Facilities Location

Corporate expansion means not only getting more office space, but also facilities to manufacture and store supplies and products. Choosing a facility location requires significant financial investment, and therefore prudent planning, to ensure the location is the most cost-effective and functional of all your options. Utilize a broad financial view of each proposed site, taking into account not only its purchase or lease cost but the money put into it over the long term.


The physical layout of the facility location will determine whether future expansion can include adding more facility buildings and enlarging manufacturing space within the site. Whether buildings and manufacturing lines must be created by scratch or they are already exist on-site with minimal renovations is also a consideration.

The need for facilities layout design arises both in the process of designing a new layout and in redesigning an existing layout. The need in the former case is obvious but in the latter case it is because of many developments as well as many problems with in the facility such as change in the product design, obsolescence of existing facilities, change in demand, frequent accidents, more scrap and rework, market shift, introduction of a new product etc.

Objectives of Facilities Layout Design

Primary objectives of a typical facility layout include

(1) Overall integration and effective use of man, machine, material, and supporting services,

(2) Minimization of material handling cost by suitably placing the facilities in the best possible way,

(3) Better supervision and control,

(4) Employee’s convenience, safety, improved morale and better working environment,

(5) Higher flexibility and adaptability to changing conditions and

(6) Waste minimization and higher productivity.

Types of Layout

The basic types of layouts are:

  1. Product layout
  2. Process layout
  3. Fixed position layout
  4. Cellular layout

This type of layout is generally used in systems where a product has to be manufactured or assembled in large quantities. In product layout the machinery and auxiliary services are located according to the processing sequence of the product without any buffer storage within the line itself.



In a process layout, (also referred to as a job shop layout) similar machines and services are located together. Therefore, in a process type of layout all drills are located in one area of the layout and all milling machines are located in another area. A manufacturing example of a process layout is a machine shop. Process layouts are also quite common in non-manufacturing environments. Examples include hospitals, colleges, banks, auto repair shops, and public libraries.



In this type of layout, the product is kept at a fixed position and all other material; components, tools, machines, workers, etc. are brought and arranged around it. Then assembly or fabrication is carried out. The layout of the fixed material location department involves the sequencing and placement of workstations around the material or product. It is used in aircraft assembly, shipbuilding, and most construction projects.

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This type of layout is based on the grouping of parts to form product / part families. Similar parts may be grouped into families based on common processing sequences, shapes, tooling requirements, and so on. The processing equipment required for a particular product family are grouped together and placed in a manufacturing cell. The cells become, in effect, miniature versions of product layouts. The cells may have movements of parts between machines via conveyors or have a flow line connected by a conveyor. This type of layout is used when various products have to be produced in medium to large quantities.


  • Cost

The cost of relocating facilities to the site is a major factor in determining the acceptability of a location. Cost can involve tailoring existing buildings to fit your operations or building an operation from scratch. Land may be cheap, but to make it workable might be expensive.

  • Logistics

The site must have adequate transportation routes to get goods to and from the site. The facility itself must come equipped with adequate electrical and plumbing to run an effective operation; if they don’t yet exist they must be cheap enough to install at the site.

  • Labour

A facility requires labor to run. Management staff might relocate from other areas, but on the ground workers are sourced locally. A facility close enough to a municipality with a healthy supply of labor to operate it is a must.

  • Political Stability

Companies that locate facilities in international locations might benefit from a cost perspective; however, an unstable local government that puts smooth operations at risk are a deterrent to choosing to locate there. Some international locales, however, benefit from a free trade zone with the U.S., saving companies duties on the goods they import back to the U.S.

  • Regulations

Stringent local environmental regulations that limit the nature of business operations can deter a company from choosing a particular location. In addition, government regulations and taxes of various kinds can prove costly down the line. On the flip side, government tax incentives that encourage corporate development can prove a benefit to certain locales.

  • Community

Facility locations are not temporary; the choice you make will stick with your company for the long haul. It’s therefore key that your company fits with the community it’s associated with. Although the municipality might appreciate your company’s facility because it creates jobs, some might resent your presence because of aesthetics or environmental factors. Maintaining a hassle-free relationship with the locals helps ensure your licenses and permits are easier to obtain and maintain over the life of the site.

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