plant location manas & group

PRESENTATION ON

PROJECT M ANAGEM ENT

SELECTION OF SITE &

LOCATION OF TH E PROJECT

Guided by: Prof. Subhash Dixit

Group M em bers

Sonali D C-1 8

M ugdha G C- 1 6

Safiya S C- 46

M anas C Ex-03

M anoj L C- 1 3

Tushar S C- 37

H eena S C-07

Plant Location

Plant location decisions are

strategic

long term and

non repetitive.

Why does location analysis arise ?

A new m anufacturing or service is to be

set up.

Existing operations are d ifficult to

expand .

Add itional facilities due to growth in

business.

Changes in Industrial policy.

Product developm ents.

Location Analysis

D em ographic Analysis

Trade Area Analysis

Com petitive Analysis

Traffic analysis

Plant Location

Poor location leads to :-

H igher Cost

D ifficult m arketing

D ifficult Transportation

Substandard Q uality.

REGIONAL FACTORS

Proxim ity to the m arket.

When required?

The product is fragile.

The product spoils easily.

The prom ptness of service is required .

The product is cheap but transport costs

are m ore.

Proxim ity to the m arket.

Benefits of market proximity.

Adm inistrative problem s are reduced .(Octroi)

L iaison and keep an eye on dealers and

d istributors.

Com m issions to m iddlem en are reduced

Recovery from custom ers is easy ,tim e saving .

Proxim ity to Raw m aterials.

Why required?If RM constitutes large portion of the product cost

the firm should get its requirem ent at the right tim e

and price.

RM is of a perishable nature.

Expensive transport.

The weight of RM is substantially reduced on

processing.

Proxim ity to Raw m aterials.

Inventory costs can go up .

Follow up with supplier is costlier.

Tracking supply is costlier.

Replacem ent of defective item s becom e

costlier and further affects the delivery

com m itm ent of the m anufacturer.

K inds of Raw M aterials

Gross Materials :-

They loose weight during the process of

transform ation.

E.g. iron ore,coal,sugarcane etc.

Gross Materials

• Steel plants are located in B ihar, WB and

Orissa because of proxim ity to iron ore and

coal m ines

• Gas based fertilizer plant of RCF is located

near Vaishet because of proxim ity to Gas via

ONGC plant at U ran.

• N aphtha based fertilizer plant M angalore

Fertilizers is located near port because of

proxim ity to seaport as it uses im ported item s.

Pure materials

These m aterials add weight to the finished

product in the process of m anufacture.

E.g. Cotton textiles,woolen,biscuit factories

etc.

In this case the finished goods m arket

should be nearer the factory as the final

product has becom e bulky.

Proximity to Infrastructural Facilities

Power – alum inum and steel industry.

Water – chem ical industries.

Water treatm ent – coke and Pepsi.

D rainage facilities.

Scrap d isposal.

Proxim ity to Transport facilities.

Structure of transportation costs :-

Characteristics of com m od ity.

Average d istance of shipm ent.

M ed ium of shipm ent.

Proxim ity to Labor and Wages

Labor should be easily available.

Im porting labor is costly and has

adm inistrative problem s.

No cost incurred on accom m odation .

Training facilities to build up skills.

Skilled em ployees are available if ITI’s etc

are nearby.

Attitude to labor problem s.

Com m unity attitude towards industries.

Political clim ate.

Attitude of Governm ent towards labor

unions..

Legislation and Taxation

Policies of state and local bod ies

regard ing licenses, build ing codes, labor

laws etc.

Incentive packages and tax holidays.

The above costs influence the final costs

of the product.

Clim ate

Suitable clim ate for specific products

m ay be required .

H igh hum id ity for Textiles.

Low hum id ity for adhesives.

Low tem perature for inflam m able

chem icals.

SITE FACTOR

Site Factors

Land suitability.

What is the soil structure of the land .?

Whether it can bear the load of foundations?

If land is purchased at cheap rates but

requires considerable m od ifications then it

m ay finally turn out to be expensive.

Site Factors

Whether plot size is sufficient of present factory?

Whether plot size is sufficient for future

developm ent.?

As a thum b rule the plot size m ust be five tim es

bigger than the present plant size.

Site Factors

Supporting services like

Crane

Forklifts

Third part contractors etc.

COMMUNITY FACTOR

It im plies :-

Accom m odation

Education

Entertainm ent

Transport facilities.

Com m unity Factor

Accom m odation is required for all outstation

residents.

It should be easily available, cheap and near som e

public transport stop. BEST or Railway station.

The em ployee should be able to reach his place of

work with ease.

Com m unity Factor… …

Com m unication facilities should be easily

available.

M ed ical facilities should be nearby with

com petent technology and hospitalization

facility.

Com m unity Factor… …

Com m unity Factor… …Com m unity Factor… …

In the sam e township educational facilities like In the sam e township educational facilities like

schools, colleges and technical institutes schools, colleges and technical institutes

should be available.(e.g. L& T and RCF have should be available.(e.g. L& T and RCF have

their own d iplom a colleges).their own d iplom a colleges).

Entertainm ent facilities like cinem a, children Entertainm ent facilities like cinem a, children

parks, clubs etc. should be nearby.parks, clubs etc. should be nearby.

Com m unity Factor…

What is the com m unity attitude towards work?

Whether hard working or not?

What is their attitude towards incom ing

businessm en?

Whether helpful and cooperative or otherwise?

The above decisions can m ake or break an industry.

L egal Issues of Project Management

Project Terms

Outsourcing

Communication

Risk Insurance

Arbitration or Mediation C lause

BACK GROU ND NOTE

Incorporated in 1 945 as TELCO

Leader in com m ercial vehicles segm ent in

every segm ent.

Acquisition of Jaguar and Land Rover

“I saw families riding around on

scooters with kids standing up and

the mother carrying a baby and

sitting pillion rider and decided to do

something about it. It started as a

quest for an affordable transportation

solution”…….. Ratan Tata

ID EA

1059 days

ACTIVITY TASK

Different A lternatives Available

Several states that offered to help include

H aryana,M aharashtra,Orissa,Andhra Pradesh

Even Sri Lanka had m ade up suitable plans for

TATA's relocation

Finally Gujrat is basking in the glory of rescuing

the plant& is at present provid ing shelter to the

car which had been every com m on m an's dream

From Singur to Sanand

Why Sanand?????

Cond itions d id not im prove at Singur

Land available in plenty

The strategic location of Sanand,

--Som e 30km from Ahm edabad

-- Proxim ity to Ahm edabaad-rajkot

highway

Contd...

Advantageous for TATA because nearly 50%

of the car parts was produced in Rajkot,and

extensive coastline of the state could be

beneficial for im ports and exports

U ltra m ega power project that the TATA is

setting up at M undra port.

M undra Port would also allow them to im port

raw m aterial at very low cost

What happened next….

Tata m otors Ratan Tata chose Sanand, 30

km s away from Ahm adabad, for the Tata

Nano project.

The new Nano plant has a capacity of

5,00,000 units com pared to 3,00,000

units for singur.

Gujarat agreed to m atch agreed to m atch

all incentives offered by WB govt.

Singur wants Tata Nano plant back.

THANKSTHANKS