Republic of the Philippines

Jose Panganiban National High School

SENIOR HIGH SCHOOL
Jose Panganiban, Camarines Norte

In partial fulfillment of the strand requirement

ABM- II PRECISE
PRINCIPLES OF MARKETING

CHAPTER II CASE ANALYSIS

Customer Relationship:
Customer Service

Submitted by:
Students name
section

Submitted to:
MARY JANE R. DE LEON, LPT, MBA, CB

1ST Semester 2024-2025

 I- INTRODUCTION

Plant Location

Location of an industry is an important management decision. It is a two-step decision:

first, choice of general area or region and second, the choice of site within the area selected.
Location decision is based on the organizations long-term strategies such as technological,
marketing, resource availability and financial strategies.

Plant location is an important factor that determines the performance of an organization.

Planned industrialization offers smooth working of the industry. Also it maintains social and
economical structure of the country. In olden days, the location was selected randomly, with
convenience of manufacturer and by considering social factors, which caused in failure of an
organization.

Importance of Plant Location:

Plant location with thorough analysis leads the organization towards success. The basic
objective of organization is to maximize the profit level. Hence, it will be beneficial for both
i.e. newly established business & already established business. The profit maximization can
be done by increasing sales price, increasing sales with reduced production cost, by
analyzing market trend, nature & level of competition etc. Production cost can also be
reduced, if firm is located at a place where all the basic requirements (that fulfill input needs)
will be available easily.

II- DISCUSSION

Now let's discuss above factors affecting the location of a plant.

1. Law and order situation

2. Availability of infrastructure facilities

3. Good industrial relations

4. Availability of skilled workforce

5. Social infrastructure

There must be suitable social infrastructure facilities like;

 Education institutions,

 Hospitals and health centers,

 Community centers like worship place, garden, meditation center, etc.

 Recreation facilities like theaters, clubs, communication facilities, etc.

6. Investor friendly attitude

7. Nearness to market

8. Nearness to raw-materials' source

9. Nearness to supporting industries

10. Must meet safety requirements

10. Miscellaneous factors

III- APPLICATION

Need of Plant Layout:

Many situations give rise to the problem of plant layout. Two plants having similar
operations may not have identical layouts. This may be due to size of the plant, nature of the
process and management’s calibre.

The necessity of plant layout may be felt and the problem may arise when:

(i) There are design changes in the product.

ADVERTISEMENTS:

(ii) There is an expansion of the enterprise.

(iii) There is proposed variation in the size of the departments.

(iv) Some new product is to be added to the existing line.

(v) Some new department is to be added to the enterprise and there is reallocation of the
existing department.

ADVERTISEMENTS:

(vi) A new plant is to be set up.

Importance of Plant Layout:

The layout of a plant is quite important in view of the above definition but the importance of
a layout may greatly vary from industry to industry.
The possibility of attaining the best possible layout is directly proportional to following
factors:

(i) The Weight, Volume or Mobility of the Product:

If the final product is quite heavy or difficult to handle involving costly material handling
equipment or a large amount of labour, important consideration will be to move the product
minimum possible e.g. boiler, turbines, locomotive industries and ship building companies
etc.

(ii) Complexity of the Final Product:

(iii) The Length of the Process in Relation to Handling Time:

(iv) The Extent to which the Process Tends towards Mass Production:

Objectives of Good Plant Layout:

A good rather an optimum layout is one which provides maximum satisfaction to all
concerned i.e. shareholders, management employees and consumers.

The objectives of a good layout are as follows:

(i) Should provide overall satisfaction to all concerned.

(ii) Material handling and internal transportation from one operation to the next is minimized
and efficiently controlled.

(iii) The production bottle necks and points of congestions are to be eliminated so that input
raw materials and semi-finished parts move fast from one work station to another.

(iv) Should provide high work in process turnover.

(v) Should utilize the space most effectively; may be cubical utilization.

(vi) Should provide worker’s convenience, promote job satisfaction and safety for them.

(vii) Should avoid unnecessary investment of capital.

(viii) Should help in effective utilization of labour.

(ix) Should lead to increased productivity and better quality of the product with reduced
capital cost.

Keeping in view the type of industry and volume of production, the type of layout to be
selected is to be decided from the following:

1. Product or Line Layout.

2. Process or Functional Layout.

3. Fixed Position Layout.

4. Combination type of Layout.

Fig. 3.3 shows product layout for two types of products A and B.

Advantages offered by Product Layout:

(i) Lowers total material handling cost.

(ii) There is less work in process.

(iii) Better utilization of men and machines.

(iv) Less floor area is occupied by material in transit and for temporary storages.

(v) Greater simplicity of production control.

(v) Total production time is also minimized.

Limitations of Product Layout:

(i) No flexibility which is generally required is obtained in this layout.

(ii) The manufacturing cost increases with a fall in volume of production.

(iii) If one or two lines are running light, there is a considerable machine idleness.

(iv) A single machine breakdown may shut down the whole production line,

(v) Specialized and strict supervision is essential.

2. Process or Functional Layout:

The process layout is particularly useful where low volume of production is needed. If the
products are not standardized, the process layout is more desirable, because it has greater
process flexibility than other. In this type of layout the machines are not arranged according
to the sequence of operations but are arranged according to the nature or type of the
operations.
See Fig. 3.4 for process layout. Therefore, the process carried out in any area is according to
the machine available in that area.

Advantages of Process Layout:

(i) There will be less duplication of machines. Thus total investment in equipment purchase
will be reduced.

(ii) It offers better and more efficient supervision through specialization at various levels.

(iii) There is a greater flexibility in equipment and man power thus load distribution is easily
controlled.

(iv) Better utilization of equipment available is possible.

(v) Breakdown of equipment can be easily handled by transferring work to another machine/
work station.

(vi) There will be better control of complicated or precision processes, especially where
much inspection is required.

Limitations of Process Layout:

(i) There are long material flow lines and hence the expensive handling is required.

(ii) Total production cycle time is more owing to long distances and \waiting at various
points.

(iii) Since more work is in queue and waiting for further operation hence bottlenecks occur.

(iv) Generally more floor area is required.

(v) Since work does not flow through definite lines, counting and scheduling is more tedious.

(v)Specialization creates monotony and there will be difficulty for the laid workers to find
job in other industries.

3. Fixed Position Layout:

This type of layout is the least important for today’s manufacturing industries. In this type of
layout the major component remain in a fixed location, other materials, parts, tools,
machinery, manpower and other supporting equipment are brought to this location.

Advantages Offered by Fixed Position Layout:

(i) Material movement is reduced

(ii) Capital investment is minimized

(iii) The task is usually done by gang of operators, hence continuity of operations is ensured

(iv) Production centres are independent of each other. Hence effective planning and loading
can be made. Thus total production cost will be reduced and

(v) It offers greater flexibility and allows change in product design, product mix and
production volume.

Limitations of Fixed Position Layout:

(i) Highly skilled man power is required.

(ii) Movement of machines equipment’s to production centre may be time consuming.

(iii) Complicated fixtures may be required for positioning of jobs and tools. This may
increase the cost of production.

4. Combination Type of Layout:

Now days in pure state any one form of layouts discussed above is rarely found. Principles of
Plant Layout:

According to Muther there are six basic principles of “best layout”.

These are:

(i) Principle of Overall Integration:

- provides integration of production facilities like men, machinery, raw materials, supporting
activities and any other such factors which result in the best compromise.

(ii) Principle of Minimum Distance:

- the movements of men and materials should be minimized.

(iii) Principle of Flow:

According to Muther, the best layout is one which arranges the work station for each
operation process in same order or sequence that forms treats or assembles the materials.

(iv) Principle of Cubic Space Utilization:

According to this, the best layout utilizes cubic space i.e. space available both in vertical and
horizontal directions is most economically and effectively utilized.

(v) Principle of Satisfaction and Safety:

According to this principle best layout is one which provides satisfaction and safety to all
workers concerned.

(vi) Principle of Flexibility:

IV - RECOMMENDATION

For me I think after all I had read the topics about plant location, layout and design, I
may recommend that the major factors considered for service providers, is an impact of
location on sales and customer satisfaction. Customers usually look about how close a
service facility is, particularly if the process requires considerable customer contact. Hence,
service facility layouts should provide for easy entrance to these facilities from the freeways.
Well-organized packing areas, easily accessible facilities, well designed walkways and
parking areas are some of the requirements of service facility layout.

needed by a customer. These service layouts follow conventional layouts as required. For
example, for car service station, product layout is adopted, where the activities for servicing a
car follows a sequence of operation irrespective of the type of car. Hospital service is the best
example for adaptation of process layout. Here, the service required for a customer will
follow an independent path.

Initially, economists viewed the plant location decision as a cost-minimization problem.

The optimal location was one where the transportation costs of raw material to the plant and
product to the market was minimized. Between the early 1900s and post World War II
period, most industries were sensitive to the cost of transportation. As transportation costs
became less of an obstacle, the approach to the problem developed with considerations of
trade-offs between transportation and factors such as wages, energy, local regulations, etc. If
lower wages could balance the higher transportation costs of building the plant in a low-wage
area, the low-wage location may be more desirable.

Although location is a long-term investment, a firm does not decide on a location with
the sole objective of maximizing its profits or minimizing its costs. Managers may choose a
“safer” location that is more likely to produce higher profits rather than a riskier location that
yields the maximum investment return. Personal factors of the people involved are also
influences. Plant location must be conducive and properly well ventilated its working
environment that promotes staff comfort.

V- CONCLUSION

I therefore conclude that in facility layout and design is an important component of a

business's overall operations, both in terms of maximizing the effectiveness of the production
process and meeting the needs of employees. The basic objective of layout is to ensure a
smooth flow of work, material, and information through a system. The basic meaning of
facility is the space in which a business's activities take place. The layout and design of that
space impact greatly how the work is done—the flow of work, materials, and information
through the system. Small business owners need to consider many operational factors when
building or renovating a facility for maximum layout effectiveness.

Estimating capacity for a service business layout is somewhat more complicated than it
is in manufacturing. This is because most of the services available in the economy are
delivered on a need basis. Therefore estimating capacity for start up or expansion layout can
prove to be a little tricky especially for inexperienced service providers or in cases where the
plans were rushed without proper research.

Operations managers in service industries should bear in mind that contact with
customers is inevitable. Given that different customers have different tastes that have to be
met, it’s possible to deal with irate customers whose special demand may subject managers
to considerable pressure.

Plant layout is a significant factor in the timely execution of orders. An ideal layout
eliminates such causes of delays as shortage of space, long-distance movements of materials,
spoiled work and thus contributes to the speedy execution of orders. The location and layout
of a plant can greatly impact its economic and operational success. Objectives such as cost
minimization, efficient material distribution, room for expansion, and safety of the plant
operators and local community play important roles in the site decision. The major factors
affecting this decision are market and labor. National and regional environmental
legislation's impact the processes, and thus make some areas more desirable than others.
Least important are land costs and financial incentives. Then with the help of consultants like
master student like me, a location is narrowed down and further analyses are done to justify
the continuation of the project. The location should be obtained before design of the details
of the process. Within the site itself, process units are arranged to allow for the most
economical flow of people and material, optimal safety, and room for future expansion.

VI- References

1. G.P. Towler, R. Sinnott, Chemical Engineering Design: Principles, Practice and

Economics of Plant and Process Design, Elsevier, 2012.
2. J.P. Blair, R. Premus. Major Factors in Industrial Location: A Review. Economic
Development Quarterly. 1987;1(1):72-85.
3. Florence. P. S. (1984). Investment, Location and Size of plant. London: Cambridge
University Press.
4. Sule, D. R. (1994). Manufacturing facilities: Location”, planning, and
design. Boston, MA: PWS Publishing Company.