2.1 Site Selection Criteria and Factors

TASK 2
2.1 SITE SELECTION CRITERIA AND FACTORS

Every businessperson is met with the problem of determining the best site for
location of his plant or factory. Plant location refers to the choice of district and the collection
of a specific place for setting up a business or factory.
But the choice is made only after considering cost and benefits of different other
sites. It is a planned choice that cannot be changed once taken. If at all changed only at
significant loss, the place should be designated as per its own supplies and conditions. Each
individual plant is a case in itself.
Businessman should try to make an effort for best or ideal location. An ideal
location is one where the cost of the creation is kept to smallest, with a large market share,
the smallest risk and the supreme social gain. It is the place of maximum net benefit or which
gives lowest unit cost of production and distribution. For realising this impartial, small-scale
entrepreneur can make use of locational analysis for this resolution.
The important considerations for selecting a suitable location are given as natural or
climatic conditions, availability and nearness to the sources of raw material, transport costs-in
obtaining raw material and also distribution or marketing finished products to the ultimate
users. Besides, it needs to access to market: small businesses in retail or wholesale or services
should be located within the vicinity of densely populated areas, availability of Infrastructural
facilities such as developed industrial sheds or sites, link roads, nearness to railway stations,
airports or sea ports, availability of electricity, water, public utilities, civil amenities and
means of communication are important, especially for small scale businesses , and also
availability of skilled and non-skilled labour and technically qualified and trained managers.
In the other side, government influences should be included. Both positive and negative
motivations to inspire an entrepreneur to choose a specific location are made available.
Positive includes cheap overhead facilities like electricity, banking transport, tax relief,
supports and liberalization. Negative incentives are in form of limitations for setting up
industries in city areas for motives of pollution control and decentralization of industries.
Lastly, residence of small business entrepreneurs want to set up nearby their homelands.
One study of locational considerations from small-scale units revealed that the native place or
homelands of the entrepreneur was the most important factor. Heavy preference to homeland
suggests that small-scale enterprise is not freely mobile. Low preference for Government
incentives suggests that concessions and incentives cannot compensate for poor
infrastructure.
2.2 LAYOUT PLANNING
Plant layout is a significant result as it represents long-term promise. An ideal plant

layout should provide the best relationship among output, floor area and manufacturing
process. It enables the production process, lessens material handling, time and cost, and lets
elasticity of operations, easy production flow, makes economic use of the building,
encourages actual operation of manpower, and delivers for employee's suitability, security,
comfort at work, maximum experience to natural light and freshening. It is also significant
because it touches the flow of material and processes, labour efficacy, supervision and
control, use of space and development potentials etc.
An efficient plant layout is one that can be instrumental in achieving the proper and
efficient utilization of available floor space. It has to ensure that work proceeds from one
point to another point without any delay. Besides, provide enough production capacity and
reduce material handling costs. Furthermore, an effective pant layout also need to reduce
hazards to personnel, utilise labour efficiently, increase employee morale and reduce
accidents. Lastly, a layout can also provide for volume and product flexibility, provide ease of
supervision and control, provide for employee safety and health and allow ease of
maintenance.
The plant layout also responsible to enable the preparation of machines, apparatus
and other physical facilities in a strategic method within the factory premises. A
businessperson must own a know-how to lay down a proper layout for new or existing plants.
It differs from plant to plant, from location to location and from industry to industry. But the
simple ethics leading plant layout are more or less same.
In addition, plant layout is a lively rather than a still concept meaning thereby if
once done it is not permanent in nature rather improvement or revision in the existing plant
layout must be made by keeping a track with growth of new machines or apparatus,
improvements in industrial process, changes in materials handling devices etc. But, any
revision in layout must be made only when the savings resulting from revision surpass the
prices involved in such reconsideration.

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2.1 Site Selection Criteria and Factors

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TASK 2

2.1 SITE SELECTION CRITERIA AND FACTORS

2.2 LAYOUT PLANNING

Plant layout is a significant result as it represents long-term promise. An ideal plant

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