Selecting a Manufacturing Plant Site

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How is a Manufacturing Plant Site Selected?

a. Land availability in terms of future expansion of the plant and the ability of the soil to support a factory.

b. Labor and raw material availability and the transport of these resources to the plant at minimal cost.

c. Availability of the market and potential for future growth. The cost of transporting goods and services to people must be minimal.

d. Forecast of present and future demand and supply of the product being produced.

e. Competition analysis in the region using relevant market intelligence.

f. Availability of transportation and communication facilities like airports, railway, telephone, etc.

g. Availability of infrastructure: running water, electricity, schools, hospitals, libraries, etc.

h. Availability of waste disposal sites: the manufacturing plant must be as environmentally as possible.

i. Availability of governmental support, tax benefits, and other incentives.

j. Availability of qualified employees.

k. Stable climate.

l. Secure area due to good policing.

m. Manufacturing plant must be socially acceptable in the surrounding region.

Furthermore, political, technical and economic considerations must also be taken into account before setting up a new manufacturing plant.

Additional Readings:

1. Objectives and Elements of Production and Operations Management
2. Basic Stages and Objectives of Planning in Production and Operations Management
3. Relationship between Process of Planning and External Agencies
4. Selecting a Manufacturing Plant Site
5. Controlling, Total Quality Control, and Deming’s 14 Points
6. Quality and Cost Economics and ASQC Categories of Quality Cost
7. Example of Multiple Activity Chart and Work Measurement
8. Japanese vs American Production and Operations Management
9. Kaizen Framework and Kaizen vs McKinsey
10. Advantages of Automation
11. Concept of Appropriate Technology
12. ‘Just in Time’ Manufacturing
13. Preventive Maintenance
14. Total Quality Management and ISO-9000
15. Inventory Control

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