The Location Selection Factors

Facility Location is the right location for the manufacturing unit, it has sufficient access to the customers, staff, travelling, etc. For commercial success, and competitive benefit following are the critical factors

Overall objective of an organization is to fulfill and joy customers using its product and services. Therefore, for a business it becomes important to possess strategy developed around its manufacturing facility. A manufacturing unit is the place where all inputs such as uncooked material, equipment, skilled labors, etc. get together and make products for customers. Probably one of the most critical factors determining the success of the manufacturing facility is the positioning.

Facility location is truly a term found in operation management, facility location or location research is done so the better uses of the location can be realized. The company by understanding the materials and creation process done near by the positioning can save ample time in creation process and also save a great deal in terms of transport cost. As well as the company can find out ideal position for the location of the company so that all the factors that are needed will be not really a long distance from the business.

Facility location perseverance is a company critical strategic decision. There are many factors, which determine the positioning of facility included in this competition, cost and corresponding associated effects. Facility location is a clinical process utilizing various techniques.

Location Selection Factors

For an organization which operates in a global environment; cost, available infrastructure, labor skill, government plans and environment are extremely important factors. A right location provides sufficient usage of customers, skilled labors, vehicles, etc. A right location ensures success of the business in current global competitive environment.


A geographic area becomes a center point for various service locations predicated on many factors, guidelines and issues. These factors are can be split into most important factors and secondary factors. A primary factor which brings about industrialization of a specific area for particular processing of products is material, labor and occurrence of similar developing facilities. Supplementary factors are available of credit funding, communication infrastructure and insurance.

Errors in Location Selection

Facility location is critical for business continuity and success of the organization. So that it is important to avoid problems while making selection for a location. Problems in selection can be divided into two wide-ranging categories behavioral and non-behavioral. Behavioral errors are decision made by executives of the business where personal factors are believed before success of location, for example, movement of personal establishment from hometown to new location service. Non-behavioral errors include lack of proper investigative practice and evaluation, overlooking critical factors and characteristics of the industry.

Location Strategy

The goal of an organization is customer joy for that it needs access to the customers at lowest possible cost. That is achieved by growing location strategy. Location strategy helps the business in determining product offering, market, demand forecast in various marketplaces, best location to access customers and best manufacturing and service location.

Factors Affecting Facility Location

If the business can configure the right location for the manufacturing facility, it will have sufficient access to the customers, staff, transport, etc. For commercial success, and competitive advantages following are the critical factors

Customer Closeness: Center locations are decided on closer to the client concerning reduce transportation cost and reduce time in reaching the customer.

Business Area: Existence of other similar production systems around makes business area conducive for facility establishment.

Availability of Skill Labor: Education, experience and skill of available labor are another important, which can determine service location.

Free Trade Area/Agreement: Free-trade areas promote the establishment of manufacturing facility by providing bonuses in custom duties and levies. On another palm free trade agreement is among countries providing a motivation to determine business, in particular, country.

Suppliers: Continuous and quality supply of the raw materials is another critical element in determining the location of manufacturing unit.

Environmental Insurance policy: In current globalized world air pollution, control is very important, therefore knowledge of environmental plan for the service location is another critical factor.

Some of the benefits in location evaluation include:

You get a thorough understanding of all the factors involved in the production, and ways by which the materials that are needed in the development can simply be seen.

When you execute a proper location analysis for your service you will also come across alternative replacement materials that are readily available and will cost a lower amount.

You can save a great deal on transport cost for materials, labour, import and export.

The materials will be accessible at a relatively low priced.

The best way to get a job done is by learning ways by which the task can be done. Location analysis helps you in those aspects.

Allows to you differentiate between useful positions to place your facility. Like for example, you cannot build a hazardous center in a domestic area.

Gives you access to cheap labour, and needed raw materials like normal water electricity and many more.

Helps in a even running of a business, by seeing compared to that everything that is possibly needed is commonly and common.

Also has very easy access to development, distribution and sales of the merchandise.

Allows you to definitely outperform your competitors facilities

Once you have found the optimal location then you will very easily overcome all the issues that you are likely to face and have a smooth jogging of an organization. When you plan accordingly, you'll also anticipate to face some minor hindrances.


For a business to have an effective and efficient manufacturing facility, it's important that special attention is given to facility layout. Service layout can be an arrangement of different aspects of manufacturing within an appropriate manner as to achieve desired creation results. Facility design considers available space, last product, safe practices of users and facility and capability of operations.

An effective facility layout ensures that there's a smooth and regular flow of creation material, equipment and manpower at least cost. Facility design talks about physical allocation of space for monetary activity in the place. Therefore, main aim of the center design planning is to design effective workflow concerning make equipment and workers more productive.

Facility Layout Objective

A model service layout can provide a great relationship between raw material, equipment, manpower and final product at minimal cost under safe and comfortable environment. An efficient and effective center structure can cover following objectives

To provide perfect space to organize equipment and help in activity of goods and create safe and comfortable work place.

To promote order in creation towards an individual objective

To reduce activity of workers, uncooked material and equipment

To promote security of plant as well as its workers

To facilitate expansion or change in the design to accommodate new product line or technology upgradation

To increase production capacity of the organization

An organization can achieve the above-mentioned purpose by ensuring the next:

Better training of the staff and supervisors.

Creating understanding about of health risk and safety standards

Optimum usage of labor force and equipment

Encouraging empowerment and lowering administrative and other indirect work

Factors affecting Center Layout

Facility layout designing and execution is affected by various factors. These factors change from industry to industry but influence facility structure. These factors are as follows

The design of the facility layout should consider overall objectives establish by the business.

Optimum space needs to be allocated for process and technology.

A proper safety measure as to avoid mishaps.

Overall management guidelines and future way of the organization

Factors Influencing Location of Industries

There are different kinds of establishments and each one required different types of inputs.

Further importance of different inputs varies due to their varying cost or they require in a variety of proportions or alleviate/difficulty in availability of different inputs or various range of industrial operation or any such reason.

These factors cannot be distributed ubiquitously round the world.

The value, volume, life and care and attention required for different kinds of produce vary substantially across different kind of industries.

Similarly different inputs required vary in expense as well as compared.

Also with changing technology and peoples aspirations the comparative importance of these location regulating factors changes over time

Thus they have got different capacity to exert different pull to locate a business in their favour.

Location of Indian Cement Industry

Decisions regarding professional location have a distinctive devote the areas of industrial management and local planning because such decisions have long-term implications for medical and well-being of your economy and because they are almost irreversible. Most industries involve huge ventures, which generate cash flows over the long period of time and the annals testifies that the success of an industry depends significantly upon the appropriateness of its location.

Factors Impacting on Location

Availability of Raw Material

The various determinants of the most effective location of a particular industry play varying role in the location of different market sectors. In the cement industry, availability of raw material and energy, and move cost are definitely more significant than the other factors because cement is a weight dropping and bulky product. Its weight sacrificing dynamics argues for location near recycleables while bulkiness favours location nearby the market. Since Weber's (1929) material index (proportion of localized materials to result) is more than 1. 5 for concrete, the net effect of both of these factors favours nearness of raw-materials. As a result concrete factories are, in fact, found in close closeness to the sources of recycleables. Most cement manufacturing units are founded within a radius of 15 to 20 kilometers of limestone deposits.

The recycleables required for cement are limestone, clay, and gypsum. Although limestone deposits and clay are available in fairly large volumes all over the country, proximity of railhead is essential for minimizing the transport cost. The option of gypsum might not exactly affect location because of its requirement is only about four per cent. Cement, in most crops in India, is manufactured through the wet process and thus large levels of water are needed. However, as normal water comes in good volumes throughout our country, this will not affect location. Really the only important consideration seems to be the option of coal since diesel, the choice source of gas, is somewhat more expensive. The availability of coal pulls the industry towards Bengal and Bihar and, to some extent, Orissa, Andhra Pradesh, Maharashtra, and Madhya Pradesh.

Regional Demand and Supply

The region-wise demand for, and capacity and development of concrete in India in 1971, the latest yr that data can be found, are shown in Desk 1. They signify that demand is more than resource in the Eastern and the Northern areas, while quite the reverse is true for the European and the Southern regions. An examination of days gone by data indicated that trend has been prevailing for long. Thus, the market criterion by themselves would argue for expansion of cement industry in the Eastern and the Northern regions and because of its contraction in Western and Southern areas.

Management's Interest

The selection of location of a fresh factory to a certain degree depends upon the management's interest in a particular region. In case the management has country-wide commercial interest, perhaps this factor wouldn't normally merit attention in location studies. However, if the management has regional or local professional interest this factor becomes a decisive one. Both these kinds of management's interest are located in the Indian cement industry. On the one hand, we have Associated Cement Companies Ltd. (ACC) and Dalmia Cement (India) Ltd. , whose intersts are country-wide. On the other hand, there are cement companies run by express government authorities, such as Andhra Cement, Madras Cement, and Orissa Concrete, whose passions are limited to its development within their own territories.

Since South India possesses more regional business owners ready to float cement factories at the moment, the Southern region is constantly on the have more cement factories than other regions.

Government Policy

For quarrying of limestone, the concrete industry has always to depend on the federal government for lease terms. Besides, encouragement and facilities or discouragement and hindrance from administration do exert their affect on location. In the first times, the then princely claims encouraged the growth of the concrete industry in their territories. Thus, out of eleven factories existing in 1936 at the time of formation of ACC, as much as five factories were in princely states and in case there is one, viz. , the Punjab, the Provincial Federal government was directly considering capital and management.

Recently, the governments have evinced keener interest in developing the concrete industry in industrially

Cotton Textile Industry

Cotton textile industry is one of the oldest industry on earth.

Since textile is one of the basic need of every person so that it always had sufficient demand for it.

Cotton textile industry requires uncooked organic cotton, cheap and large labour pool(automation has reduced its importance in a few areas), power, good travel, humid environment (large flower may maintains it artificially) capital, market, etc.

Cotton is regarded as nearly pure uncooked material since it looses hardly any weight in processing which is very easy to move raw cotton and natural cotton textile with practically similar cheap rates.

Thus the pressure of natural material as seen in the situation of flat iron and material industry is absent here.

Thus other locational factors especially transport, labour, electric power and market become important.

With good transfer facility it could be established anywhere but where power present.

Development of electricity has reduced its dependency on the foundation of power supply and automation has diluted the necessity of skilled large labour pool necessity.

Now the concerns of market to link the industry effectively with the buyer and employment producing capacity of this industry are becoming more significant in locating this industry.

Initially it was in the form of spread small and cottage industry but latter with the development of content spinning and weaving machinery in Britain it began getting importance as a huge regular industry.

Britain was first to had a quick enlargement in development pattern of organic cotton textile industry with home invented machinery.

Due to longevity, fineness, uniformity and above all cheapness of produce Britain received prominent position in organic cotton textile sector of the world by giving local small scale

Industries very tough competition.

Iron and Steel Industry

Iron and material is one of the most basic industry since it is a close input to numerous other styles of industries.

But the design of demand and technical changeshas brought some interesting locational move in this industry.

In start when the flat iron smelting technology started out getting professional importance in Europe the demand was low and usually of local mother nature.

At this juncture charcoal obtained from forest solid wood was used in combination with lime to make sponge flat iron.

Abundant forest was present almost everywhere therefore small vegetation were located locally close to the forest.

This resulted in dispersion of this industry up to midi eighteenth century.

During this time around the utilization of coal in iron smelting gradually started maturing.

Attraction to coalfield locations was also governed by then available technology and demand.

Forest area started out shrinking (about one acre of forest log necessary to smelt five tone iron) demand for flat iron increased considerably scheduled to starting of heavy anatomist works, required flat iron ore to coal percentage was 1/8, coal producing parts already experienced some iron work record and pool of labour required, at some places flat iron ore was found associated with coal and like factors, all resulted in to the establishment and move of iron industry in coalfield areas.

The development of the Appalachian region of North America, Liege in Belgium, the South Wales and the Sheffield region of England, etc. are cases of appeal of coalfield to flat iron and metallic industry.

Since overdue eighteenth to the finish of nineteenth century Coal field loved its position and witnessed heavy development of flat iron and metal and related commercial agglomeration.

During this period it has developed sufficient commercial inertia at many places and so survived effectively even in twentieth century.

But not absolutely all coalfields witnessed similar developments

Those found in remote areas, sparsely filled area and poorly developed area were continued to be employed in exporting coal at cheaper rates.

This helped in arranging of establishments also at seaside locations where flat iron made with imported raw materials are for sale to export.

Japanese plants and to some extent Vishakhapatnam vegetable of India belong to this category.

In last fifty to hundred years the role of market also become significant.

A big market helped in setting large integrated metallic seed and in providing scrap flat iron as raw materials to reduce travelling cost.

So they also attracted flat iron and steel place close to them.

Since iron and steel is regarded as one of the very most basic industry as an indication of industrial development of an area therefore many region hitherto undeveloped and have some capacity are aspiring for it.

Here government procedures play very deciding role as seen in the truth of the development of iron and steel companies in the Chotanagpur plateau of India which also has many other advantages.

Thus location of flat iron and steel industry on the globe has responded effectively to the changing character of different factors of industrial locations.

Also We Can Offer!

Other services that we offer

If you don’t see the necessary subject, paper type, or topic in our list of available services and examples, don’t worry! We have a number of other academic disciplines to suit the needs of anyone who visits this website looking for help.

How to ...

We made your life easier with putting together a big number of articles and guidelines on how to plan and write different types of assignments (Essay, Research Paper, Dissertation etc)