PLANT LAYOUT

EVALUATION AND SELECTION OF THE SUPPLIER

The purchase policy and procedure differ according to the type of items to be purchased. Hence,

evolution and selection of the supplier differ accordingly. In the ‘purchasing handbook’ edited by

Aljian, it has been described that the following variables to be considered while evaluating the

quotations of the suppliers:

1. Cost Factors

Price, transportation cost, installation cost if any, tooling and other operations cost, incidence of

sales tax and excise duty, terms of payment and cash discount are considered in cost factor.

2. Delivery

Routing and F.O.B. terms are important in determining the point at which the title to the goods

passes from vendor to the buyer and the responsibility for the payment of the payment charges.

3. Design and Specification Factors

Specification compliance, specification deviations, specification advantages, important dimensions

and weights are considered in line with the demonstration of sample, experience of other users,

after sale services etc.

4. Legal Factors

Legal factors include warranty, cancellation provision, patent protection, public liability, federal

laws and reputation compliance.

5. Vendor Rating

The evaluation of supplier or vendor rating provides valuable information which help in improving

the quality of the decision. In the vendor rating three basic aspects are considered namely quality,

service and price. How much weight should be given to each of these factors is a matter of

judgment and is decided according to the specific need of the organization. Quality would be the

main consideration in the manufacturing of the electrical equipments while price would be the

prime consideration in the product having a tense competitive market and for a company procuring

its requirements under the blanket contract with agreed price, the supplier rating would be done

on the basis of two variables namely quality and delivery.

Plant layout refers to the physical arrangement of production facilities. It is the configuration of

departments, work centres and equipment in the conversion process. It is a floor plan of the

physical facilities, which are used in production.

According to Moore “Plant layout is a plan of an optimum arrangement of facilities including

personnel, operating equipment, storage space, material handling equipment and all other

supporting services along with the design of best structure to contain all these facilities”.

2.7.1 Objectives of Plant Layout

The primary goal of the plant layout is to maximise the profit by arrangement of all the plant

facilities to the best advantage of total manufacturing of the product.

The objectives of plant layout are:

1. Streamline the flow of materials through the plant.

2. Facilitate the manufacturing process.

3. Maintain high turnover of in-process inventory.

4. Minimise materials handling and cost.

5. Effective utilisation of men, equipment and space.

6. Make effective utilisation of cubic space.

7. Flexibility of manufacturing operations and arrangements.

8. Provide for employee convenience, safety and comfort.

9. Minimize investment in equipment.

10. Minimize overall production time.

1. Principle of integration: A good layout is one that integrates men, materials, machines

and supporting services and others in order to get the optimum utilisation of resources and

maximum effectiveness.

2. Principle of minimum distance: This principle is concerned with the minimum travel

(or movement) of man and materials. The facilities should be arranged such that, the total

distance travelled by the men and materials should be minimum and as far as possible straight

line movement should be preferred.

3. Principle of cubic space utilisation: The good layout is one that utilise both horizontal

and vertical space. It is not only enough if only the floor space is utilised optimally but the third

dimension, i.e., the height is also to be utilised effectively.

4. Principle of flow: A good layout is one that makes the materials to move in forward

direction towards the completion stage, i.e., there should not be any backtracking.

5. Principle of maximum flexibility: The good layout is one that can be altered without

much cost and time, i.e., future requirements should be taken into account while designing the

present layout.

6. Principle of safety, security and satisfaction: A good layout is one that gives due

consideration to workers safety and satisfaction and safeguards the plant and machinery against

fire, theft, etc.

7. Principle of minimum handling: A good layout is one that reduces the material handling

to the minimum.

11. Maintain flexibility of arrangement and operation