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IntroductIon to IndustrIal ManageMent, Factory locatIon and Plant layout
Concept of Industrial Management
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According to Koontz and O'Donnel " Management is the art of getting things done through and
with people in formally organized groups
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money, men, materials, machines,
methods, markets and marketing in an industrial organisation
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to achieve the
objectives
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Industrial units require to manufacture right quantity, right quality at minimum cost for
survival, prosperity and to keep the customers happy
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➢ Quality products
➢ Preventing wastage and losses
➢ Proper accounting, reporting, and controlling operations in the factory
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Finance is required at every stage
for an industrial unit
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With money all other
inputs can be purchased
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Materials: They are the inputs that have to be processed to get the output
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Machines: refers to the fixed assets used in the manufacturing process
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Hi-tech machines perform the
work faster with minimum errors
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Markets: Traditionally market was considered to be a place where goods were bought and sold
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FUNCTIONS
Planning: Determination of the objectives and the course of action to be followed to achieve them
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Organising: It is the process of dividing work into sections/departments
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Staffing: It is a process that ensures that an organisation has adequate, competent, and qualified
workforce
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It is also known as human resource
function
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Directing has 3 sub functions:
Communication: Communication is effective when it is two ways
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Leadership: It is the process by which a manger guides, influences the work of the subordinates
by issuing orders and instructions to the subordinates
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Controlling: It is the process of ensuring that everything is happening as per the plan
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Co-ordination: creates the team spirit in an organisation
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OUTPUT
Refers to the end result achieved by using the inputs and performing of various functions
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Importance of Industrial Management
1) Optimum use of resources
Management controls and co-ordinates both human and non-human resources
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Workers are trained to handle the
machines properly to avoid accidents and conserve materials to prevent wastages
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Ex- AUL Co
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2) Motivates Employees
Employees can contribute their maximum if motivated rightly
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Ex- CIPLA Ltd provides best working facilities and high salary to keep workers motivated for
higher productivity
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Hence, the try to provide
welfare facilities such as high salary, increment, provident fund, medical, transport, etc
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Any grievances of workers are timely addressed and rules are made in favour of
workers to avoid legal dispute with trade union
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4) Expansion of Business
Growth is one of the main objectives of any business
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Diversification, purchasing new machineries, setting up new
branches or units, franchising, mergers, acquisitions, undertaking exports etc are some ways of
expanding one’s business
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5) Team Spirit
Management tries to create groupism in the organisation
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It also
creates a healthy working environment
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Management spends money, expertise and conduct market
research to identify market trends, customer’s needs and accordingly, use best technology to make
innovative products
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Ex- The use of AI, robots, 3D printers etc
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The managers exercise authority and accept
responsibility for effective management
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8) Social Benefits
Consumers gets the benefits of efficient management in terms of supply of quality goods at
reasonable prices, govt gets tax, investors receive dividend and employees get good salary
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Ex- Project Shakti is HUL's initiative which aims to financially empower women in rural India
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Frederic Winslow Taylor, who is also
known as the father of scientific management, was the first to introduce scientific method at
the workshop level
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Scientific Management is based on sound principles, well defined systems, and scientific
approach
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Under Scientific management, the management is responsible for determining the task for
every employee which is the standard level of work
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Principles of Scientific Management
1) Science not Rule of Thumb
Taylor focused on replacing the old rule of thumb method which is not based on science or exact
measurement
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According to him, even a small work, like loading
of iron pigs into boxcars can be scientifically done
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2) Harmony, Not Discord
Taylor emphasized that there should be no conflict between the workers and managers
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Management should try to provide better pay and a good working
environment to the workers and workers should avoid going on strikes and work hard to the best
of their ability
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If workers are not satisfied with the management, they wear a black badge and work for more
than the normal working hours
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For achieving this, management should welcome the
constructive ideas and suggestions of the workers and reward them if their suggestions were
helpful
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On the
other hand, workers should avoid unreasonable demands and strikes, and should work effectively
and efficiently to achieve the organizational goals
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Then
they should be assigned work according to their mental, physical and intellectual capabilities
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Career development opportunities should be
provided to potential workers through promotion incentives, foreign studies, to obtain maximum
benefit of their skills
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5) Maximum, not Restricted Output
Taylor recommends maximum output from available resources
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This will be
beneficial to both the parties
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Ex-CIPLA Limited achieves higher production in all plants by virtue pay higher salaries and earn
higher profits
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The management should be responsible for planning and organising the work,
whereas the workers should be responsible for the execution of work as per instructions of
management
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Significance of Scientific Management
1) Application and use of scientific methods
Scientific Management emphasizes on scientific selection, training and development of workers
so that problem-solving is not based on random decision-making
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2) Planning and control
Deciding in advance What, How, Where, when and by whom a task is to be done, reduces delay,
duplication, wastages in work
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Allocation of duties as per
skills and specialisation acts as self-control system in work as they love the work they do
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3) Service of Specialists
Taylor suggested scientific selection of workers based on qualification, skill test, trade test in
order to achieve specialisation in work
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He highlighted that management and labour are two distinct
fields of work and their separation is necessary for better work performance by reducing the
burden of work on an individual foreman
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Scientific approach develops standardization
in procedures of work, methods, tools, working hours, working conditions, equipment, materials,
and speed of machines resulting in maximum quality output
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5) Benefits to workers

In differential piece wage system, a standard level of production is fixed
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Differential piece rate system motivates employees to produce more
and enhance their productivity
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This leads to reduction in industrial disputes and provides of industrial peace
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7) Reduces wastage of resources
Scientific management eliminates wastage of time through time study, wastage of material
through method study, wastage of energy through fatigue study, wastage of skills through piece
wage rate
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The expertise, skills of worker are also capitalised through higher output &
reward system
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Similarly, management need to change the attitude
towards foreman workers and other subordinates
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Concept of Factory Location
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A factory is a place where all the industrial activities are housed
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In simple terms it refers to the choice of region and the selection of a particular site for setting
up a factory
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But the choice is made only after considering cost and benefits of different alternative sites
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If at all changed only at
considerable loss
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The ideal location depends on multiple key factors such as availability of raw material, power,
water transport, labour, technology, nearness to market, suitability of climate favourable
government policies, competition between states, etc
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Place must ensure regular availability of required quantity and quality of raw materials at cheap
price
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2) Nearness to the market

As the goods are produced for sale, it is essential for the factory to be located near the market to
undertake prompt deliveries, after-sales services, replacement of orders
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Nearness to the market also enables the organisation to understand the taste and preferences of
consumers
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A place which is well connected by rail, road and water transport is ideal for factory set up
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Priority should be given to that
locality which has adequate supply of labour as required by the factory at a reasonable wage rate
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must ensure that the youths are qualified & trained with required job skills to be
absorbed by industrial units
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There should be
uninterrupted supply (24 x 7) of water by govt
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Motive Power facilities like electricity, petrol,
diesel, gas, coal, and back up facilities like generator, solar, wind power should also be available
for functioning of plant
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The Industrial policy, Exim
Policy, terms & conditions in Acts, laws must be easy
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The tax
burden, (Income tax, GST, Custom duty), exemptions and subsidies available, amount loan
provided etc also affects choice of location
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For example- industries producing cotton and jute require
humid climatic conditions
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Adverse
climatic conditions can affect employee health and have negative impact on productivity as well
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Similarly, disposal of solid
industrial waste requires sufficient vacant area
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The efficiency of production depends on how well the various machines; production facilities
and employee’s amenities are in a plant
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Plant layout is an important decision as it represents long-term commitment
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It is very complex as it involves concepts relating to such fields as engineering, architecture,
economics, and business administration
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Production delays will be reduced and output will increase
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These
mechanical material handling equipment helps to reduce material handling costs
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Good layout solves these
problems
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5) To provide employees comfort and job satisfaction: Provision of safety measures, reduction in
noise, proper ventilation, lighting leads to job satisfaction among employees
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Importance of Plant Layout
1) Maximum use of available space in plant/ workshop
Proper engineering & planning allows optimum use of space available in the factory
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2) Continuous and fast production without breakdown
Plant layout ensures smooth workflow
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Product or process type of layout helps to execute production schedules systematically
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Hence the production continues all 3 shifts,
24x7 to meet rising market demands
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Good plant layout, eliminates unnecessary movements of workers
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4) Minimises efforts in material handling and preservation
Sometimes all materials are brought to desk or moved with automated machines
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Warehouse provides easy access to the materials and also helps in
maintaining records for LIFO, FIFO etc
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Proper
placement of lights and bulbs makes everything clearly visible
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Plant layout makes
provision for air purifiers, windows, chimneys so that there is proper ventilation
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Pathways
are created with markings for workers to move and carry out their respective jobs easily
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Chimneys are fitted to get rid
of harmful gases
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Free
layout provides visibility from distant, CCTV cameras, automated machine signals etc
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Bio metric systems are installed to trace the entry and exit time of the workers
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There must be scope for expansion of production activities
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If the nature of product or process changes, layout should be able to mould
itself accordingly
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Heavy industries like steel, coal, requires huge space
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Products having sensitive chemical properties needs more
provision for safety equipment
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Size of machines is also considered
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Adequate space should be available to install machines with gaps between them to allow
free movement
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Lumpsum production requires
multiple production lines, machines hence need ample space
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Layout also varies based on on-off Season products
and demand lot
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made once in life time requires special time, expertise and space
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If one machine breaks down, it should be convenient
to repair or replace it without disturbing the working of others
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As a matter of fact, the location
(urban/rural), size, shape of the site and its topography influence the general pattern of layout
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6) Employee facilities/ workers
A good plant layout should aim at providing a good working environment and comfort to the
workers
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It should provide for non-slippery floors, protection against dangerous fumes, excess
heat and strong odours
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Policies of the
management relating to production, purchase, and personnel affect the design of plant layout
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8) Characteristics of the building
Shape of building, covered and open area, number of storeys, facilities of elevators, parking area
and so on also influence the layout plan
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But if any building is to be constructed,
proper care should be given to construct it according to the layout plan drawn by experts
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• In this type of layout, the machines are arranged according to the nature or type of the
operations
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• In this layout, several products may share a machine to make its full use
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• This type of layout is more suitable to job order type of production or for non- standardised
products
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So, if a machine breaks down, the
same operation can be performed by other machines in the same department or by a similar
machine in another department
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Thus, a lesser amount of capital is enough as the machines are utilized
to their maximum capacity
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Hence, overhead costs per unit will tend to be lower
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As a result, specialization and division of labour are encouraged
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This flexibility is beneficial for industries that offer tailormade products
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As the floor area required would be large, maximum utilization of the available floor
space is not possible
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This can result in increased transportation costs, the risk of
damage, and longer production times
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4) Skilled Labor Requirement
Process layouts often require specialized skills for the operation of department-specific
equipment
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5)Frequency of Inspection
Under the process layout the same production department is handling different products
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2) Product layout
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Product layout which is also known as line layout includes machines and equipment
arranged depending on the sequence of operations for the production
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• The raw material is supplied at one end of the line and moves from one operation to the next
one quite rapidly with a minimum work in process, storage and material handling
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• In this type of layout, product is given the primary importance and the process machine must
remain present at a point where the product needs its services
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Features of Product Layout
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Special purpose equipment is used
Changeover is expensive and lengthy
Material flow approaches continuous
Material handling equipment is fixed
Operators need not be as skilled
Production time for a unit is relatively short
In product inventory is relatively low

Advantages of Product layout
1) Utilization of Space in Optimum Way
We can appropriately use the available space because of the sequences of machines
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2) Efficient material handling
In product layout, the machines are arranged based on the sequence of operations, so there is no
forward and backward movement
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It also removes the transportation cost, which is associated with moving materials between
machines
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Work-in-process needs less storage space and investment
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5) Smooth Production Flow
The entire production process is incorporated into the product layout
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Thus, this layout
ensures that the production runs smoothly
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There is lack of flexibility of operations as
layout cannot be adapted to manufacture of any other type of product
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Delicate special machines require costly maintenance or repairs
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The
worker has very little opportunity to demonstrate their abilities
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Any breakdown of one machine in the
sequence may result in stoppage of production
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Equipment, labour and components are moved to the location
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It is also called stationary layout
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where the products are very bulky
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This type of layout is not relevant for small scale entrepreneur
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Handling of major assembly is also reduced
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A change in job design and operation sequence can be easily incorporated
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3) Cost saving
The high cost of and difficulty in transporting a bulky product are avoided
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4) Continuity of operations
The other advantage of the fixed position layout is the continuity of operations
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Problems of fixed position layout
1) Limited space
Limited workspace is one of the disadvantages of fixed-position layouts
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2) Cost of Equipment
The product remains in a single area in a fixed position layout, and various tools, equipment, and
machinery are essential to moving the product's location
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3) Need Based Order of Material
One of the drawbacks of utilizing a fixed-position layout is that hardware and materials should
be moved when these are essential
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Large
space is required for storage of material and equipment near the product
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4) Combined Layout

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Plants are rarely laid out either in product or process layout form
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For example, refrigerator manufacturing uses a combination layout
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The final assembly of the
product is done in a product type layout
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are arranged on a functional basis
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Typically used, where an item is being made in different types and sizes
Useful when a number of items are produced in same sequence but none of the items are to
be produced in bulk and thus no item justifies for an individual and independent production
line

Advantages of Combination Layout
1) Optimum utilization of space
2) Lower work in progress inventory
3) Variety of products can be manufactured



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