industrial location analysis

8/7/2019 Industrial Location Analysis

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Location of an industry is an important management

decision. It is a two-step decision: first, choice of general

area or region and second, the choice of site within the

area selected. Location decision is based on theorganizations long-term strategies such as technological,

marketing, resource availability and financial strategies.


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` The general location of the plant.

` The selection of a particular site.


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Availability of Raw Materials

Proximity of Markets

Tra s ort Fa ility

Availability of Effi ie t a d Chea Labour.

Availability of Power a d Fuel


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Climatic and Atmospheric Conditions

Availability of Water

Availability of Capital

Social and Recreational acilities

Business and Commercial acilities

Existence of Related Industries


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Community Attitude

Community acilities

Transportation acilities

Topography

Waste disposal

Ecology and Pollution

Size of land

Supporting Industries


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` Raw material procurement

` Proximity of market

` Availability of labour, their training and

compensation.` Availability of power.

` Availability of finance.

` Miscellaneous considerations like donations,

subsidies, taxes and non-interference bygovernment or local bodies, war and political

effects and other facilities or bottle mecks.


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Ser i e

Steam Gas Water Air or High pressure Electricity Sewerage

Special manufacturing requirement

Other manufacturing equipments

Manufacturing Machinery

Production processContinuous Intermittent Interrupted

ProductNature Volume Value


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Productivity

Productivity is nothing both the reduction in wastage of

resources. The resources may be men, machines,

materials, power, space, time, building etc.

It may also be defined as human efforts to produce more

and more with less and less inputs of resources as a

result of which the benefits of production may be

distributed more equally among maximum number of

people.


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A) Internal actors

B) External actors

A) Internal actorsi. National resources and their mobility.

ii. Availability of capital

iii. Taxation

iv. Govt. laws and restrictions concerning business.

v. Extent of market competition.

vi. Technical and other training facilities.


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Factors affecting productivityFactors affecting productivity

B) External actors

i. Plant Layout

ii. Material Handling

iii. Product design: R&D, simplification,

standardization etc.

iv. Work study

v. Machinery and equipment

vi. Quality controlvii.Management techniques including- Human

Resource Management.


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Reasons for Low-Productivity

requent machine break downs

Absence of managerial control

Idle men

PoorqualityConfusion in machine scheduling

Storage of materials

Excess inventory

Large quantities of reworked material


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How to Increase Productivity

Wastage of Materials

Machine breakdown

Waiting on the part of men and equipment

Excessive handling

Poor management

Poor working conditions

Political effects


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Productivity in Various Concerns

Labour Productivity

Material Productivity

Machine Productivity

Selling, Distribution orAdmin Productivity

Overall Productivity


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Main Contributors To Productivity

ImprovementIncentives

Human Relations

Cost Control

Training about Productivity

Application of New Technology

Proper Planning and SchedulingDesign the Product

Management Skill

Standardization and work simplification


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Benefits rom Increased Productivity

A) Benefit to Concern:-

I. More Profit

II. Higher productivity ensures stability of the concern

III. Higher productivity and higher volume of sales

provides opportunity for expansion of the concern

and wide spread market.

IV.It provides over all prosperity and reputation of the

concern.


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B) Benefit to Workers:

i. Higher productivity permits more wages.

ii. More wages permit better standard of living of

workers.

iii. Thus more productivity means better workingconditions for workers which also help in

maintaining better health for workers.

iv. Higher productivity yields improved moral and

greater satisfaction for workers.


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C) Benefit to Consumers:

i. More productivity ensures betterquality of product.

ii. It also enables reduction in prices.iii. It provides more satisfaction to consumers.


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D) Benefit to Nation:

i. It provides greater national wealth

ii. It increases per capital income.

iii. It helps expansion of international market with thehelp of standardized and good quality goods.

iv. It improves standard of living.

v. It helps in better utilization of resources of the

nation.


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Automation

Continuous Automation

Segmented Automation

Non-ManufacturingAutomation


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Advantages ofAutomation:1. Grater output per rupee of labour.

2. More output per rupee invested in facilities.3. Lesser floor space is required.

4. Increased safety for operators.

5. Automatic production schedules.

6. Increased uniform quality.

7. It transfers skill knowledge and efforts from man tomachine, therefore, high rate of production.

8. Less scrap.

9. Less inventories.

10.It requires very less expert staff, rest semi-skilledworkers.

11.It is beneficial to the general public, as it raises the

income of individuals.


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Disadvantages ofAutomation

1. Greater capital investment.

2. Less manufacturing flexibility.

3. During less demand the management cannot use the

automated plant for any other purpose.

4. The immediate effect of automation is increasedunemployment.

5. Expensive down time, as the failure of one part may

result in the shut down of the whole line where

automation is there.


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Suitabilityi. Where a product design is stable for such a long period in

which the cost of automation can be written off.ii. Where the volume for continuous manufacture is adequate

and steady for a fairly long time so as to make the

installation economical, profitable and to permit the use of

single purpose equipment.

iii. Where the manufacturing method demands a high degreeof manual work, and adoption of automation presents

attractive cost saving potential.

iv. Where the machines are so complex or work at such a

high speed, that it is not possible to work with efficiency by

manual methods.v. Where the product is so hazardous that it cannot possibly

be controlled by manual methods, e.g.. Radioactive

materials.


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industrial location analysis

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