Introduction to Plant location
Plant location refers to the choice of region and the selection of a particular site for setting up a business or factory. But the choice is made only after considering cost and benefits of different alternative sites. It is a strategic decision that cannot be changed once taken. The place of the plant should offer the lowest cost when the cost of production and delivering the goods to consumers has been calculated.
Factors influencing the Plant Location
Facility location is the process of determining a geographic site for a firm’s operations. Managers of both service and manufacturing organizations must weigh many factors when assessing the desirability of a particular site, including proximity to customers and suppliers, labour costs, and transportation costs.
Factors deciding the Plant Location are General Location factors and Specific Location Factors.
General Factors influencing the Plant Location
General factors influencing the plan location can b divided into controllable factors and uncontrollable factors.
Controllable factors are Proximity to market, Supply of materials, Transportation facilities, Infrastructure availability, Labour and wages, Capital.
Uncontrollable factors are Govt. policy, Climatic Conditions, Supporting Industries & Services, Community and Labour Attitude and Community Infrastructure.
Specific Factors influencing the Plant Location
Specific factors influencing the plant location can be divided into dominant factors and secondary factors.
Dominant factors influencing the plant location are Favourable labour climate, Proximity to markets, Quality of life, Proximity to suppliers and resources, Utilities, taxes, and real estate costs.
Secondary factors are Expansion Opportunities, Construction Cost, Accessibility to transportation, Shuffling cost to material and plants, Competition, factors, Community Attitudes.