The concept of Facility Location, the factors affecting facility

location in respect to Textile, Sugar, Chemical industry and

Online retailing

Operations Management

SUBMITTED TO
Ms. Divya Pereira
ASSISTANT PROFESSOR
DEPARTMENT OF MBA
AIMIT, Mangalore

SUBMISSION ON: 28/03/2019

SUBMITTED BY,
MR JOHN PRASHANTH SALDANHA
1816074
 I MBA
OM – 4
AIMIT, Mangalore
Facility Location

Facility location is the process of determining a geographic site for a firm's operations. In other
words, Facility location refers to the location of the facility which has optimum operating economy
and effectiveness. Managers of both service and manufacturing organizations must consider all the
economic considerations when assessing the desirability of a location, which ensure an easy and
regular supply of raw materials, labour force, efficient plant layout, proper utilization of production
capacity and reduced cost of production.

The selection of a location for the facility is most important decision. An ideal location contributes
to smooth functioning of an organization. A bad location, on the other hand, a severe handicap for
any enterprise which results in negative outflow. Once a mistake is made in location of the facility,
it becomes extremely difficult and costly to correct it, especially large plants are concerned.

The four steps can be followed for the selection of the optimum location

Step1: Within the country or outside

After globalization and liberalization, deciding on domestic or international location have received
greater relevance. It is a process of deciding a plant location within or outside of the county. If the
management decides on foreign location, the next logical step is would be to decide upon a country
for location after analyzing various factors like political stability, Currency and exchange rates,
cultural and economic peculiarities, natural and physical conditions.

Step 2: Selection of the Region

The Selection of a region out of the many regions of a country is the second step in a plant location.
One must carefully analyze availability of the raw materials, feasibility of the transport and market,
suitable climate, government policy etc. which plays a vital role for the smooth functioning of a
facility.
Step 3: Selection of the community or locality

Selecting a locality or community within the selected region is the third step in a plant location.
Ex: In the state of Karnataka, Bangalore south region may have cheap skilled labour and civic
amenities for workers, continuous power and water supply, finance and research facilities. The
momentum of an early start exercises a considerable influence on plant location.

Step 4: Selection of the exact site

The selection of an exact site in a chosen locality is the fourth step in plan location. After deciding
the locality, one must decide on various available sites which serves optimum level of efficiency.
Topography, soil, size, disposal of waste are the factors which influence the selection of the exact
site.

Step 5: Decide on optimum site

The main objective of the selection process of a location is to find best location which serves
optimum results with efficiency.

Factors affecting facility location decision in reference with

Textile industry:

The silk textile industry are located in Andhra Pradesh: NarainPet, Assam: Sualkuchi, Bihar:
Bhagalpur, Gujarat: Surat, Cambay, Jammu Kashmir: Srinagar, Karnataka: Bangalore, Anekal,
Ilkal, Kollegal, Chhattisgarh: Champa, Raigarh, Tamilnadu: Kanchipuram, Salem. The reason for
choosing specific location as follows:

 Availability of the various types of silk raw material

 Transport feasibility
 Research centers
 Financial services
 Suitable climate for process, water availability
 Skilled labour availability
Sugar Industry

Sugar mills are located near sugar growing areas, because of two factors: Perishability and Weight loss.
Maharastra, Tamilnadu, UP, Karnataka: Bijapur, Belgaum, Bellary locations are analyzed and affecting
factors for location of sugar mills are
 Availability of the Raw Material,
 Topography
 Labour
 Energy
 Market and Government
 Technology

Chemical Industry

 Access to raw materials

 Emergency services
 Energy supply (Local Coal Mines, Gas pipe line)
 Skilled labour
 Topography (Large Flat site)
 Government and Environment policies
 Transport

Online Retailing

Some of the factors to be noted while choosing the online retailing site or location as follows

 Types of Good sold: According to types of good sold, because certain good need certain
type of locations. Ex: Convivence goods and specialty goods.
 Know your customers and their whereabouts and find the location which matches the
requirement of the customers.
  The better visibility and accessibility with proper boards and parking facility, traffic
regulations
 Determine if the types of businesses nearby are compatible with your store. For example,
a high-end fashion boutique may not be successful next door to a discount variety store.
Position it next to a nail or hair salon, which tend to draw the same demographic of
customers, to more optimal results.
 Along with the base rent, consider all location-based costs involved when choosing a retail
store location.

References
 [Location Factors] Sugar Mills in North & South India, Why Cuba called Sugar bowl. (2019, March
26). Retrieved from Murnal: https://mrunal.org/2013/07/location-factors-sugar-mills-north-
south-india-cuba-called-sugar-bowl.html

 GK Today. (2019, March 20). Retrieved from Silk Industry of India:

https://www.gktoday.in/gk/silk-industry-of-india/

 K. Aswathappa, K. S. (2019). Production and Operation Management. In K. S. K. Aswathappa,

Production and Operation Management (pp. 139-149). Mumbai: Mrs.Meena Pandey for
Himalaya Publishing House Pvt Ltd.

 Trivikram, S. (2019, March 24). Plant Location Decisions and Factors Affecting Plant Location.
Retrieved from My Venture Pad: https://myventurepad.com/plant-location-decisions-factors-
affecting-plant-location/

 WATERS, S. (2019, March 2). Small Business. Retrieved from Choosing retail Location:
https://www.thebalancesmb.com/choosing-a-retail-store-location-2890245