FACILITY LOCATION

By: Aditi Aggarwal(0196) Ashima Jain(0184) Shirin Maria Varghese(0174)

It is a branch of Productions and Operations Management that concerns with analysis of a geographical location for the optimal placement of its facilities, manufacturing or service.

GLOBALISATION
Meaning & Implications on Location Decisions of Firms

Increasingly global integration of culture, people, and economic activity.

Regulatory Issues Factor Advantages Expanding Markets in Developing Countries

FACTORS AFFECTING LOCATION

DECISION

Market Related Issues:

Market for Products & Services Raw Material Availability Number and proximity of Suppliers Availability of Skilled Labour Quality of infrastructure

Cost Related Issues:

Wage Rates Transportation Costs Taxes and other tariff issues

Regulatory & Policy Issues:

Government & Economic Stability Quality of Legal and other institutions Trading Blocks and Trading Agreements

Other Issues:
Culture Climate Quality of Life

 Factor Rating Method Centre for Gravity Method Load Distance Method Transportation Model

THE CASE STUDY

 Sony started production in Tokyo, Japan in

1955 Set up plant in Park Ridge, New Jersey in 1972, while California was the most preferred location.

Sony located in San Diego as there was a strong yen on the West Coast which was more ideal for finance, meaning the closer to Japan the better for this and also less distance for goods to be shipped.

 When looking for desired sites, Sony executives checked the suitablility of Kentucky. This is where the structuralist theory comes into place as they decided against Kentucky as they didn't serve beer on a Sunday. Sony would determine the choice of site mainly on the following three issues. They would look for flat land compared to the more hilly Pennsylvania, have an adequate water supply and sewerage facilities and also rail access for workers. Sony decided on setting its plant in Pittsburgh, which wasnt originally seen as Desirable as it was a decaying steel city. However, State support was great and there Was a large supply of skilled labour.

GUJARATAN ATTRACTIVE INDIAN STATE

FACTORS LEADING TO THE ATTRACTIVENESS OF GUJARAT

141 CNG stations already established.

42 ports 13 domestic airports & 1 intl. airport Extensive road and rail network. Availability of Quality Infrastructure

83 product clusters 202 industrial estates 60 SEZs 2,200 km gas-grid supplies gas to industrial areas

24-hour power supply.

Initiatives for Improving Infrastructure

Development

around the rivers Sabarmati and Tapi have been undertaken to revitalise the city and improve existing infrastructure. envisages development of commercial, residential and recreational facilities on the riverfront.
the Jawaharlal Nehru National Urban Renewal Mission (JNNURM), 70 projects costing US$ 1.2 billion have been sanctioned for Gujarat

Also

Under

Availability of Skilled manpower

Good

educational infrastructure with premier institutes in: - management - fashion - design - infrastructure planning - pharmaceuticals training institutes in each district for training manpower for shop floor level. initiatives to encourage innovation in the education sector.

Industrial

Many

Policy framework
The

only state in India where the State Government has framed policies in almost all key sectors such as: industry, power, ports, road, IT, agriculture, minerals and tourism.

Gujarats

Industrial Policy, 2009 offers attractive incentives and concessions for prospective investors.

Growing economy and industry

Gujarat

reported a 16 per cent year-on-year growth in GDP at current prices in 2007-08. financial growth and presence of diverse industry sectors with leading national and international companies makes it one of the most attractive investment destinations in the country

A robust

Cultural mix: Attracting Tourism

Various

dance forms of the state include dandiya raas, garba, garbi, rasaka, tippani and padhar like Bhavnath mahadev mela, Dangs darbar, Vichitra mela, Dhrang fair, Trinetreshwar mahadev fair, Kavant mela, Modhera (dance festival), Makar sankranthi, International kite festival (Uttarayan) and navrathri festival. museums and stadiums in the state

Festivals

Various

Presence of product clusters

Special Economic Zones (SEZs)

Gujarat ranks first in terms of total area covered under SEZs in India.
Gujarats three operational SEZs are: - Kandla SEZ - SIR SEZ - SuratApparel Park The first state to formulate an SEZ policy, which includes: - flexible labour laws - exit options for investors.

SEZs in Gujarat get a 10-year corporate tax holiday on export profit: 100 per cent for the initial five years and 50 per cent for the next five years.

BIG PLAYERS IN THE MAJOR INDUSTRIES IN GUJARAT

AGRO & FOOD PROCESSING

AMUL RASNA PARLE ADANI FOOD PRODUCTS VADILAL

TEXTILES & APPARREL

RAYMOND VARDHMAN GROUP RIL ARVIND MILLS ASIAN PAINTS NIRMA CHEMICALS TATA CHEMICALS EXCEL INDUSTRIES

CHEMICALS

ENGINEERING & AUTOMOTIVE

L&T TATA MOTORS LTD APOLLO TYRES STEELCO GUJARAT VIDEOCON LTD
GAIL INDIA ONGC CAIRN INDIA RELIANCE INDS. ADANI GROUP

OIL & GAS