Definition: Plant layout refers to the arrangement of physical facilities such as machines, equipment, tools, furniture etc.

in such a manner so as to have quickest flow of material at the lowest cost and with the least amount of handling in processing the product from the receipt of raw material to the delivery of the final product. Objectives of good Plant Layout: A well designed plant layout is one that can be beneficial in achieving the following objectives: Proper and efficient utilization of available floor space Transportation of work from one point to another point without any delay Proper utilization of production capacity. Reduce material handling costs Utilize labour efficiently Reduce accidents Provide for volume and product flexibility Provide ease of supervision and control Provide for employee safety and health Allow easy maintenance of machines and plant. Improve productivity TYPES OF LAYOUT: There are mainly four types of plant layout: (a) Product or line layout (b) Process or functional layout (c) Fixed position or location layout (d) Combined or group layout PRODUCT OR LINE LAYOUT: In this type of layout the machines and equipments are arranged in one line depending upon the sequence of operations required for the product. It is also called as line layout. The material moves to another machine sequentially without any backtracking or deviation i.e the output of one machine becomes input of the next machine. It requires a very little material handling. It is used for mass production of standardized products.

Workstation-1

Workstation-2

Workstation-3

Workstation-4

Advantages of Product layout: Low cost of material handling, due to straight and short route and absence of backtracking Smooth and continuous operations Continuous flow of work Lesser inventory and work in progress Optimum use of floor space Simple and effective inspection of work and simplified production control Lower manufacturing cost per unit Disadvantages of Product layout: Higher initial capital investment in special purpose machine (SPM) High overhead charges Breakdown of one machine will disturb the production process. Lesser flexibility of physical resources. PROCESS LAYOUT: In this type of layout the machines of a similar type are arranged together at one place. This type of layout is used for batch production. It is preferred when the product is not standardized and the quantity produced is very small.

Advantages of Process layout: Lower initial capital investment is required. There is high degree of machine utilization, as a machine is not blocked for a single product The overhead costs are relatively low

 Breakdown of one machine does not disturb the production process. Supervision can be more effective and specialized. Greater flexibility of resources. Disadvantages of Process layout: Material handling costs are high due to backtracking More skilled labour is required resulting in higher cost. Work in progress inventory is high needing greater storage space More frequent inspection is needed which results in costly supervision COMBINED LAYOUT: A combination of process & product layout is known as combined layout. Manufacturing concerns where several products are produced in repeated numbers with no likelihood of continuous production, combined layout is followed FIXED POSITION OR LOCATION LAYOUT: Fixed position layout involves the movement of manpower and machines to the product which remains stationary. The movement of men and machines is advisable as the cost of moving them would be lesser. This type of layout is preferred where the size of the job is bulky and heavy. Example of such type of layout is locomotives, ships, boilers, generators, wagon building, aircraft manufacturing, etc.

Raw material Machines & Equipments Labour Finished Product (Aircraft)

AIR CRAFT ASSEMBLY

Advantages of Fixed position layout: The investment on layout is very small. The layout is flexible as change in job design and operation sequence can be easily incorporated. Adjustments can be made to meet shortage of materials or absence of workers by changing the sequence of operations. Disadvantages of Fixed position layout:

 As the production period being very long so the capital investment is very high. Very large space is required for storage of material and equipment near the product. As several operations are often carried out simultaneously so there is possibility of confusion and conflicts among different workgroups.

INVENTORY CLASSIFICATION ABC Analysis One of the widely used techniques for control of inventories is the ABC (always better control) analysis. The objective of ABC control is to vary the expenses associated with maintaining appropriate control according to the potential savings associated with a proper level of such control. For example, an item having an inventory cost of Rs. 100,000/- such as sheet steel, has a much greater potential for saving expenses related to maintaining inventories than an item with a cost of Rs. 100/-. The ABC approach is a means of categorizing inventory items into three classes A , B and C, according to the potential amount to be controlled. The following procedure is suggested for developing an ABC analysis: 1. List each item carried in inventory by number or some other designation. 2. Determine the annual volume of usage and rupee value of each item. 3. Multiply each items annual volume of usage by its rupee value. 4. Compute each items percentage of the total inventory in terms of annual usage in rupees. 5. Select the top 10% of all items which have the highest rupee percentages and classify them as A items. 6. Select the next 20% of all items with the next highest rupee percentages and designate them as B items. 7. The next 70% of all items with the lowest rupee percentages are C items. HML Classifications The High, medium and Low (HML) classification follows the same procedure as is adopted in ABC classification. Only difference is that in HML, the classification unit value is the criterion and not the annual consumption value. The items of inventory should be listed in the descending order of unit value and it is up to the management to fix limits for three categories. For examples, the management may decide that all units with unit value of Rs. 2000 and above will be H items, Rs. 1000 to 2000 M items and less than Rs. 1000 L items.

The HML analysis is useful for keeping control over consumption at departmental levels, for deciding the frequency of physical verification, and for controlling purchases. VED Classification While in ABC, classification inventories are classified on the basis of their consumption value and in HML analysis the unit value is the basis, criticality of inventories is the basis for vital, essential and desirable categorization. The VED analysis is done to determine the criticality of an item and its effect on production and other services. It is specially used for classification of spare parts. If a part is vital it is given V classification, if it is essential, then it is given E classification and if it is not so essential, the part is given D classification. For V items, a large stock of inventory is generally maintained, while for D items, minimum stock is enough. SDE Classification The SDE analysis is based upon the availability of items and is very useful in the context of scarcity of supply. In this analysis, S refers to scarce items, generally imported, and those which are in short supply. D refers to difficult items which are available indigenously but are difficult items to procure. Items which have to come from distant places or for which reliable suppliers are difficult to come by fall into D category. E refers to items which are easy to acquire and which are available in the local markets. The SDE classification, based on problems faced in procurement, is vital to the lead time analysis and in deciding on purchasing strategies. FSN Analysis FSN stands for fast moving slow moving and non-moving. Here, classification is based on the pattern of issues from stores and is useful in controlling obsolescence. To carry out an FSN analysis, the date of receipt or the last date of issue, whichever is later, is taken to determine the number of months, which have lapsed since the last transaction. The items are usually grouped in periods of 12 months. FSN analysis is helpful in identifying active items which need to be reviewed regularly and surplus items which have to be examined further. Non-moving items may be examined further and their disposal can be considered.

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