Wednesday, January 11, 2017

Importance of Plant Location Selection in Apparel Industry

Plant Location:
Plant location is one of the key features of a conversion system (manufacturing system) is the efficiency with which the product or services are transferred to the customers. This fact will include the determination of where to place the plant or facility.
Plant selection for factory
Fig: Plant selection for factory
The plant location should be based on the apparel industries expansion plan and policy, diversification plan for the products, changing market conditions, the available sources of raw materials, and many other factors that influence the choice of the location decision. The selection of plant location is a key-decision as large investment is made in building plant and machinery. The perfect selection of plant location will be the greatest advantage to the apparel industry.

Importance of plant location:
Plant location decisions are important and required management’s careful attention for several reasons.

Three important reasons are following below:

1. Competitions:
Plant location for an apparel industry affects its ability to compete. In garments manufacturing factory location affects direct by cost, transportation, and cost of labor and many others. Thus a good location helps to deliver the product at a cheaper price and hence helps to combat competition.

2. Cost:
Plant location is a major investment decision. If selected wrongly, it is going to affect the performance of the garments industry and location once selected will be difficult to change in near future.

3. Indirect benefits:

These are not visible directly and will not be reflected in garments factory’s accounts.

Different problems of plant location:
The locations of facilities are carried out in three stages:
  1. First stages: Selection of a region
  2. Second stages: Selection of a community
  3. Third stages: Selection of specific size
1. Selection of a region:
This refers to the selection of a particular geographical zone or state taking into consideration such factors as nearness to market and sources of raw materials, basic infrastructure facilities available, climate conditions, taxation and law.

2. Selection of a community:
This factor refers to the selection of specific locality within the selected region. The factor that influence the selection of community are, availability of labor, community attitude, social structure and service facilities.

Generally the following alternatives are available:
  • Urban area
  • Rural area
  • Semi-urban area (near the urban area)
3. Selection of specific size:
This refers to the selection of specific site within the community. The factors that influence the site selection are the cost of the land, availability and suitability of land. The type garments manufacturing process may dictate the site selection.

The condition that demands the particular types of community are as follows:

Condition that demand city or urban location:
  • Highly skilled labor requirement
  • Manufacturing depends on urban utilities
  • Excellent communication and transportation facilities
  • Concentrated suppliers
Condition that demand Semi-urban location:
  • Semi-skilled or female workplace required
  • Large space availability for future expansion
  • Community close to large population centre
Condition that demand rural location:
  • Large site availability for future expansion
  • Requirements of unskilled labor
  • Manufacturing process is dangerous and objectionable
  • Low wage structure
  • Lower property tax rate
  • Lower cost of land