INTRODUCTION

1. INTRODUCTION • Industrial growth in India is very fast. • Factories Act was passed in1948 then amended in1950, 1951, 1954 and1976. • Various crucial decisions of business, namely • Location , • Layout (the arrangement of physical facilities), • Designing the product, • Production planning and control and maintaining good quality • of product.

2. In this lesson study of plant location ,layout and planning. • Industry are two type depends on its size and nature. • Small scale industry • The local market for the product is available. It can easily be shifted to other place, when there is any change in the market. • Large scale industry • Huge amount of investment has already been done the selection of proper site is very important.

3. OBJECTIVES • Describe the concepts of plant location and plant layout • Identify the various factors to be considered for selection of plant location • Distinguish among the alternative patterns of plant layout • Discuss the various factors influencing the choice of an initial layout and its subsequent modification

4. PHARAMACEUTICAL FACTORY LOCATION

5. LOCATION Ideal location Plant location • Selection of a particular site for setting up a business or factory • Cost of the product is kept to minimum. • It is the place of maximum net advantage or which gives lowest unit cost of production and distribution

6. LOCATION ANALYSIS Demographic Analysis Trade Area Analysis Competitive Analysis Site economics Traffic analysis • Demographic Analysis: It involves study of population in the area .like • Total population (in no.), • Age composition, • Per capita income, • Educational level.

7. Trade Area Analysis: Geographic area analysis. • To provides • Continued clientele to the firm. • Feasibility of accessing the trade area from alternative sites. • 3. Competitive Analysis: It help quality of competition in a given trade area. • 4. Traffic analysis: To have a rough idea about the number of potential customers passing by the proposed site during the working hours of the shop. • 5.Site economics: Alternative sites are evaluated in terms of establishment costs and operational costs under this. • Establishment Cost: is basically cost incurred for permanent physical facilities , • Operational costs are incurred for running business on day to day basis, they are also called as running costs.

8. IMPORTANCE OF SELECTION PLANT LOCATION Investment costs • Heating • Ventilation requirements • Storage capacity of raw material • Power needs , • Cost of labours, • Taxes, • Land construction, fuel, etc. 1.Cost Operating Partially determines costs. 2.Physical factor 3.Gove. rule Choice of location keeping national benefits.

9. FACTORS RESPONSIBLE FOR THE PLANT LOCATION CHOICES: • Availability of Raw material: • Nearness to the potential market: • Location should be near to source of operating power: • Supply of labour: labour is one of the most important inputs in any industrial enterprise. • Transport and communication facilities: connected with rail way, airport, road, water and air transport system is considered • Suitability of climate: climatic conditions such as humidity, temperature and other atmospheric conditions should be favourable for the plant. For the example, humid atmosphere is not suitable for the formation of pharmaceutical

10. Availability of housing and services: good housing facility, adequate shopping centre, cinema halls, local transport facilities, rail services and sufficient availability of gas, water supply, disposal of waste, can easily attract good staff.   • Safety requirements: cause pollution or processes explosives in nature should be located in remote areas. • Miscellaneous considerations: The consideration like low interest on loans, special grants, attitude of residents, towards the industry, living standards etc. helps in locating in the site of plants.

11. SELECTION OF SITE: • It should be Connected with rail, road and river transports. Efficient sewage system for the disposal of water and waste materials Surroundings good and peaceful capable of bearing the load of the building plant and equipment. Sub-soil Sufficient land space requirements for the parking of transport and sufficient space for residential accommodation for staff and labour

12. SELECTION OF SITE: urban areas It near to city. therefore Provide better transport and communication system with sufficient labour supply & also social services like medical, entertainment, restaurants, educational etc. But in urban area, cost of land and labour wages are likely to be on higher side. Rural areas It near to village. therefore provide cheaper land and labour with scope for further expansion, good shopping complexes, entertainment facilities, school and colleges and In general, rural location is good for large plants.

13. SPECIAL ECONOMIC ZONE(SEZ) • Special Economic Zone (SEZ) is a geographical region that has economic and other laws that are more free-market-oriented than a country's typical or national laws. • The category 'SEZ' covers a broad range of more specific zone types, including • Free Trade Zones (FTZ), • Export Processing Zones (EPZ), • Free Zones (FZ), • Industrial parks or Industrial Estates (IE), • Free Ports, Urban Enterprise Zones and others.

14. Objectives of the SEZs are: (a) Generation of additional economic activity; (b) Promotion of exports of goods and services; (c) Promotion of investment from domestic and foreign sources; (e) Development of infrastructure facilities.

15. Minimum Investment Requirements • Sector Specific SEZ’s – Investment should be more than Rs. 250 crores or – Net worth* of Rs. 50 crores • Multi product SEZ’s – Investment should be more than Rs. 1000 crores or – Net worth* of Rs. 250 crores • BoA may however consider proposals not meeting minimum investment/net worth criteria on merits if required • * Net worth of promoter company along with group companies and the flagship companies to be considered for the purpose of calculation of net worth

16. ADVANTAGES • 15 year corporate tax holiday on export profit – 100% for initial 5 years, 50% for the next 5 years and up to 50% for the balance 5 years equivalent to profits ploughed back for investment. • Allowed to carry forward losses. • No licence required for import. • Duty free import/domestic procurement of goods for setting up of the SEZ units. • Goods imported/procured locally are duty free and could be utilized over the approval period of 5 years. • Exemption from customs duty on import of capital goods, raw materials, consumables, spares, etc. • Exemption from Central Excise duty on the procurement of capital goods, raw materials, and consumable spares, etc. from the domestic market. • Exemption from payment of Central Sales Tax on the sale or purchase of goods, provided that, the goods are meant for undertaking authorized operations. • Exemption from payment of Service Tax.

17. Exemption from payment of Service Tax. • The sale of goods or merchandise that is manufactured outside the SEZ (i.e, in DTA) and which is purchased by the Unit (situated in the SEZ) is eligible for deduction and such sale would be deemed to be exports. • The SEZ unit is permitted to realise and repatriate to India the full export value of goods or software within a period of twelve months from the date of export. • “Write-off” of unrealized export bills is permitted up to an annual limit of 5% of their average annual realization. • No routine examination by Customs officials of export and import cargo. • Setting up Off-shore Banking Units (OBU) allowed in SEZs.

18. OBU's allowed 100% income tax exemption on profit earned for three years and • 50 % for next two years. • Exemption from requirement of domicile in India for 12 months prior to appointment as Director. • Since SEZ units are considered as ‘public utility services’, no strikes would be allowed in such companies without giving the employer 6 weeks prior notice in addition to the other conditions mentioned in the Industrial Disputes Act, 1947. • The Government has exempted SEZ Units from the payment of stamp duty and registration fees on the lease/license of plots. • External Commercial Borrowings up to $ 500 million a year allowed without any maturity restrictions. • Enhanced limit of Rs. 2.40 crores per annum allowed for managerial remuneration.

19. DISADVANTAGES • Revenue losses because of the various tax exemptions. • Most players are interested in setting up SEZ’s with an eye on the real estate bounty so that they can acquire at cheap rates and create a land bank for themselves. • The number of units applying for setting up EOU’s is not commensurate to the number of applications for setting up SEZ’s leading to a belief that this project may not match up to expectations.

20. Introduction toOperations Management is the management of the direct resources required to produce the goods and services provided by an organization. Management activities performed include selecting, designing, operating, controlling and updating productive systems

21. Types of Decisions • Strategic or long-range decisions • Tactical or medium- range decisions • Operational planning and control or short-range decisions

22. Questions Raised At Strategic Level: 1. How well we make the product? 2. Where do we locate facilities? 3. How much capacity is needed? and 4. When should capacity be added? At Tactical Level: 1. How many workers do we need? 2. When do we need them? 3. Is overtime needed or perhaps an additional shift? 4. When to deliver material? and 5. Is a finished goods inventory needed? At Operational Level: 1. Jobs to be done today or this week? 2. To whom tasks are assigned? and 3. Which jobs have priority?

23. Role of OM Within an Organization

24. OM Contributions to Society • Higher Standard of Living • Better Quality Goods & Services • Concern for the Environment • Improved working conditions

25. New Product and Service Development, andProcess Selection • Categories of new products: • Incremental or Derivative Products: products with least amount of innovation. These products are often cost-reduced versions of existing products or with some added minor features, e.g. waterproof Walkman CD player. • Next Generation or Platform Products: these products provide a broad base for a product family that can be leveraged over several years requiring more resource than incremental products, e.g. major model changeovers in the auto industry. • 3. Breakthrough or Radical Products: these products require substantial product design and process change, e.g. first TV, cellular phone, etc.

26. The New Product Development Process • Idea generation • Concept Development or initial design & analysis of customer requirements and market demand. • Quality function Deployment (QFD) translating customer requirements into engineering specifications. E.g. House of Quality on page 60. • Design for Manufacturability: material choices, process selection, efficiency, quality and safety consideration all needed to mass produce the product.

27. Project Management • A project is a statement or proposal of something to be done. Projects have a series of related jobs directed towards the achievement of a goal and requiring a significant amount of time to perform. • Project management involves planning, directing and controlling resources: people, capital, equipment, and material to meet the technical, cost, and time constraints of the project.

30. ACTIVITIESOF OM • The overall manufacturing system. • Production engineering. • Computerized design, process planning, production planning and control and prove the efficiency and effectiveness of production engineering and manufacturing methods which in many high-technology and large-scale mass-production or processing plants have largely replaced traditional and mainly manual techniques. • Manufacturing. • Quality management. • Planned maintenance. • Inventory control. • Distribution.

31. An itegrated operations system

32. Process planning Process planning determines how the product or part should be manufactured by referring to component and assembly drawings and manufacturing reference data, and specifications produced at the design stage.

33. Production planning. Production planning analyses sales forecasts and orders and decides on the manufacturing resources (capacity, materials and labor) required to meet the current and anticipated demand. Production planning involves capacity and aggregate planning, which aim to match the level of production to the level of demand.

34. Aggregate planning Aggregate planning aims to ensure that capacity is available to meet demand at minimum cost.

35. Production control Production control schedules production, loads the shops and monitors progress to ensure that production programs are achieved.

36. Scheduling Scheduling involves: • Sequencing – determining the order in which jobs will be completed at each stage in the program; • Allocating the start and finishing time for each order; • Resource allocation – assessing labour and material requirements and their availability.

37. Scheduling The approach adopted will be influences by the extend to which the company is making to order (responding to customer orders) or making to stock (anticipating future orders).

38. Scheduling techniques • Material requirements planning, in which the known customer requirement for the final product is exploded to produce lists of parts and components required to make it. These known requirements are compared with available inventories to determine net requirements, which are then scheduled within available capacity. • Forward scheduling, which involves setting out activity timings from a given start date to achieve a defined completion date. This is usually computerized, although bar are still maintained manually in some organizations.

39. Scheduling techniques • Reverse scheduling, as used in make-to-order situations, involves subtracting activity timings from the due date for delivery and representing them on computerized schedules • Network analysis, which is used in complex projects to schedule various interrelated and interdependent activities • Line of balance, a technique used in batch production to calculate the quantities of the parts or components of the final product which must be completed by an intermediate date to ensure the final delivery schedule is met.

40. Scheduling The output of the scheduling process is a master production schedule which sets out when the major operations required for each expected item of demand are to be undertaken. Master production scheduling aims to balance production possibilities with sales requirements.

41. Progress control. Progress control monitors the progress of orders through the shops against the master production schedule and delivery requirements so that corrective action can be taken to overcome delays, shortages and bottlenecks.

42. Material control. Material control works from the master production schedule and, using materials requirements (MRP) and inventory control techniques, it: • Verifies material requirements • Requisition materials from buying and stores; • Receives and stores materials and bought in parts; • Identifies surplus stock and takes action to reduce it.

43. The Role of Technology in Operations Technology impacts operational performance. It makes possible for the company to compete and excel on several dimensions simultaneously. Technology in Manufacturing includes the following: 1. Automation, 2. Machining Centers, 3. Numerically Controlled Machines(NC), 4. Industrial Robots, 5. CAD/CAM, 6. FMS, 7. CIM, 8. Islands of automation, 9. Information Technology, 10. ERP, 11. SCM, 12. NPD, 13. CRM

44. MANUFACTURING SYSTEMS. • job, batch and flow production systems • the use of computer numerically controlled machine tools • flexible manufacturing systems(FMS) • the use of group technology • cellular manufacturing • the use of robots • computer-integrated manufacturing

45. QUALITY MANAGEMENT Quality management activities aim to ensure that the high standards of product quality and service expected by customers are created and maintained. Quality management activities comprise: • quality control, quality assurance and total quality control systems • total quality management (TQM) systems

46. INVENTORY CONTROL ACTIVITIES Inventory control activities aim to ensure that the optimum amount of inventory or stock is held by a company so that its internal and external demand requirements are met economically. Included are: • overall approaches to inventory control • the use of materials requirement planning (MRPI) and manufacturing resource planning (MRPII) systems • make or buy decisions.

47. PLANNED MAINTENANCE ACTIVITIES • Planned maintenance draws up in advance and implement plant, equipment and building maintenance programs to ensure that they operate or remain trouble free for a predetermined period.

48. DISTRIBUTION ACTIVITIES Distribution activities are concerned with storing completed products in warehouses, depots and stores and the dispatching and delivery of products to customers. Those concerned with physical distribution management and distribution planning.

49. PROJECT MANAGEMENT ACTIVITIES. Project management activities are concerned with the planning, supervision and control of large-scale engineering or construction projects.

50. Manufacturing Systems Manufacturingis the process of transforming materials and information into goods for the satisfaction of human needs.