Specific Plant Site-Selection Factors : The specific site cannot be selected until both region and community have already been chosen. Only then car, management turn to selecting a specific site. The following factors should be considered in this respect :
1. Plot of land. The plot of land finally chosen must be one large enough to hold the present plant, provide space for off-street parking for personnel and visitors, and leave room for some future expansion. Title must be clear if purchase is contemplated. If leasing is planned, a long-term lease must be available. The cost price (or lease rental) may also be very important. The topography, soil mixture, and drainage must be suited to the type of building required and capable of providing it with a proper foundation. Construction cost of the building will be higher if distance to bedrock (important for stamping and forging operation) is too great and if the slope of the land is marked.
2. Transportation facilities . Inbound shipments of materials and equipment must be received, whatever the location may be. Similarly, finished goods must go out to customers. Consequently, the selected site must have adequate transportation facilities. Rail sidings, truck ramps, loading and unloading docks, and access streets are each important. Also, there must be enough through highways and railroads serving the community itself. Shop personnel must also find the plant accessible, whether by personal car or by city bus, street car, or taxi. Traffic flow should be smooth and fast; this will be facilitated by nearby expressways.
3. Zoning: Zoning clearance may be lacking at a desirable site. If it is not zoned for industry, zoning clearance must be obtained before the site is safely contracted for, whether by purchase or by lease. Ordinarily, this is not a major problem, desirable sites are usually available in most communities.
4. Proximity to police and fire stations, hospitals and residential and business districts.
5. Adequacy of water and power supply at the chosen site and adequacy of communications and other services. At issue here is the adequacy of gas and water mains and power lines capable o carrying the maximum amount of power which will ever be required in processing. Mail deliveries should be checked, along with adequacy of telephone and telegraph service.
6. Private water supply: While this is not essential, it may prove helpful, at times.
7. Proximity to eating establishments: This is required if the plant does not have its own lunchroom. Employee convenience is the issue. Employees like hot lunches and might not have time enough to go home for lunch.
Responsibility for the Plant Location Decision
The responsibility for making this decision ultimately rests upon the chief executive, subject to approval by the board of directors. In India, plant location decisions are taken by promoters and entrepreneurs.However, there should be a plant location committee, headed by the plant engineer, which can prepare cost analyses with proper supporting data for all proposed locations. A management consultant may also be retained. The management team will consider the committee’s recommendations and the cost analyses and supporting data for the proposed locations before voting a decision to locate at one or another of the prospective locations. In turn, the president and board of directors must approve this t decision.
In short “the guiding principle in determination of an optimum location of a plant that per unit output cost should be minimum for the production and marketing of the product.”
