be conveniently moved on the board providing flexibility to evaluate various
feasible arrangements.

Limitations
  Interpretation is difficult for non-technical persons.
 It is difficult to visualise the impact of overhead facilities on the plant and process.
4. SCALE MODELS
 Three-dimensional models are the scaled models of the facilities. The models of the
plant and equipment with their appropriate scale are used in preparing the model
layout. They are usually made up of wood or plastic. These are costly.
Advantages
 Easy to visualise and explain. It facilitates the study of overhead structures and devices
like lighting, ventilation, safety features, etc.
1.13 Different Plant Layouts
 There different types of plant layout according the requirement and available space.
Following are the different plant layouts. This layouts are for references and the
position of various operations may change according to requirement.

Fig.1.6 Manufacturing shop layout

Fig.1.7 Automobile repair and service shop layout

 Fig.1.8 Thermal power plant layout
1.14 Computerized Package For Layout Analysis
1. Computerized Relative Allocation of Facilities Technique (CRAFT)
 Computerized Relative Allocation of Facilities Technique (CRAFT) is one of the plant
layout improvisation technique which was originally developed by Armour and Buffa.
The main aim of CRAFT is to reduce the transportation cost by interchanging of the
departments.
 Interchanging process is applicable to those departments which are either have
common border area or have equal space requirement. This interchanging process
continues till the transportation cost is minimum. Though method does not give the
layout which can give optimum cost but CRAFT output gives the good and close layout
in major aspects.
Following are the pre-requisites for CRAFT:
i. Initial layout showing total number of departments
ii. Area of each departments
iii. Cost matrix showing cost per unit distance
iv. Flow matrix
v. Number and location of fixed departments (if any)

Calculate transportation cost using flow matrix, distance matrix and cost matrix.

𝑚 𝑚
Transportation cost =  𝑖=1 𝑗=1 𝑓𝑖𝑗 . 𝑐𝑖𝑗 . 𝑑𝑖𝑗

Limitation of CRAFT analysis:

 It gives locally optimal solution only. Since CRAFT depends on initial layout, different
initial layout should be used as input to the CRAFT procedure.
 CRAFT may lead to irregular shapes of departments. So, manual finishing is necessary
before finalizing the layout.
 It is not always possible to exchange the department of common border having
unequal size without splitting the larger one.
2. Computerized Relationship Layout Planning (C0RELAP)
 It is one of the other method which is develops systematic layout using computer
algorithm. Initially it was developed by Muther and computer algorithm was
developed by R. C. Lee.
 Computerized Relationship Layout Planning (CORELAP) uses the A-E, I, O, U closeness
ratings, space requirements and maximum building length to width ratio to develop a
layout.
Following are the pre-requisites for CO RELAP:
i. Number of departments
ii. Area of each departments
iii. Closeness relationship as given by REL - Chart
iv. Weighted ratings for REL — Chart
Procedure to solve plant layout CORELAP:
Step 1: Collect the pre-requisite plant layout data as mentioned above.
Step 2: Rearrange REL - chart for each department in terms of matrix.
Step 3: Calculate TCR as shown above.
Step 4: The first department placed in the layout is the one with the highest TCR
value. If there is a tie, then choose the one with more A’s (E’s etc.)
Step 5: If a department has ‘X’ relationship with the first one, it is placed last in the
layout and not considered. If a tie exists, choose the one with the lowest TCR
value.
Step 6: The second department is the one with an A (or E, I... etc.) relationships with
the first one. If a tie exists, select the one with the greatest TCR value.
Step 7: If a department has ‘X’ relationship with the second one, it is placed next to
the last or last in the layout. If a tie exists, choose the one with" the lowest
TCR value.
Step 8: The next department is the one with an A (or E, I... etc.) relationship with the
already placed departments. If a tie exists, choose the one with the greatest
TCR value.
Step 9: The procedure continues until all departments have been placed.
Step 10: First selected department is placed in the middle. To place the other
department, placing rating is considered. Placing Rating (PR) is the sum of
the weighted closeness ratings between the department to enter the layout
and its neighbors.
Step 11: The department which has greatest PR value is selected till the final
placement is done.
Step 12: After placement total score is calculated based on each department’s
distance and closeness with each other.