Avoid unnecessary capital investment vii stimulate

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avoid unnecessary capital investment vii. stimulate effective labour utilization i. Simplify the Production Process This is the broadest objective in obtaining a good layout. A good layout should be planned to facilitate the over-all manufacturing process so that it can be carried on in an optimum manner. More specifically Simplification may come from the following: a) Equipment should be arranged to provide greater utilization. Equipment involving high capital inventory should be located so that it can be conveniently used on a multiple-shift basis. Material handling equipment, like conveyors should be located so that a group of products can utilize it conveniently.
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98 b) A good layout will minimize production delays and reduce congestion production delays may be reduced or eliminated by good line balancing. Provision of proper amount of storage space reduces congestion on the floor. c) Good plant layout allows for the needs of maintenance of equipment. Equipment must be located so that routine maintenance is easy to perform. Good layout calls for prediction of future maintenance problems. d) Increasing output or shortening manufacturing time can be provided in an improved layout. Increased output means greater output with the same or less cost saves the man hours and reduces machine hours. Manufacturing time can be reduced by eliminating idle time and removing unnecessary storages. ii. Minimizing Materials Handling In a plant the production machines should be arranged such that the materials pass directly from one machine to the another. Material handling is brought to a minimum by this arrangement of machines. In many situations manual material handling is most economical. Even in this situation reducing the distances required for manual material handling should be considered when planning. iii. Providing high work-in-process turnover Every day material remains in the plant and adds cost to the product because of the tied-up capital investment. In the process industries, for example, in petroleum refineries where the product is in the liquid state, work-in-process turnover is high and unnecessary in- process stages are reduced to a minimum. When the product is in the solid state, it is much more likely to involve a high capital investment in work-in-process. Although this is primarily a production control problem, good layout can be helpful in reducing work-in-process. iv. Effective space utilization Making good use of space involves considering not only production and storage areas, but also the floor area required by service departments. Stock bins spread out on only one level, idle aisles, and unorganized storage areas are all lead to poor space utilization. The cost of floor space varies from one location to another location but considerable thought have to be given for accurately calculating floor area cost.
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