Plant location manas & group
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PRESENTATION ON
PROJECT M ANAGEM ENT
SELECTION OF SITE &
LOCATION OF TH E PROJECT
Guided by: Prof. Subhash Dixit
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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
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Plant Location
Plant location decisions are
strategic
long term and
non repetitive.
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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.
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Location Analysis
D em ographic Analysis
Trade Area Analysis
Com petitive Analysis
Traffic analysis
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Plant Location
Poor location leads to :-
H igher Cost
D ifficult m arketing
D ifficult Transportation
Substandard Q uality.
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REGIONAL FACTORS
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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.
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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 .
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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.
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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.
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K inds of Raw M aterials
Gross Materials :-
They loose weight during the process of
transform ation.
E.g. iron ore,coal,sugarcane etc.
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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.
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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.
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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.
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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.
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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.
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Attitude to labor problem s.
Com m unity attitude towards industries.
Political clim ate.
Attitude of Governm ent towards labor
unions..
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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.
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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.
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SITE FACTOR
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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.
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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.
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Site Factors
Supporting services like
Crane
Forklifts
Third part contractors etc.
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COMMUNITY FACTOR
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It im plies :-
Accom m odation
Education
Entertainm ent
Transport facilities.
Com m unity Factor
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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… …
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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… …
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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.
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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.
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L egal Issues of Project Management
Project Terms
Outsourcing
Communication
Risk Insurance
Arbitration or Mediation C lause
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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
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“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
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1059 days
ACTIVITY TASK
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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
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From Singur to Sanand
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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
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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
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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.
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THANKSTHANKS