Production Planning and Control

Lecture #3
Yosef Manik, PhD March 03, 2016
Dean of the Faculty of Industrial
Technology

Del Institute of Technology

Sitoluama – Laguboti
Toba Samosir 22381
North Sumatera
INDONESIA
E-mail: yosef.manik@del.ac.id
 Managing Production Facilites

©2016 Yosef Manik

 Learning Objectives
• Describe the concepts of plant location and plant layout

• Identify the various factors to be considered for selection of plant

location from state/area to the specific site

• Distinguish among the alternative patterns of plant layout

• Discuss the various factors influencing the choice of an initial layout

and its subsequent modification
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 Location Strategy

Significance

 Plant location or the facilities location problem is an important

strategic level decision making for an organization

 Improper location of plant may lead to waste of all the

investments

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 Location Strategy

Influencing Factors

 Controllable factors: Proximity to market, supply of materials,

transportation, labor and wages, external economies, capital

 Uncontrollable factors: Government regulation, climate

condition, supporting industries, community attitude,
infrastructures

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 Location Strategy

Dominant Factors Specific for Manufacturing Company

 Labor supply and wages

 Proximity to market
 Proximity to supplier
 Proximity to material
 Infrastructure

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 Location Strategy

Dominant Factors Specific for Service Company

 Proximity to market
 Location of competitors
 Residential density
 Traffic flow
 Site visibility

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 Facility Layout

Definition

 An optimum arrangement of facilities including personnel,

operating equipment, storage space, material handling
equipment and all other supporting services along with the
design of best structure to contain all these facilities

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 Facility Layout

Definition and Goal

 Definition: An optimum arrangement of facilities including

personnel, operating equipment, storage space, material
handling equipment and all other supporting services along with
the design of best structure to contain all these facilities
 Goal: To maximize the profit by arrangement of all the plant
facilities to the best advantage of total manufacturing of the
product.

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 Facility Layout

Specific Objectives

 Streamline the flow of materials through the plant

 Facilitate the manufacturing process
 Maintain high turnover of in-process inventory
 Minimize materials handling and cost
 Provide for employee convenience, safety, and comfort
 etc.

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 Facility Layout

Design Considerations:

 Higher utilization of space and equipment

 Improved flows of material, information, and people
 Improved employee morale and working condition
 Improved customer/client interaction
 etc.

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 Facility Layout

Classification of Layout

 Process-oriented layout
 Product-oriented layout
 Fixed position layout
 Combination
Depends on:
- Variety of product
- Volume of production

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©2016 Yosef Manik