An Insight into Plant siting factors

in #stemng3 years ago

Greetings Steemians, It’s another good day out here and writing again feels awesome after going on an unplanned vacation. Well, I am not really back yet, but I felt you guys could be missing me already. So, I have decided to write this out of the little time I’ve gotten. By the way, I hope you have been learning a lot from my blog.

Please do ensure to always leave your honest opinion at the end of any of my article as I will always do the same for anyone. Your comments and criticisms are highly welcome. In fact, they are not criticisms, as I see them as a wakeup call.

Today is gonna be the first instalment of a segment of production engineering which I like to talk about. I will write the second instalment when I return from my vacation. Well, it’s not that both episodes are dependent on each other but you will understand why I have made them in series in time.

In this first instalment, we will be discussing the factors which any production sector must consider before siting an industry. The fact here is that, any concern can actually benefit from this write-up, but I will be writing with respect to industrial or production engineering. Notwithstanding, you can pick out points for other types of concerns not related to engineering.


CC0 Creative Commons: Plant

Let’s begin

If you read my article on Sand casting, I noted the economic importance of production engineering to any nation. Perhaps, I should reiterate that here again for the sake of those who didn’t read that post.

A careful consideration will reveal to you that production engineering is the backbone of our daily living and that the growth of a Nation (whether economically or industrially) depends greatly on its producing capacity.

How do I mean?

Take a few moments away from this article and look around you, virtually all you see is as a result of one form of production or the other. The car you drive or that which you are driven in, the shelter over you, the clothing covering you nudity, foods, just to mention a few are all as a result of production engineering.

Furthermore, it has been well established that a producing nation will have a successful economy as it will depend less on importation. The reverse is the case for a country which depends more on imported goods. Consequently, the success of any production concern is not only paramount or beneficial to the owners and other stakeholders but to the Nation at large. In fact, the whole nation is a stakeholder if we examine this deeply.

Starting up a new venture is no easy thing and one factor which ensures the success of any industrial venture is its geographical location. Careful thinking must be made when choosing the location of a plant and there are a number of factors that are worthy of consideration. We will look into some of these factors in a bit.

Location study and thus selection of location is key-decision. This is due to the fact that huge funds are invested into building any industry and all the needed facilities. Even if it is feasible, It is foolish to change location very often just because conditions within are not suitable, besides it not an easy task. The best option for any establishment is to select the best location before embarking on any form of construction.

Having said these, I don’t think we can overemphasize the need for any concern (production engineering in this case) to carry-out a long range forecast with respect to the future requirements of the organization. Whatever, the final decision is, the selected location must be such that affords flexibility.

”That is, the selected location should be based on the company’s expansion plan and policy, diversification plans for the products, changing market condition, the changing sources of raw materials amongst other things” (Peter and Klaus, 1991), paraphrased by me.

Finally, there should be unanimity, after the organization must have carried out a deep survey based on their needs and having weighed various options (potential geographical locations), examining what each can and cannot offer.

But what are these factors they must have considered?

For the rest of this article, I will be taking you through the important factors that should be considered in siting an industry.

Here we go

Proximity to Raw Materials

Let me start my defining production

For short, “Production is the transformation of raw materials into finished goods”.

Looking into this definition, it is obvious that raw materials is the key element in production. The source of this raw material is one of the most important factors affecting the selection of a plant location. A plant sited close to the source of raw materials implies that there will be less spending on transportation and storage.

If we have to travel miles to get our grocery supplies, think of how annoying that could be and we decide to store a lot to minimize the times we will go shopping, imagine the amount of space we will have to make in our homes. Nonetheless, this is not even much of a big deal at the domestic level, but becomes a great deal of problem economically on the commercial level.

Some raw materials are perishable (such as in fruit canning and fish processing industries) and could have their quality tarnished before arriving at the processing plant. To avoid this, with a long distance source, there might be need to spend on preserving these materials. However, the best option is to have such plants sited close to the source of these raw materials to eliminate these expenses.

Other raw materials are heavy and bulky to transport and will cause a great deal of fund to transport them to the factory. Such is the case of a cement factory.

A known case
A cement factory I’m aware of, named Larfarge is situated in Ewekoro, a town in Ogun state, Nigeria. One feature that might not be obvious to most people is that this plant is situated in this area because it has rich deposit of limestone. In fact, the quarry is directly opposite the factory. By the way, limestone is the chief element in the production of cement.

What I’m saying in essence is that careful attention must be given to the distance of the source of the raw material before making any final decision.

Availability of Utilities

Remember the definition of production? It reads: “transformation of raw materials into finished goods.”

Yes, raw materials are the starting point of production, but they are of no direct importance to us. We need to have them transformed into other forms which are of more use to us. The transformation process is not spontaneous but requires the input of Energy in an appropriate form.

You will agree with me that nothing comes for free. There is a price for everything and the price for the transformation of raw materials into finished products is energy input. The form of energy required depends on the type of operation that is been carried out in the said plant but may be in the form of heat, electricity or even mechanical.

Basically, whatever form of energy required, electricity and/or use of fuel are the primary sources. Consequently, we can say that electricity and fuel are major factors to be considered in selecting a plant location. Thus, the proximity of the plant relative to the source of energy must be well examined to ensure adequate and constant supply to meet the energy demands.

Typically, an industry whose operation is electrolytic will require a cheap source of electricity and would be best situated near a hydroelectric power plant, due to the inexpensive nature of hydropower albeit there are times when it will be cheaper for a company to generate electricity on its own instead of connecting to the grid - such power plants are known as captive power plants (I know of a Fininsh company, by the name Wartsilla which specialize in).

On another hand, aside ensuring that the potential location guarantees the supply of the energy demands, the availability of Water supply is another factor.

The need for water in all ramification of life cannot be over-emphasized. Water is virtually needed in everyday living. Cooling, washing, steam generation and even as raw material are few amongst the purpose which this utility serves. Thus, any industrial concern must be located where a constant supply of water is guaranteed.

Another known case
A steam power plant for instance, is best situated where there is abundant supply of water. For instance, Egbin power plc., the largest power generating station in Nigeria is located near the Lagos lagoon for the purpose of condenser cooling.

The concern can source for geological information from the right bodies to aid in their survey to get the best location that renders enough supply of water. Sometimes however, there will be need to drill wells when the water needs are not too much.

Proximity of consumers

Of what use of the finished goods without a user? This question bring another factor into prominence – the proximity of the location to the consumers.

Looking at the definition I gave on production, a careful thinking will show that the definition could be complemented by adding “…for human consumption”. Of course, virtually every product is made to satisfy the need of humans. There’s no point in making a product with no users for it.

Thus, a concern must think of how to reach its end-users. They must choose a location that ensures timely delivery of their product and also close to the market for economic reason. Too long distance will result in increased cost of transportation and also delay. Since, every organization strives to minimize production cost (with the distribution cost being one), it is hence paramount that they choose a location that is closer to the market.

This particular factor, has a great influence in that it determines where the loyalty of the customers’ lie. With a guarantee of regular availability, customers are convinced that they will get a particular product at their needed time and can rely on such concern providing it. Otherwise, they will opt for an available substitute.

As in the case of raw materials, when the finished products are heavy and bulky and thus are tedious to transport, it is best to site such industry close to the market. Beer and soft drink industries are in this category. Perishability of the finished product is another thing that will warrant nearness of a plant to the consumers.

Available transportation networks

Except a company needs to be Isolated, then it surely needs transportation. But what venture wants to be Isolated? There’s need to move in raw materials and also dispatch the finished products to the consumers.

I don’t have to list the modes of transportation which are available today – I’m sure everyone is much aware of that. What I need to point out however, is the fact that air transportation is not much of our concern in this context. The other modes of transportation, which are land, railway and water are of much concern since they are often used.

The means of transportation that best fit an industry is a function of the nature of the raw materials and products they handle. A concern must examine the available transportation network in the potential location to see whether it meets their requirements. Another point worthy of note is that they should also make findings regarding cost of transportation in this intended location to know whether it will be economical.

Availability of Labour

No matter how the cross fields of Automation and Robotics are making waves in industrial outfits, they cannot completely decimate the need for human input.

Any organization should look into the labour characteristics of their potential location to see whether the available labour fits their requirement. Labour though is mobile. That is, the required labour (humans) can travel from their respective location to whatever location has been selected by their employer.

However, it is better to site the industry in a place where the qualified type of labour resides. By doing so, costs will be saved in terms of the need to compel labour to migrate to the location of the industry.

Conclusion

There are actually more factors which have to be considered before any concern should select a site for construction. I have only discussed the major ones. Other factors such as meteorological considerations; government policies, like environmental regulation (e.g. waste disposal), tax payment; socio-economic considerations like availability of labour and so on are what any organization should check before making the final decision.

In all, the final decision is a compromise between all these factors. One thing in life is that perfection cannot be found in a single entity. You will find some qualities and some will be missing. There’s a saying in my language which loosely translate thus: “The hand of a child cannot reach high places and that of an adult cannot fit into a narrow-neck calabash”.

What this simply means is that no one has it all. Hence, your best bet is to weigh your options against your needs and see what you can trade off and such is apropos in location study and in siting an industry.

Allow me draw the curtain here. In the meantime, anticipate the second instalment where we will look at Plant Layouts.

Thanks for being here.

References

  • Ismaila, S. O. Production Management. Federal University of Agriculture, Abeokuta.
  • Peters, M. S and Klaus, D. T. (1991) Plant Design and Economics for Chemical Engineers (International Edition).
  • Kumar, S. A and Suresh, N. Production and Operations Management (Second Edition).
  • Factors to consider when locating an Industry

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Great post mate. One of the important factors of production anywhere in the world is Costs. Costs of raw materials and labour plays a major role in production

This is an excellent write up, but I do have a question. Is there a ranking order for these factors or they are equal?

Thanks Addempsea. I wouldn't say there's or there's not a ranking of these factors as it is not easy to rank them. But what you should know is that some factors are equally important and would be at the forefront for decision making. Factors like the raw material source, energy and proximity to the consumers would have same weight and will most likely be the first to be considered. However, everything boils down to what the need of the organization is.

Thanks for coming around man.

Thanks for the explicit explanation.

Indeed i must say, there are lots of factors to put into consideration while siting a plant, wanted to do something like this though on power plants, One major factor to consider amongst others, is the environmental hazards such might cause, all in all sir, you deserve some accolades for this wonderful piece

Well said actually, a lot needs to be considered before siting a plant and having the ecosystem in mind is one which we cannot overlook. Thanks for dropping by.

As far as I am concerned, I think that these guides are not taken into account nowadays. I only see the previous industry being dismantled, sold for scrap and destroyed.
I would really like to see investments pouring in back into the industry, but a clean industry that would produce what we need, not work in vain to produce another product that is useless and will just be dumped in 1 year. I know it's not my call, but this is what I feel about the industry nowadays (i'm eyeing you, oil industry).

Understanding the need of the consumers is the key to making relevant products but making a good location survey is another which helps to ensure the success of any industry.

Thanks for dropping by man, It's always nice to have you here.

Another factor is checking if the area in the future won't be residential in which will affect...

Of course, this is more important. It could be a key factor over time

Yeah... Considering the community around is another important factor. Thanks for the input

I guess you've said it all, aside engineering these are points to consider before embarking on production including in Agriculture.

Well done!

Yeah... Any Concern can adopt this.

Thanks for dropping by.

As with most successful businesses, site selection is KEY. A bad plant site could lead to disaster, so get multiple opinions and go for the best.

Nice read sir. Anticipating!!!

Thanks for the contribution.

It's been a while by the way.

You're welcome sir.

Yeah, engulfed with school activities, + my network is not always encouraging, it turns me off most times. So I'm trying to balance the equation.

Hmm... It's good to have a balance life so that you are not missing out on the important things of your life. School won't be forever.

As important as having a capital is to a business, correct siting conditions are equally important

You can have the best resources but a single mistake with siting as esp. as regards to raw materials, customers and transportation, u could die faster than people with fewer resources but better siting advantages

Thanks for this awesome walkthrough..Quality is the watchword!

Keep steeming!!

Thanks for the input man. It's good to always have you come by.

Always a pleasure

I think this post is a perfect one. It addresses the underlying factors of siting a firm or an industry as it should be. And it advices "Weighing of our options" which is very important. However, i believe most industries are already used to these factors. Because at every level, in every concern, when production is considered, these factors are always mentioned. So i ll say this is a well written and perfectly constructed reminder. I didn't want the post to end.
I would like to see more Medium and small scale businesses look attentively at these factors. Most of them fail to recognize the usefulness that is in having their businesses set up in favorable locations.

Thanks for this helpful reminder.

Well said @mellz, many start-ups will fail due to the lack of proper siting. Thanks for your comprehensive and careful contribution.

Incredible! Astonishing! This is quite a marvelous insight, if only they are considered today when siting a plant.

Thanks anyway for providing this. Quite informative.

It's sad actually that many concerns do that put these into consideration. Thanks for the kind words by the way, its honor to have you here and a pleasure me to share my knowledge.

This is brilliant. I took in everything.

At first, I used to query the idea of having different oil companies in a depot. This is because of how far they need to get their products either petrol, diesel, kerosene or oils to neighbouring states. Over time, I realized the major key for having them together was because of receiving their products in bulk from ships that discharge in a habour close to the depot.

Thumbs up!

I will start by saying for any producing firm. The goal is to have the right quality, right quantity, right price and right time.
let me then chip in terms of right time. timeliness of delivery is an important parameter to judge the effectiveness of a production department. Therefore to meet up with this goal location siting is key which shouldn't be overlooked. Thanks for this post mate. If only some of our crumbling production industries can adopt this.. Thumps up

Hope you are enjoying your vacation? missing you already.

Hey, thanks man... I'm actually back now. It's good to have you here.

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