The Importance Of Determining A Plant Location

The Importance Of De bournining A Plant postThe localization of function of a ingraft or forwardness is the geographical positioning of an operating room relative to the in perpetrate resources and other surgical trading deeds or customers with which it interacts. Andrew Greasly (2003) identified trinity main soils why a localization of function decision is required. The first causa is that a new comp each has been created and compulsions a facility to build harvest-tides or refund a dish to its customers. The second reason is that in that location is a decision to re rate an existing business due to a bring outlet of federal agents much(prenominal) as the need for larger premises or to be closer to a particular customer base. The third reason is relocate into new premises in tramp to expand operating theatres.Decisions with regards to where an geological formation can locate its plant or facility atomic number 18 non interpreted often, nonetheless they s till track down to be actu tout ensembley strategic for the firms pro run shortability and long-term survival. An disposal which chooses an in tolerate location for its premises could sanction from a number of factors, and would pay back it ambitious and expensive to relocate. Location decisions tend to be taken much often for service operations than manufacturing facilities. Facilities for service related businesses ar usu everyy smaller in size, less salutely, and argon located in a location that is convenient and easily hearty to customers (Russell and Taylor, 2003). When deciding where to locate a manufacturing facility contrasting reasons apply, much(prenominal) as the price of constructing a plant or factory. Although the nearly imporant factor for a service related business is access to customers, a set of different criteria are authorised for a manufacturing facility (Russell and Taylor, 2003). These include the nature of the delve force, proximity to supp liers and other market places, distri plainlyion and transportation costs, the availability of energy and its cost, confederacy infrastructure, government regualtions and taxes, amongst others (Russell and Taylor, 2003).Location StrategyThe facilities location paradox is angiotensin converting enzyme of study issueance in all types of business. It is important to notice the different problems that may arise whilst trying to choose a suit adequate to(p) location. Normally, the decision on siting proceeds in two stages in the first, the general area is elect and and then a detailed survey of that area is carried out to find equal come ins where the plant or facility could be located (Muhlemann, Oakland and Lockyer, 1992). However, the net decision as to where to locate a facility is do by victorious into consideration more detailed requirements. The pursuit are a number of factors which might influence the pickax of location (Muhlemann, Oakland and Lockyer, 1992).Proxim ity to market fundamental laws may compliments to locate their facility close to their market, to be adequate to lower transportation costs, and most importantly, to be able to suffer their customers with a better service. If the plant or facility is located close to the customer, the organisation would be in a better position to provide just-in- epoch sales pitch, to oppose to fluctuations in pack and to react to field or service problems.availableness of labour and skills a number of geographical areas pass traditional skills but it is in truth difficult for an organisation to find a location which has the arrogate skilled and unskilled labour, both readily available and in the in flip(p) quantities. Even so, new skills can be tought, borderes simplified and key force play moved from one area to another.Availability of amenities organisations would prefer to locate their facilities in a location which provides good external amenities such as housing, shops, commwholey operate and communication systems.Availability of inputs a location which is near main suppliers come out help to reduce cost and abide module to follow suppliers easily to discuss feel, technical or delivery problems, amongst others. It is besides important that real supplies which are expensive or difficult to procure by transport should be readily available in the locality.Availability of services there are six main services which need to be considered whilst a location is being chosen that is to say gas and electricity, water, drainage, disposal of waste and communications. An assessment moldiness be make of the requirements for these, and a location which provides most or all of these services will be more attractive than another which does not.Room for expansion organisations should pull up stakes room for expansion deep down the chosen location unless long term forecast convey very accurately that the plant will neer down to be altered or expanded. This is oft en not the slickness and thus adequate room for expansion should be allowed.Safety requirements trusted intersectionion and manufacturing units may present potential hazards to the surrounding neighbourhood. For example certain plants such as nuclear power stations and chemical factories should be located in remote areas.Site cost the cost of the site is a very important factor, however it is undeniable to prevent agile benefit from jeopardising the long-term plans of an organisation.Political, cultural and economic situation it is to a fault important to consider the political situation of potential locations. Even if other considerations demand a particular site, knowledge of the political, cultural and economic difficulties can help oneself in taking a number of decisions.Special grants, regional taxes and import/export barriers it is often advantegous for an organisation to build its plant or facility in a location where the government and local authorities often offer spe cial grants, low-interest loans, low rental or taxes and other grants.Location Selection TechniquesThe location selection ferment involves the identification of a suited region/country, the indentification of an appropriate area at bottom that region and finally equivalence and selecting a site from that area which is suitable for an organisation. The avocation are a number of analytical techniques from the several that have been developed to assist firms when choosing a location.Weighted ScoreThe weithed scoring technique tries to take a mountain chain of considerations into pecker, including cost (Greasly, 2006). This technique, which is also referred to as factor rating, consists of find out a attend of factors that are relevant to the location decision. Each factor is then inclined a weighting that conveys its importance compared with the other factors. Each location is then scored on each factor and this score is multiplied by the factor value. The alternative with th e highest score is then chosen (Greasly, 2006).Locational Break-Even AnalysisThis technique sticks ingestion of cost-volume analysis to make an economic comparison of location alternatives. An organisation would have to see the resolute and variable costs and graphing them for each location, thus determining which one provides the lowest cost. Locational break-even analysis may be carried out mathematically or graphically. The procedure for graphical cost-volume analysis is as follows (Falzon, 2009)Determine the unyielding and variable costs for each location.Plot the total cost (i.e. the fixed + the variable) lines for the location alternatives on the graph.Choose the location with the lowest total cost line at the expected payoff volume level.2.1.2 Plant Layout check to Andrew Greasly (2007), the layout of a plant or facility is concerned with the physical situation of resources such as equipment and storage facilities, which should be designed to facilitate the effectual flow of customers or materials through the manufacturing or service system. He also noted that the layout design is very important and should be taken very seriously as it can have a monumental refer on the cost and efficiency of an operation and can involve real investment in time and gold. The decisions taken with regards to the facility layout will have a direct influence on how efficiently proletarians will be able to carry out their jobs, how much and how fast goods can be produced, how difficult it is to automate a system, and how the system in place would be able to respond to all(prenominal) changes with regards to product or service design, product mix, or demand volume (Russell and Taylor, 2003).In many operations the initiation of a new layout, or redesign of an existing layout, can be difficult to change once they are implemented due to the significant investment required on power points such as equipment. Therefore, it is imperative to make accredited that the polity decisions relating to the organisation, method and work flow are made before the facilities are laid out rather than trying to fit these threesome into the layout. This is an important area of output signal and operations precaution since it is dealings with the capital equipment of the organisation which, in general, is difficult to relocate once it has been put into position.Muhlemann, Oakland and Lockyer (1992) explained that the plant layout change is rather complex, which cannot be set down with any finality, and one in which experience plays a great part. The author also explained that it is impossible for an organisation to design the perfect layout, however he discussed a number of criteria which should be followed to design a good layout, namely the followingMaximum FlexibilityA good layout should be designed in such a style that modifications could rapidly take place to meet changing circumstances, and thus should be devised with the possible future needs of the operation in mind.Maximum Co-ordinationThe layout should be designed in such a way that entry into, and disposal from, any department or usable area should be carried out in the most convenient way to the issuing and recieving departments.Maximum engage of volumeThe facility should be considered as cubic devices and maximum single-valued function is to be made of the volume available. This linguistic rule is useful in stores, where goods can be stored at considerable high school without causing any inconvenience.Maximum visibilityThe authors win insists that all the workers and materials should be readily observable at all times and that there should be no hidden places into which goods or development might get set and forgotten. Organisations should be careful when they make use of partitioning or covert as these may introduce undesirable segregation which reduces the effective use of floor space.Maximum accessibilityThe machinery, equipment and other installations sh ould not in any way obstruct the servicing and maintenance points, which should be readily kindly at all times. Obstructing certain service points such as electricity and water mains could hinder the business process in place.Minimum distance and Material handlingAll movements taking place within the plant should be both necessary and direct. Handling work does add the cost but does not increase the value, thus any unecessary movement should be avoided and if present, topd. It is best not to handle the material and information, however if this is necessary it should be reduced to a minimum by making use of appropriate devices.Inherent SafetyAll processes which might constitute a jeopardy to either the staff or customers should not be accessible to the unauthorised. disregard exists should be clear marked with uninhibited access and pathways should be clearly defined and uncluttered.Unidirectional FlowAll materials which are being utilise in the product process should alway s flow in one direction, starting from the storage, passing through all processes and facilities, and finally resulting in the ruined product which is later dispatched for storage or sold direct to the customer. instruction CoordinationSupervision and communication should be assisted by the location of staff and communication equipment in place within the chosen layout.2.2 Quality warinessThere is a widespread acceptance that organisations view prime(a) as an important strategic core competence and a vital competitive weapon which should be used to gain a competitive return at the expense of rivals. Several organisations have been able to reep a number of benefits, such as substanstial cost savings and higher revenues, aft(prenominal) implementing a quality improvement process into their operations. Subsequently, this led them to invest substantial measurements of money yearly on implementing and sustaining quality programmes and intiatives.The American National Standards Ins titution (ANSI) and the American Society for Quality authorisation (ASQC) define quality as the sum total of features and characteristics of a product or service that bears on its ability to pay off given needs. Similarily, Feigenbaum (2005), who is an American quality control expert, has defined quality as the total composite product and service characteristics of marketing, engineering, manufacture, and maintenance through which the product and service in use will meet the expectation by the customer. Put simply, this refers to an organisations ability to manufacture a product or deliver a service which satisfy the customers requirements and needs, and which line up to conditions.Muhlemann, Oakland and Lockyer, authors of Production and trading operations steering (1992), noted that organisations must be dedicated to the continous improvement of quality and must implement systematic control systems that are designed to prevent the merchandise or delivery of products or s ervices which do not set to requirements. To facilitate this process, organisations should first set up a quality policy statement which describes their general quality orientation and which is used to assist as a framework for action. Once set up, top circumspection would be required to secure that is it understood at all levels of the organisationidentify the needs of the organisations customersevaluate the organisations ability to meet these needsmake reliable that all the materials and services supplied fit the required banners of efficiency and performancecontinously vituperate the workforce for quality improvementassess and monitor the quality management systems in place.2.2.1 Quality Control and Assurance in the Conversion mental process radiation therapy Wild (2002) has noted that the capability of the conversion process directly influences the degree to which the product or service conforms to the given specification. If the conversion process is capable of producing products or services at the specified level, then the products or services are provided at the desired quality level. Once the specification of the output is known and an appropriate process is available, management must get a line that the output will conform to the specification. In order to achieve this physical object Ray Wild (2002) has defined three different stages which are defined in figure 2.1 each discussed below.Figure 2. The stages, processes and procedures of quality control and authorisationEssentials of Operations direction by Ray Wild (2002)Control of Inputs in the first place accepting any items as inputs, organisations must make sure that they conform to the required specifications and standards. Normally, before items are supplied to an organisation, they are subjected to some form of quality control by the supplier. The organisation might also ask its suppliers for information about the quality of the items whilst they are being prepared, ask for a duplicat e of the final brushup documentation, or ask a third society such as an insurance company to make sure that all the items supplied conform to the required quality standards.Even so, organisations still find the need to inspect the items supplied once they are recieved and before they are inserted into the conversion process. This inspection can be carried out by either inspecting every item recieved from suppliers, or by making use of the acceptance sampling procedure, which consists of taking a random sample from a larger batch or lot of material to be inspected. Organisations might also make use of the vendor rating procedure whereby suppliers are rated by taking into account a number of quality related factors such as the plowshare of acceptable items recieved in the past, the quality of the packaging, and the price.Control of ProcessAll manufacturing organisations must make sure that appropriate inspection is carried out during operations to ensure that defective items do no t proceed to the next operations, and also to settle when the process is most likely to produce faulty items so that safe adjustments could be adopted (Ray Wild 2002). The quality control of the doing process is facilitated by making use of control charts, which convey whether the process looks as though it is performing as it should, or alternatively if it is going out of control. One of the benefits of this procedure is that it helps management to take action before problems really take place. Ray Wild (2002) also notes that organisations should establish procedures for the selection and inspection of items which are used in the conversion process, for the recording and analysis of data, scrapping of defectives, and for feedback of information.Control of OutputsOrganisations must ensure that the qulity inspection of output items is carried out effectively since any undetected defective items would be passed on to the customer. The inspection of output items is normally carrie d out by making use of a sampling procedure, such as acceptance sampling, or by carrying out exhaustive checks. Ray Wild (2002) notes that it is vital for an organisation to have in place suitable procedures designed for the collection and retention of inspection data, for the correction, replacement or further examination of defective items, and for the adjustment or modification of either earlier inspection or processing operations in order to eliminate the production of defective items.2.2.2 HACCPNowadays, the pabulum attention is responsible of producing safe products and also for conveying in a transparent manner how the resort of provender is being planned, controlled and assured. In order to do so, organisations in the food industry need a system which will ensure that food operations are designed to be safe and that potential hazards are taken into account (Mitchell, 1992). One such system is the Hazard Analysis of particular Control Points which is a scientific and sy stematic method used to assure food safeguard, and a tool for the development, implementation and management of effective safety assurance procedures (Ropkins and Beck, 2000). The HACCP is known to be one of the best methods used for assure product safety and is considered as a prerequisite for food manufacturing companies who wish to export their products into international markets.The objective of the HACCP system is to guarantee that the safe production of food by implementing a quality system which covers the complete food production chain, from the promary sector up to the final consuming of the product (Fai joke and Bhairo-Beekhoo, 2007). It is capable of analysing the potential hazards in a food operation, identifying the points in the operation where the hazards may take place, and deciding which of these may be harmful to consumers (Mitchell, 2002). These points, which are referred to as the critical control points, are continously monitored and remedial action is set u p if any of these points are not within safe limits. The HACCP is the system of choice in the management of food safety one which is passing promoted by the food safety authorities in the United States, Canada and European Union.2.3 Just-In-Time scheduling2.3.1 Scheduling in ManufacturingDecision making with regards to scheduling has become a very important factor in manufacturing as well as in service industries. Scheduling is a decision making process whereby limited resources are portiond to specific tasks over time in order to produce the desired outputs at the desired time (Psarras and Ergazakis, 2003). This process helps organisations to allocate their resources properly, which would further enable them to optimise their objectives and achieve their goals. A number of functions, conveyed in figure 2.2, must be performed whilst scheduling and controlling a production operation.Figure 2. Functions performed in scheduling and controlling a production operationAdopted from the j ournal,Production scheduling in ERP systems, by Psarras Ergazakis (2003)In manufacturing systems, scheduling is highly dependent on the volume and variety mix of the manufacturing system itself. bulk process-type systems, which normally make use of a flow (product) layout where a standard item is produced in high volumes, make use of specialised equipment dedicated to achieve an optimal flow of work throughout the system (Greasly, 2006). Greasly notes that this is very important since all items follow the same sequence of operations. One of the most important objectives of a flow system is to make sure that production is kept at an equal rate in each production that takes place. This could be ensured by making use of the line balancing technique, which makes sure that the output of each production stage is equal and that all resources all fully utilised (Greasly, 2006).2.3.2 Just-In-TimeThe Just-In-Time PhilosophyThe just-in-time philosophy originated from the Japanese auto shap er Toyota after Taiichi Ohno came up with the Toyota Production System whose aim was to interface manufacturing more closely with the companys customers and suppliers. This particular philosophy is an approach to manufacturing which seeks to provide the right amount of material when it is required, which in turn leads to the reduction of work-in-progress inventories and aims to maximise productiveness within the production process (Singh and Brar, 1991). The authors, Slack, Chambers and Johnston, of Operations Management (2001) defined the JIT philosophy as a disciplined approach to improving overall productivity and elimination of waste. They also state that it provides for the necessary quantity of parts at the right quality, at the right time and place, while using a minimum amount of facilities, equipment, materials and human resources. Thus, put simply the JIT system of production is one based on the philosophy of total elimination of waste, which seeks the finish rationality in the way production is carried out.Bicheno (1991) further states that JIT aims to meet demand instantaneously, with perfect quality and no waste. In order to achieve this, an organisation requires a whole new approach in how it operates. Harrison (1992) identified three important issues as the core of JIT philosophy, namely the elimination of waste, the pursuit of everyone and continous improvement. The following is a brief description of these three key issues (adapted from Operations Management by Andrew Greasly, 2006).Eliminate WasteWaste may be defined as any activity which does not add value to the operation. Ohno (1995) and Toyota have identified seven types of waste, which apply in many different types of operations, in both manufacturing and service industries. All of these types of wastes are displayed in figure 2.3 below.The involvement of everyoneOrganisations that implement a JIT system are able to create a new culture where all employees are encouraged to continously improve by coming up with ideas for improvements and by performing a range of functions. In order to involve employees as much as possible, organisations would have to provide training to staff in a wide range of areas and techniques, such as Statistical Process Control and more general problem solving techniques (Andrew Greasley 2002).Figure 2. Types of wastes present in different types of operationsOperations Management by Andrew Greasly (2002)Continuous ImprovementSlack and Johnston (2001) note that JIT objectives are often expressed as ideals. Futhermore, Greasly (2002) states that through this philosophy, organisations would be able to get to these ideals of JIT by a continuous stream of improvements over time.The Benefits of Just-In-TimeAccording to Russell and Taylor (2003), after fives years from implementing JIT a number of U.S. manufacturers were able to benefit from 90 partage reductions in manufacturing cycle time, 70 percent reductions in inventory, 50 percent reduct ions in labour costs, and 80 percent reductions in space requirements. These results are not achieved by each and every organisation that implements a JIT system, however JIT does provide a wide range of benefits, includingReduced inventory ameliorate qualityLower costsReduced space requirementsShorter lead timeIncreased productivityGreater flexibilityBetter relations with suppliers alter scheduling and control activitiesBetter use of human resourcesIncreased depicted objectMore product variety2.4 Health and Safety ManagementThe worldwide Labour Organisation (ILO) and the World Health Organisation (WHO) define occupational wellness as the promotion and maintenance of the highest degree of physical, mental and loving well-being of workers in all occupations the prevention amongst workers of departures from health caused by their working(a) conditions the protection of workers in their employment from risks resulting from factors adverse to health and the placing and maintenance of the worker in an occupational environment adapted to his physiological and psychological capabilities. some(prenominal) countries have introduced legislation which requires employers to manage the health and safety of their employees, and others who might be affected (Waring, 1996). To honour health and safety legislation, organisations have found it necessary to introduce active programmes of accident prevention. The preparation of a properly though-out health and safety policy, which is continously monitored, could dramatically reduce or eliminate injuries and damage to health (Muhlemann, Oakland and Lockyer, 1992).2.4.1 Responsibilities for SafetyAll employees in an organisation should be active in creating and maintaining healthy and safe working conditions which are aimed to avoid accidents. Once a health and safety policy is established in an organisation, roles and responsibilities should be allocated within the management structure (Muhlemann, Oakland and Lockyer, 1992). As with other areas such as quality and production within an organisation, health and safety would alone be able to progress successfully if all employees are fully co-operative and committed in doing so. A number of organisations have encouraged this total involvement by creating safety representitives, committees, and group discussions whereby all employees in a particular unit meet periodically for discussions about safety (Muhlemann, Oakland and Lockyer, 1992).2.4.2 Planning for Safety self-opinionated planning is required to ensure effective planning for health and safety in all workplaces. A health and safety policy should be part of a continous review process which has no tolerance for accidents. This could only take place if the organisation in question adopts a strategy of never-ending improvement (Muhlemann, Oakland and Lockyer, 1992). It should set the scene from the top with regards to top management beliefs, intentions, priorities and requirement from managers and wor kforce (Waring, 1996). The overall plan should be made up of the basic elements conveyed in figure 2.4 below.