Plant location

Plant location may be understood as the function of determining where the plant should be located for maximum operating economy and effectiveness.

1. PLANT LOCATION Prepared and Presented By- Ravi Shankar Verma 2015A126MBA Dept . Of Business Management CCHAU

2. INTRODUCTION Plant location may be understood as the function of determining where the plant should be located for maximum operating economy and effectiveness . The selection of a place for locating a plant is one of the problems, perhaps it is one of the task for the entrepreneur while launching a new enterprise Selection of a location is on pure economic considerations will ensure an easy and regular supply of raw material, labor, efficient plant layout to reduce cost of production Once a mistake is made in locating a plant, it becomes extremely difficult and costly to correct it.

3. When the business is newly started . existing business has outgrown its original facilities and expansion not possible . The volume of the business or the extent market necessitates the establishment of branches A lease expires and the landlord does not renew the lease. Social and economic reasons i.e., in-adequate labor supply and shifting of the market. Need for Plant L ocation

4. Steps in Location   With in the country or outside Selection of the region Selection of the locality or community Selection of the exact site

5. 1.With in the country or outside The first step in locating a plant is to decide whether the plant is located domestically of internationally . Due to globalization the issue of home or foreign is gaining more relevance . choice of particular country depends on such factors like political stability, export & import quotas, currency, and exchange rates  .

6. 2: Selection of the region Availability of raw material Nearness to the market Availability of power Transportation facilities Suitability of climate Government policy Competition between states

7. Availability of raw material:- As a manufacturing unit is engaged in conversion of raw materials in to finished products, it is very essential that it should be located in a place where the supply of raw materials is maximum. Advantages :- Reduce in cost of transportation. Regular and proper supply of raw material Saving in the cost of storage of material  Nearness to the market :- Since goods are produced for sale, it is very essential that a plant should be located near to the market. Advantages :- Reduction in cost of transportation of finished goods to the market Availability of render prompt services to the consumer  The ability to adjust production program to suit the likes and dislikes of consumers. 

8. Availability of power :- Power is essential to move the wheels of an industry. Industries using electricity have to be located where the supply of power is available more Example:- Steel industries are located near to power industries  Transport facilities: Transport facilities are very important for bringing raw material to the factory. Transport facilities are very important for carrying finished goods to the market. place which is well connected by rail, road, air and water transport facilities is suitable for plant location. Example :- Mumbai is best suitable for transport facilities to locate industries 

9. Suitability of climate : It is important for two reasons: There are certain industries which mainly depends on nature of production. Example :- Humid climate for Cotton textiles and Jute. 2. Based on climate which also affects the labor efficiency Government policies:- Government policies like licensing policy Freight rate policy Establishing a unit in the public sector in remote areas Institutional finance and government subsidies Example :- NANO car projected  Competition between states:- Various states offer investments, subsidies and sales tax exemptions to new units. The incentives may not be big but help to large scale industries but not for small and medium scale industries. Example :- Pasco steel company in Orissa

10.   3: Selection of the community The selection of a locality in a particular region influence following factors :-  1.  Availability of labor :- Labor is an important factor in the production of goods. A sufficiency of labor supply at reasonable wages is very essential for smooth and successful working of the industries. Now a days the influence of skilled labor on plant has lost because of mobility.   2 : Finance and research facilities: Adequate capital is essential for the successful working of any organization A place where facilities for raising capital are available attracts new industries. The manufacturing unit has to be dynamic i.e., it should always be on the look out for new technology.

11. 3. Civic amenities for workers:- Besides of working conditions inside the factory, the employees need facilities outside it. Recreation facilities such as clubs, parks, schools for children etc. must be provided for the employees. Example : All facilities provided by BHEL to their employees 4. 4. Availability of water & fire:- Some industries require plenty of water for there working. Example : NHPC power plant which uses water to produce power Some industries require fire for there working. Example : NTPC power plant which makes fire from coal to produce power The selection of a locality in a particular region influence following factors :- continued….  

12. 4: selection of the exact site Soil , size and topography: For the industries based on agriculture require fertile soil to locate a plant. The area of the land should be such as to accommodate not only the existing purpose but offer for scope for future expansion also. The topography of the place deserves consideration to some extent. A hilly rocky and ruff terrain is unsuitable for plant location. 2. Disposal of waste :- The problem of the disposal of waste is common to many industries, particularly chemical, sugar, steel and leather industries. The site selected for location of the plant should have provision for the disposal of waste. Example : NTPC use coal ash ( waste ) to construct bricks

13. Plant Location For Sugar mill In India Highest Production in U.P.

14. This Area Have More Production Of Sugar Cane Availability Of Raw Material In Lakhimpur , Sahjahnpur,Sitapur,Khiri , Balrampur District of U ttar P radesh are Maximum..

15. Raw material(Sugarcane) Transportation-Easy To carry produce at location of plant Near to Market For Power Supply (Produced By Plant( Heatwater )),Sugar, Organic Fertilizer , Zyme,Bio product etc Wastage Management(Near to canal ,river and High way is near to exact site

16. Plant Location For Sugar cane Factory