OPERATIONS MANAGEMENT

PLANT LOCATION

NEED FOR SELECTION

Business is newly started The existing business expansion

Establishment of branches Land lease expires

Plant location involves two major activities

1. To select a proper geographic region2. Selecting a specific site with in the

region

1. Localization / centralization-means concentration of similar type of industries at some particular place. E.g. textile in Mumbai.

2. Delocalization /Decentralization-means spreading of similar type of industries at different places. E.g. banking industries.

Two condition to the establishment of an industry at a particular place

Factors affecting location & site decisions

1. Availability of raw materials

2. Proximity to market

3. Integration with other parts of organization

4. Availability of labor and skills

5. Availability of Amenities

6. Transport & communication facilities

Factors affecting location & site decisions (contd…)

7. Suitability of climate

8. Availability of services

9. Regional regulations

10.Room for expansion

11.Safety requirements

12.Others like low interest on loans,

special grants, living standards

Factors (Max. Points : 10) L-I L-II L-III

Availability of raw materials 9 5 3

Proximity to market 8 6 7

Integration with other parts of organization 3 6 4

Availability of labor and skills 6 4 6

Availability of Amenities 6 7 6

Transport & communication facilities 8 7 8

Suitability of climate 6 3 6

Availability of services 6 6 4

Regional regulations 8 6 7

Room for expansion 9 8 7

Safety requirements 8 6 4

Others 9 7 2

TOTAL POINTS 86 71 64