Factor influence the selection of plant location in pharma company

1. FACTORS INFLUENCE THE
SELECTION OF PLANT
LOCATION
PRESENTED BY : SHIKHA SINGH
ROLL NO :160617009
UNDER THE GUIDANCE OF :
DR MAHALAKSHMI RATHNANAND
DEPARTMENT OF PHARMACEUTICS
MCOPS MANIPAL UNIVERSITY

2. CONTENTS
• Definition
• Introduction
• Factor affecting plant location
• Conclusion
• References
1

3. DEFINITION
• A plant is a place where men, materials,
money, equipment, machinery, etc are
brought together for manufacturing
products.
• Plant location refers to the establishment
of an industry at a particular place.
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4. INTRODUCTION
 Plant location refers to the choice of region and the selection of a particular
site for setting up a business or factory
 An ideal location is one where
 Cost of the product is kept to minimum
 With a large market share
 Least risk & maximum social gain
 It is the place of maximum net advantage or which gives lowest unit cost of
production and distribution.
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5. FACTORS AFFECTING THE PLANT
LOCATION
 Nearness to raw materials.
 Transport facilities
 Nearness to market
 Availability of labour
 Availability of fuel & power
 Availability of water
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6.  Climatic condition
 Financial & other aids
 Land
 Community attitude
 Presence of related industries
 Existence of hospital, marketing centres, schools,
banks post offices, etc
 Local bye-laws, taxes, building ordinance, etc
 Housing facilities
 Facilities for expansion
 Security
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7. NEARNESS TO RAW MATERIALS
 It will reduce the cost of transportation of
raw materials from the vendors end to the
plant
 When the supplier of raw material is near
the facility, then the immediate supply of
the raw materials will be available
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8. TRANSPORT FACILITIES
 Money is spent in transporting raw material as well as
finished goods
 Depending on the size of a raw materials and finished
goods
 A suitable method of transportation such a road, rail,
water or air is selected & accordingly plant location is
decided
 The cost of transportation must be fairly small
compared to the total cost 7

9. NEARNESS TO MARKET
 It reduces the cost of transportation as well
as the chances the finished products
getting damage to the goods while
transport
 Moreover a plant being near to the market
can catch a big share of the market & can
render quick service to the customers
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10. AVAILABILITY OF LABOUR
 The labour should be stable, with proper
attitude towards work and available at
reasonable rates.
 Should be managed in such a way that the
chances of boycotts, strikes or lockouts are
less and the facility is able to achieve low
labour cost per unit production.
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11. AVAILABILITY OF FUEL & POWER
• Because of the wide spread use of electric
power, in most cases fuel has not remained
a leading factor for plant location
• Electric power should be available
continuously, in proper quantity and at
reasonable rates.
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12. AVAILABILITY OF WATER
 Water is used for processing, drinking, and
sanitary purposes
 For a pharmaceutical industry, water should
be available in adequate quantity and should
be of proper quality
 Pharmaceutical industry should not be
located in an area known for its water
shortage
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13. CLIMATIC CONDITION
 Due to development of HVAC (heating,
ventilation & air conditioning), climate of a
region doesn’t present much of a problem.
However, usage of HVAC needs capital
 Facilities located in humid areas should
consider the relative humidity of the place &
its effects on the product. Thus regulating the
relative humidity is also important.
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14. FINANCIAL & OTHER AIDS
 Some states gives aids in the form of loans, feed
money, subsides, machinery, etc to attract industrialists
 Special economic zone has economic law which is
different from typical country’s economic laws
 SEZ offer tax breaks to foreign investors
 SEZs are located within country’s national borders aims
to increase trade, increase investments, job creation &
effective administration
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15. LAND
 Topography, area, shape of the site, cost,
drainage and other facilities as well as the
probability of floods and earthquake
influence the selection of site.
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16. PRESENCE OF RELATED INDUSTRIES
 Like packaging industry or a firm which
produces raw materials could be helpful to
the new industry which could get the raw
materials from the nearby firm.
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17. EXISTENCE OF HOSPITALS, MARKETING
CENTERS, SCHOOLS , BANKS ETC
 For the future benefits of the staffs and
their family.
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18. HOUSING FACILITIES
 Accommodations are given to the
employees of higher rank, thus there
should be housing facilities in the selected
site.
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19. FACILITIES FOR EXPANSION
 While selecting the land for a plant site, it
should be seen that there’s plenty of land
for future expansion of the industry
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20. LOCATION OF A FACTORY IN A BIG
CITY
 Generally factories are located in big cities for obvious
reasons of skilled labour, market for both raw material
and end products
 ADVANTAGES:
 All types of skilled man power is available
 Repair, maintenance and service facilities for various
utilities are available in abundance
 Big markets for sale of products available 19

21. CONTI…
 Many similar industries /plants exist in nearby areas.
 Housing facilities for workers and employees .
 Police and fire protection facilities available in near by areas.
 DISADVANTAGES:
 Insurance and taxation rates are high
 Due to higher living standards, cost of consumer goods and wages
rates are high
 Cost of land is more if needed for expansion of the plant etc
 Possibilities of expansion are minimum due to scarcity of land 20

22. LOCATION OF AN INDUSTRY IN
SMALL TOWN
 ADVANTAGES:
 Less labour trouble
 Lower rents in comparison
to big cities and urban areas
 Noise not much problems
 DISADVANTAGES:
 Lack of skilled labour
 Lack of facilities for staffs
 Police and fire protection less
satisfactory
 Transportation & marketing
facilities not satisfactory as
required 21

23. REFFERENCES
 O.P. Khanna’s, Industrial Engineering and Management
17th Edition Dhanpat Rai Publications, Edition: 2010
ISBN: 9788189928353, page no.
 Cvs Subrahmanyam Pharmaceutical Production &
Management, Vallabh Publications / Prakashan, 1st
edition, ISBN: 8185731403, page no.
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