405- Production and Operations Management S.Y.

BBA (Sem-4)

UNIT-2 Plant Layout and Material Handling (15%)

 PLANT LAYOUT:

 Definition of plant layout:

“Plant layout is physical arrangement (present or proposed) of various building,

production department, technical utilities and location of various machines within each
production department. The process of preparing plant layout for a new manufacturing
or service set-up is called plant layout design.”

 Factors affecting plant lay-out design:

Following factors decide types of plant layout

1. What to manufacture?
Before everything else, this question is answered to decide area of business.
There are many items like cement, petroleum, sugar, bulk chemical, etc. which are not
possible to manufacture on small scale. They are manufactured on mass production
basis in large capacity continuous production system. Factories of such products will
have product layout.
Many products are specially manufactured as per customer order. Factories of
such products will have process layout. Apart from this, certain businesses require
certain minimum volumes. It is impossible to conceive and create cement factories,
petroleum refineries and fertilizer plants on small scale. They will therefore have large
area lay-out.
2. How much to manufacture?
This decision will affect number of machines required; number of people who
will be working in production area, size and capacity of technical utilities etc. this will
have a direct impact on layout.

3. Government rules and regulation:

There are various rules and regulations of government which are concerned with
production operations. Factory act is one such example. FOR EXAMPLE: according to
factory act, it is necessary to have more than one entry and exit for any production
building. The act also decides minimum size of door for every building. The same
factory act has guidelines for various safety provisions for workers. Another EXAMPLE
is rules related to air and water pollution. Because of this reason, all plant layouts have
to provide some space for pollution control equipment and plant. Various rules related
to construction of public building also have direct effect on layout of many service
generating units. Because of these rules, we see very high ceilings in college class room
and two wide stair cases at two separate locations.

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4. Manufacturing technology. (How to manufacture?)

Different kinds of machines require different utilities. Their size and shape are
also different. FOR EXAMPLE: boilers used in textile industries can utilize gas, coal or
diesel as the source of energy. Some machines need steam or compressed air. According
to the selection of machine, utilities to be provided will change. As per the selection of
technology, number of people required to operate machines may change modern
machines are compact, more automatic and will lesser man power

5. Cost of land:
In urban areas where land is expensive, plant layout can have multi stored
buildings. In remote area where land is easily available single level manufacturing area
are designed.

6. Number of employees, visitor and male female area:

Plant layout also considers safe and convenient movement of people including
production employees, employees of other department and external visitor. This aspect
of estimating number of people is extremely important in service layouts like;
restaurant, bank, hospital, etc. This will also decide size of utilities like waiting area,
packing lots, toilets, change room etc.

7. Provision for material handling:

Within production department, there will be requirement to shift material from
one department to another department, or from one to another machines in certain
industries, material is shifted using special equipment. Plan layout design must also
accommodate movement of such equipment.

8. Storage of semi-finished articles:

It may happen that there is a time gap between two successive stages of
production. Because of this reason, it may be necessary to store semi-finished articles in
production area. There should be a provision in plant layout for storage of such semi-
finished articles.

9. Nature of production operations:

Certain production processes are dangerous in nature. One example is electro
plating. There are many EXAMPLES like melting of metal ore. Some other
manufacturing operations may generate noise, vibrations, dust or smoke. They are
separated from other operations.

10. Nature of raw material:

Storage and movement of raw material discussed above point no. 7 depend
heavily on nature of raw material. Certain raw materials are volume occupying
material. FOR EXAMPLE: cotton raw materials are seasonally available raw material.

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They are purchased in bulk quantity. FOR EXAMPLE: agricultural product. One has to
provide for large warehouses for such material. Some raw materials are explosive in
nature. They are stored in separate areas.

11. Type of industry:

There are certain similarities in design of manufacturing units of the same
industry. FOR EXAMPLE: all power plants manufacture electricity by consuming gas
as a fuel will always look similar or alike. Types of machines will be of similar nature.

12. Planning of future expectation:

Certain facilities like roads, water tank etc, are created considering future scale of
operations. It’s difficult later on to add such facilities when production capacity is
expand. Because of this reason, such facility or utilities are requirement and hence plant
layout changes considerably.

13. General factors:

There can be many general factors like utilization of natural sunlight play are
important role in selecting location of machines. There are certain other rules which can
be considered out of common sense. FOR EXAMPLE: one should not keep machines or
material in front of door, start cases or elevator. It is also matter of common
understanding nearer to the door of department. Plant layout should also have
permitted for convenient Turing of external transportation equipment and for internal
material handling equipment.

 TYPES OF PLANT LAYOUT:

Depending upon nature of business, varieties of finished products & types of

machines, designs of plant layout shall vary. The arrangement of machines in one
department & arrangement and sequence of various departments shall also vary.
Because of this reason, organizations are seen working with any of the following types
of plant layout.

1. Process lay-out:
It is that of plant lay out in which machines, equipment and department
arranged according to manufacturing or business processes. These types of lay out are
usually related to intermittent production systems. Here, department are created by
grouping similar types of machines. In other words, department are curtained to carry
out particular types of processes & hence the name ‘process lay out’. The purpose of
various department is not create a signal product or not to impart a signal feature on
continuous basis for manufacturing purpose of a large quantity of a signal product. The
purpose of any department is to do that process on any product.

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A typical EXAMPLE is that of an engineering company like LARSEN &

TOUBRO. They are manufacturing various products as per customer order.

TURNING SHOP LATHE MACHINES HEAT

OFFICE GEAR CUTTIJNG TREATMENT
SHOP, MILLING SHOP
MACHINES
RAW MATERIAL DRILLING MACHINE
STORE WORK SHOP WELDING
SHOP

OPEN AREA, GARDENS ELECTRO

PLATING
SHOP

FINISHED GOOD STORAGE, FINAL ASSEMBLY

DISPATCH PAINT
SHOP

Here, turning department shall accommodate various types & size of lathe
machines. Same is the case with drilling department, welding department etc. first,
orders of customer with people design, drawings and specifications are received. After
that, technically competent people in production department shall decide about what
are the various processes to be performed in order to manufacturing that specially
designed product. It is obvious that according to design & specifications of customer,
each product shall be unique. Because of this reason, what processes we shall be
performing for different finished products shall be differing from product to product.

FOR EXAMPLE:

Product No 1 sequence can be as following:

Turning shop milling shop welding electro plating paint shop

Product No 2 sequence can be as following:

Drilling shop heat treatment shop welding electro plating paint shop

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Each depart shall any product that is taken to them. It is usually not possible to
decide permanent predecessor successor relationship between various departments.
Still some generalizations can be made like raw material store shall be the first
department always; similarly, paint shop shall be one of the last departments.

1.1 Advantages of process lay out:

1) It is possible to manufacturing a different products or many product with

different features. Machines are not so much specialized that they can
manufacture only single product. It reduces risk of doing business. FOR
EXAMPLE, Larsen & Toubro company can manufacture equipment for defence,
chemical industries, power generation units, fertilizer plant, petroleum refineries,
and dairy industry. A stationery manufacture can make accounting book, note
book & also new year dairies. A Parma company can make many types of
medicines for various diseases.

2) Investment in machineries is less as machines are less automatic and less

specialized. Because of this reason initial investment in plant & machines is not
very high. Interest cost & department expenses are lesser in initial period of the
project & hence it is easier to achieve breakeven point.

3) It is easy to expand capacity because capacities of various departments not are

exactly balanced.

4) It is easy to give subcontracting or to do out sourcing only for selective processes.

Because of this there is a great deal of flexibility in production planning.

5) There is a greater incentive for better performance. It is possible to co-relate

output with the workers & with the group of workers.

6) Problems & break down & maintenance schedules in one department may or
may not affect all other department. If at all problem of one department gets
passed on to another department, that department that happens after
considerable time period.

7) Various department are specializes and hence supervision and c appraisal are
more effectively done.

1.2 Disadvantages of process layout:

1) Material handling is complex & usually it is not possible to fully automate

material handling faction. This is because of the reason that from time to time,

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we have to buy, store, and use various material inputs having different shapes,
types & size, weights, dimensions. This is decided by design & specifications
given by different customers. Because of this, cost of material handling is more
wastages of materials are another possibility.

2) Production planning is complex because there are many products. At times we

have to do production planning for entirely a new type of products.

3) As processes are not going be 100% automatic, rate of production is slow. The
pre unit cost of manufacturing is high.

4) Machines are not specially created to manufacture one product and hence they
are not 100% automatic. Because of this reason, quality assurance is a different
job.

5) Area & volume utilization in plant lay out design are different to achieve.

6) As machines are less automatic, there is more reliance on man power. The labour
is therefore high.

2. Product Lay-out:

These lay out are designed to manufacture signal product or a few variants of the
same product according to continuous production philosophy. Here, the purpose is to
make one product in large quantity on continuous basis. The machines & production
processes are specially modified or designed to contribute toward manufacture of that
definite product.

In this case, the lay out follows technical sequences of processes which are
decided to make one product continuously & hence the name ‘product lay out’ once
created, it is not possible to make different product.

Product lay out can be classified into two categories:

PRODUCT LAY OUT

Line processing type Continuous flow type

(Assembly type) Example: cement,
Example: Automobile factories petroleum, fertilizers, sugar

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2.1 Line Processing Type (Assembly Type) Lay Out:

Here finished product is an assembly of various components & spares. The
manufacturing shall involve combining various components on assembly line. FOR
EXAMPLE, a car is an assembly of various sub-assemblies wheel assembly engine
assembly, seat assembly, door assembly etc. Each of these assemblies are created by
combining various spares & components on assembly lines. After, different sub-
assemblies are thought on main assembly line &final product is created. They lay out
May look as following:

Line Line Line Line Line

1 2 3 4 5

FINAL
ASSEMBLY
LINE

2.B CONTINUOUS FLOW TYPE LAY OUT:

In this lay out a few varies of raw material are processed on special purpose
machines. Often these machines are grouped as a closed plant. It is sometimes not
possible to visualize the production process. The end product is another finished
material manufacturing in bulk. It is usually not an assembly of a many components.
Here, input material get totally de-composed (mostly by chemical reactions) & then
produce another finished material. Cement plants, petroleum refineries, fertilizer

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factories usually have such plant lay-out. Often, these lay out are totally automated
systems. From one end we can see different raw material entering & from other end we
can see finished material being rolled out.

Raw materials enter

Closed automatic CLOSED

AUTOMATIC Finished goods roll out
Plant PLANT

2.3 Advantages of product lay out:

1) Labour cost % are less in total costing as machines are of special purpose &
automatic.

2) material handling can be made 100% automatic as material are repetitively

handled per unit cost of handling is less & material wastages in handling is
minimum.

3) Mass production at very fast rate is possible. It is possible to enjoy economies of

scale. Per unit cost of manufacturing is low.

4) Work in progress inventories are less as manufacturing is fats & automatics.

5) Less number & various of finished goods are manufacturing. Less varieties of
input material are needed. Always same types of standard input are to be
purchased.

6) Machines are automatic & hence quality assurance is easy.

7) Compact automatic machines are used & hence better floor area utilization is
possible.

2.4 Disadvantages of product layout:

1) These lay out not flexible. You cannot manufacture any other product than what
the layout is designed for risk of doing business is therefore more. Company

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fortunes are tied with only one type if business. FOR EXAMPLE: a cement
factory cannot make any other product even if cement demands are low.

2) These lay out are capital intensive. Machines are costly, high capacity automatic
machines. Initial project investment is high because of this fixed cost like interest
& depreciation costs are high. It is therefore difficult to achieve breakeven point.
This also increases risk of doing business.

3) Expansion is not easy as it to increase capacity of one department in isolation. If

capacity is to be inverse, usually a new plant is to be created.

4) The break down in one department shall instantly affect another department.
This is because work in progress inventory are virtually non-existent and even if
they are found in between two stages, they can hardly last for minutes.

5) Production capacity adjustments are not possible by out sourcing of few

operations. FOR EXAMPLE, in a petroleum refinery, it is not possible to
outsource one or two stages.

6) The lay out are associated with high capacity high investment plants. It is not
possible to work with lower capacities even during lean demand seasons. To
exploit heavy investment in plant & machines, plant usually runs at full capacity.
During lean demand period therefore there will be a huge accumulation of
finished goods.

3. Combination Layout (Hybrid Layout):

It is difficult to find out a production system which adopts either a product

layout or a process layout. Usually an actual layout can be mixed types of layout which
is having some features of product lay out & some features of process lay out. Thus, the
lay out category can only differ by degree & not by kind. This happens because the
business philosophy of many companies is such that then manufacturing few standard
products on continuous basis and they also entertain special customer order.

FOR EXAMPLE: A heating appliance manufacturing usually manufacture standard

domestic heating applications like water heaters, irons, ovens toasters etc. these are
standard products which are manufactured in a product layout. Apart from this the
same company entertains special orders for large size heating appliances for industrial
heating applications. They also manufacture large size cooking ovens for ships of
Indian navy. This second business area creates some facilities similar to a process
layout.

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4. Cellular Layout:

In this type of layout different machines or workstations are grouped into what
is referred to as cell. These cells carry out certain processes or do manufacturing of
certain components on continuous basis. This cell become kind of miniature product
Layout Island within a large process layout. FOR EXAMPLE: there is a device called
‘Thermostat’. It is used as an automatic temperature controller as it cuts off electric
power or gas supply when certain temperature inside that appliance is reached.
Because of this reason, for all kinds of heating appliances, thermostat is mandatory
component. It is usually manufactured in a separate department on continuous basis.
The layout of that department is like a small factory having product layout within a
large factory which is a process layout. Similarly, clock manufacturing or wristwatch
manufacturing units will necessary have a separate department or cell in which 3-4
types of quartz mechanisms are continuously manufactured.

5. Fixed Position Layout:

This is special type of layout in which product to be created is so bulky that it
cannot be moved from one machine to another machine. The product is created in one
large area & people, machines & services move around the product to create it. FOR
EXAMPLE: manufacture if air- craft, ship, satellite launchers, bridges etc.

Machine 1 Machine 2

Work
Machine 5
centre-
3
Machine 4

6. Service Layout:

These layout are meant for service industries like banking, retailing, hospital etc.
as we know, services are not stored & usually are given by direct inter action with
customer. There are simple services like lawyers’ services, banking, and insurance. They
do not require many machines. Here emphasis is no bringing client face to face with
generator so services. Whereas complex services like a five star hotel, a hospital, here,
there many machine & equipment are also. Here, the emphasis is on to bring various
utilities to clients a part from facilitating client interaction
with generator so service.

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Note: Some time different between product layout & process layout is asked. It is
advice sable to compare various features of both types of layout in vertical format.

 Principles of good plant layout

1) The principle of minimum travel

Men and materials should travel the shortest distance between operations
so as to avoid waste of labour and time and minimise the cost of material
handling.
2) Principle of sequence
Machinery and operations should be arranged in a sequential order. This
principle is best achieved in product layout, and efforts should be made
to have it adopted in the process layout.
3) Principle of usage
Every foot of available space should be effectively utilised. This
principle should receive top consideration in towns and cities where land
is costly.
4) Principle of compactness
There should be a harmonious fusion of all the relevant factors so that the
final layout looks well integrated and compact.
5) Principle of safety and satisfaction
The layout should contain built in provisions for safety for the workman.
It should also be planned on the basis of the comfort and convenience of
the workman so that they feel satisfied.
6) Principle of flexibility
The layout should permit revisions with the least difficulty and at a
minimum cost.
7) Principle of minimum investment
The layout should result in savings in fixed capital investment, not by
avoiding installation of the necessary facilities but by an intensive use of
available facilities.

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 MATERIAL HANDLING
Concepts
Many types of materials like raw-materials, purchased components, material-in-
process, finished goods, packaging materials, maintenance and repair supplies,
scrap and waste and reject or rework are used and handled in manufacturing
organizations. These materials are of various size, shape and specific features. The
layout of facilities is directly affected by the nature of these materials. For e.g.
large and bulk material, heavy materials, fluids, solid, flexible and inflexible
materials and materials requiring special handling to protect them from conditions
such as heat, cold, humidity, light, dust, flame and vibration affect the layout of
facilities for handling, storing and processing these materials.

Definition
“Material handling is defined as the art and science of moving, packaging and
storing of substances in any form.”

Principles of Material Handling

A) Materials should move through the facility in direct flow pattern, minimizing
zigzagging or backtracking.
B) Related production processes should be arranged to provide for direct material
flows.
C) Mechanized material handling device should be designed and set up so that
human efforts is minimised.
D) Heavy and bulk materials should be moved the shortest distance during
processing.
E) The number of times each material is handled should be minimised.
F) System flexibility should allow for unexpected breakdown of material handling
equipment, changes in production system technology etc.
G) Mobile equipment should carry full loads all the times.

 TYPES MATERIAL HANDLING EQUIPMENT

There are different methods by which this equipment can be classified.

A) Classification on the basis of form of material

1) Handling equipment for solid material like

(i) Hand carts

(ii) Cranes
(iii) Fork lifts
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(iv) Conveyer belts

2) Handling equipment for liquids like
(i) Pipes
(ii) Barrels
(iii) Tanks
(iv) Canals (For waste water mainly)
3) Handling equipment for gases like
(i) Cylinders
(ii) Pipelines

B) Classification as per direction of movement

There are mainly three types of movements

(i) Vertical movements
Elevator and pipes can be used for vertical movements

(ii) Horizontal movements

Hand-carts and fork lifts can be used for horizontal movements

(iii)
Inclined movements
Pipelines, moving cranes and inclined conveyor belts can be used for
inclined movements

C) Classification as per starting point & destination of material

movements

(i) Intra department handling equipment

There can be special equipment for material movement within a
department or production area, it is called as intra department handling
equipment.
(ii) Inter department handling equipment
Equipment are meant for material movement between two departments, it
is called as inter department handling equipment.

D) Classification as per source of power

All types of handling of material require one or another source of power.
The following charts show equipment classification as per source of power.

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Examples
Type Examples
Manually powered Hand-carts, movement of crates
Fuel powered Fuel consuming cranes, forklifts
Gravity as the source of power Down ward liquid movement by
pipelines for liquid.
Elevators and conveyor belts for
solid.
Online electric power source Elevators
Battery operated Battery operated fork-lifts.

E) Classification as per basic mechanism

The following are some classification of equipment as per basic mechanism

 Forklifts
 Cranes
 Conveyors belt
 Elevators
 Hand carts
 Crates and boxes
 Pipe line

These all equipment has certain technical specialities. Some are fixed path
equipment. Some are variable path equipment.

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F) Classification of handling equipment as per degree of

automation

Material handling can be done by fully automatic equipment. Examples are robotic
systems automation storage automation retrieval (ASAR) system for storage of
gases& liquids in tanks. Computerized & numerically controlled (CNG) handling
system. Fully automatic system is usually fixed path handling system. Some
handling equipment are semi-automatic.

G) CLASSIFICATION AS PER PURPOSE

There are two broad objectives of handling storage & transportation. The
equipment meant for safe also called material for safe storage are called
material handling equipment. They are also carefully designed considering
area utilization safety of material ease in storing & in retrieval.

H) CLASSIFICATION AS PER PATH OF MOVEMENT

Movement of material can be of fixed & repetitive nature or it can be variable in

continuous production systems when one single item is manufactured repetitively.
We have seen that cement petroleum fertilizer are such manufacturing systems. In
these industrial as processes are standard movement of material is also of similar
type. Because of this reason we see movement of material between two fixed path
materials handling equipment.

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