pharmaceutical factory location,layout,planing

Category: Education

Presentation Description

No description available.


Presentation Transcript

PowerPoint Presentation:



INTRODUCTION Industrial growth in India is very fast. Factories Act was passed in1948 then amended in1950, 1951, 1954 and1976. Various crucial decisions of business, namely Location , L ayout (the arrangement of physical facilities), D esigning the product, Production planning and control and maintaining good quality of product. 2

PowerPoint Presentation:

In this lesson study of plant location ,layout and planning. Industry are two type depends on its size and nature. Small scale industry The local market for the product is available. It can easily be shifted to other place, when there is any change in the market. Large scale industry Huge amount of investment has already been done the selection of proper site is very important. 3


OBJECTIVES Describe the concepts of plant location and plant layout Identify the various factors to be considered for selection of plant location Distinguish among the alternative patterns of plant layout Discuss the various factors influencing the choice of an initial layout and its subsequent modification 4

PowerPoint Presentation:



LOCATION Plant location Ideal location Selection of a particular site for setting up a business or factory Cost of the product is kept to minimum. It is the place of maximum net advantage or which gives lowest unit cost of production and distribution 6


LOCATION ANALYSIS Demographic Analysis : It involves study of population in the area .like Total population (in no.), Age composition, Per capita income, Educational level. Demographic Analysis Trade Area Analysis Competitive Analysis Site economics Traffic analysis 7

PowerPoint Presentation:

Trade Area Analysis : Geographic area analysis. To provides Continued clientele to the firm. Feasibility of accessing the trade area from alternative sites. 3. Competitive Analysis : It help quality of competition in a given trade area. 4. Traffic analysis: To have a rough idea about the number of potential customers passing by the proposed site during the working hours of the shop. 5. Site economics : Alternative sites are evaluated in terms of establishment costs and operational costs under this. Establishment Cost: is basically cost incurred for permanent physical facilities , Operational costs are incurred for running business on day to day basis, they are also called as running costs. 8


IMPORTANCE OF SELECTION PLANT LOCATION Heating Ventilation requirements Storage capacity of raw material Power needs , Cost of labours, Taxes, Land construction, fuel, etc. 1.Cost Investment costs 2.Physical factor 3.Gove. rule Choice of location keeping national benefits. Partially determines costs. Operating 9


FACTORS RESPONSIBLE FOR THE PLANT LOCATION CHOICES: Availability of Raw material: Nearness to the potential market: Location should be near to source of operating power: Supply of labour: labour is one of the most important inputs in any industrial enterprise. Transport and communication facilities: connected with rail way, airport, road, water and air transport system is considered Suitability of climate: climatic conditions such as humidity, temperature and other atmospheric conditions should be favourable for the plant. For the example, humid atmosphere is not suitable for the formation of pharmaceutical 10

PowerPoint Presentation:

Availability of housing and services: good housing facility, adequate shopping centre, cinema halls, local transport facilities, rail services and sufficient availability of gas, water supply, disposal of waste, can easily attract good staff. Safety requirements: cause pollution or processes explosives in nature should be located in remote areas. Miscellaneous considerations: The consideration like low interest on loans, special grants, attitude of residents, towards the industry, living standards etc. helps in locating in the site of plants. 11


SELECTION OF SITE: It should be Connected with rail, road and river transports. Efficient sewage system for the disposal of water and waste materials Surroundings good and peaceful Sub-soil capable of bearing the load of the building plant and equipment. Sufficient land space requirements for the parking of transport and sufficient space for residential accommodation for staff and labour 12


SELECTION OF SITE: urban areas It near to city. therefore Provide better transport and communication system with sufficient labour supply & also social services like medical, entertainment, restaurants, educational etc. But in urban area, cost of land and labour wages are likely to be on higher side. Rural areas It near to village. therefore provide cheaper land and labour with scope for further expansion, good shopping complexes, entertainment facilities, school and colleges and In general, rural location is good for large plants. 13


SPECIAL ECONOMIC ZONE (SEZ) Special Economic Zone (SEZ) is a geographical region that has economic and other laws that are more free-market-oriented than a country's typical or national laws. The category 'SEZ' covers a broad range of more specific zone types, including Free Trade Zones (FTZ), Export Processing Zones (EPZ), Free Zones (FZ), Industrial parks or Industrial Estates (IE), Free Ports , Urban Enterprise Zones and others. 14

PowerPoint Presentation:

Objectives of the SEZs are : (a) Generation of additional economic activity; (b) Promotion of exports of goods and services; (c) Promotion of investment from domestic and foreign sources; (e) Development of infrastructure facilities. 15

SEZs in India:

SEZs in India India was one of the first in Asia to recognize the effectiveness of the Export Processing Zone (EPZ) model in promoting exports, with Asia's first EPZ set up in Kandla in 1965. the Special Economic Zones (SEZs) Policy was announced in April 2000 The Special Economic Zones Act, 2005, was passed by Parliament in May, 2005 which received Presidential assent on the 23rd of June, 2005. The draft SEZ Rules were widely discussed and put on the website of the Department of Commerce offering suggestions/comments. Around 800 suggestions were received on the draft rules. After extensive consultations, 16

PowerPoint Presentation:

the SEZ Act, 2005, supported by SEZ Rules, came into effect on 10 February 2006, providing for drastic simplification of procedures and for single window clearance on matters relating to central as well as state governments. The major incentives and facilities available to SEZ developers include:- Exemption from customs/excise duties for development of SEZs for authorized operations approved by the BOA. Income Tax exemption on income derived from the business of development of the SEZ in a block of 10 years in 15 years under Section 80-IAB of the Income Tax Act. Exemption from minimum alternate tax under Section 115 JB of the Income Tax Act. Exemption from dividend distributio'Bold textn tax under Section 115O of the Income Tax Act. 17

PowerPoint Presentation:

5. Exemption from Central Sales Tax (CST). 6. Exemption from Service Tax (Section 7, 26 and S Currently there are 114 SEZs (as of October 2010) operating throughout India . more than 500 SEZs are formally approved (as on October 2010) by the Government of India 18

Who can set up an SEZ and what requirements are there? :

Who can set up an SEZ and what requirements are there? An SEZ can be set up jointly or individually the Central Government, a state government or any other body, including a foreign company, for the purpose of (1) Manufacturing goods, (2) Rendering services, (3) For both of these reasons or (4) As free Trade and Warehousing Zone (FTWZ). 19

Types of SEZ :

Types of SEZ Sector Specific SEZ-units may be set up for – Manufacture of one or more goods in a sector – rendering of one or more services in a sector Multi-product SEZ-units may be set up for – Manufacture of two or more goods in a sector or goods falling in two or more sectors – Trading and warehousing – rendering of two or more services in a sector or services falling in two or more Sectors Other SEZ’s – SEZ in a port or airport – SEZ for Free Trade and Warehousing 20

Minimum Land Requirement :

Minimum Land Requirement 21

PowerPoint Presentation:

Minimum Investment Requirements Sector Specific SEZ’s – Investment should be more than Rs. 250 crores or – Net worth* of Rs. 50 crores Multi product SEZ’s – Investment should be more than Rs. 1000 crores or – Net worth* of Rs. 250 crores BoA may however consider proposals not meeting minimum investment/net worth criteria on merits if required * Net worth of promoter company along with group companies and the flagship companies to be considered for the purpose of calculation of net worth 22

PowerPoint Presentation:

23 Approval mechanism Approval mechanism for the establishment of an SEZ for a private developer

  Approval mechanism for the establishment of an SEZ for the Central and state government as a developer :

Approval mechanism for the establishment of an SEZ for the Central and state government as a developer 24

Administrative structure of an SEZ :

25 Administrative structure of an SEZ

PowerPoint Presentation:

26 Who Can Apply [Incorporating provisions of SEZ Act, 2005 and SEZ Rules, 2006] Who can make the Application for setting up of SEZ? A Special Economic Zone may be established under this Act, either jointly or severally by ; – the Central Government, – State Government, or – any person for manufacture of goods or rendering services or for both or as a Free Trade and Warehousing Zone. [Refer section 3, sub-section (1) of SEZ Act, 2005]

PowerPoint Presentation:


PowerPoint Presentation:



ADVANTAGES 15 year corporate tax holiday on export profit – 100% for initial 5 years, 50% for the next 5 years and up to 50% for the balance 5 years equivalent to profits ploughed back for investment. Allowed to carry forward losses. No licence required for import. Duty free import/domestic procurement of goods for setting up of the SEZ units. Goods imported/procured locally are duty free and could be utilized over the approval period of 5 years. Exemption from customs duty on import of capital goods, raw materials, consumables, spares, etc. Exemption from Central Excise duty on the procurement of capital goods, raw materials, and consumable spares, etc. from the domestic market. Exemption from payment of Central Sales Tax on the sale or purchase of goods, provided that, the goods are meant for undertaking authorized operations. Exemption from payment of Service Tax. 29

PowerPoint Presentation:

Exemption from payment of Service Tax. The sale of goods or merchandise that is manufactured outside the SEZ (i.e, in DTA) and which is purchased by the Unit (situated in the SEZ) is eligible for deduction and such sale would be deemed to be exports. The SEZ unit is permitted to realise and repatriate to India the full export value of goods or software within a period of twelve months from the date of export. “Write-off” of unrealized export bills is permitted up to an annual limit of 5% of their average annual realization. No routine examination by Customs officials of export and import cargo. Setting up Off-shore Banking Units (OBU) allowed in SEZs. 30

PowerPoint Presentation:

OBU's allowed 100% income tax exemption on profit earned for three years and 50 % for next two years. Exemption from requirement of domicile in India for 12 months prior to appointment as Director. Since SEZ units are considered as ‘public utility services’, no strikes would be allowed in such companies without giving the employer 6 weeks prior notice in addition to the other conditions mentioned in the Industrial Disputes Act, 1947. The Government has exempted SEZ Units from the payment of stamp duty and registration fees on the lease/license of plots. External Commercial Borrowings up to $ 500 million a year allowed without any maturity restrictions. Enhanced limit of Rs. 2.40 crores per annum allowed for managerial remuneration. 31

PowerPoint Presentation:

DISADVANTAGES Revenue losses because of the various tax exemptions. Most players are interested in setting up SEZ’s with an eye on the real estate bounty so that they can acquire at cheap rates and create a land bank for themselves. The number of units applying for setting up EOU’s is not commensurate to the number of applications for setting up SEZ’s leading to a belief that this project may not match up to expectations. 32


Arrangement of physical facilities such as machinery, equipment, furniture etc. within the factory building. Pilot Plant: - It is the part of the pharmaceutical industry where a lab scale formula is transformed into a viable product by development of practical procedure of manufacture. Scale-up: - The art for designing of prototype using the data obtained from the pilot plant model. PLANT LAYOUT 33

pilot plant layout.:

pilot plant layout . 34

PowerPoint Presentation:



IMPORTANCE Plant layout provide the optimum relationship between output, floor area and manufacturing process. Facilitates of production process, To minimizes material handling, time and cost, and flexibility of operations, easy production flow, makes economic use of the building, promotes effective utilization of manpower, and provides for employee’s convenience, safety, maximum exposure to natural light and ventilation. It is also important because it affects the flow of material and processes, labour efficiency, supervision and control, use of space and expansion possibilities etc. 36


ESSENTIALS Proper and efficient utilization of available floor space. To ensure that work proceeds from one point to another point without any delay. Provide enough production capacity. Reduce material handling costs Reduce hazards to personnel Reduce accidents 37

PowerPoint Presentation:

Provide for volume and product flexibility Provide for employee safety and health Allow ease of maintenance Allow high machine or equipment utilization Improve productivity Increase employee morale 38

PowerPoint Presentation:

Oral liquid 30 M 2 basic installation+ 10 M 2 ancillary Semi solid preparation 30 M 2 + 10 M 2 for ancillary Granulating section 30 M 2 Solid dosage form compression section 30 M 2 + 20 m 2 ancillary Coating 30 M 2 + 10 m 2 ancillary Powder 30 M 2 Filling of hard gelatine cap. 25 M 2 + 10 M 2 ancillary Parenteral preparation Total 150 M 2 mfg. area+ 20 m 2 ancillary svp or 150 M 2 for lvp aseptic Filling and sealing Filling and sealing General room Eye oint. And eye lotion 25 M 2 + 10 m 2 ancillary Suppositories 30 M 2 As per schedule-M require area 39

PowerPoint Presentation:

Manufacturing units Product or line layout Process or functional layout Fixed position or location layout Combined or group layout Traders Service Establishments TYPES OF LAYOUT Self service or modified self service layout Full service layout Special layouts 40

Product or line layout:

Product or line layout Machines and equipments are arranged in one line. The materials move form one workstation to another sequentially without any backtracking or deviation. sequence arrangement of operations required for the product. Materials are fed into the first machine and finished goods travel automatically from machine to machine, the output of one machine becoming input of the next, Therefore 41

principles. :

principles. All the machine tools or other items of equipments must be placed at the point demanded by the sequence of operations. There should no points where one line crossed another line. Materials may be fed where they are required for assembly but not necessarily at one point. All the operations including assembly, testing packing must be included in the Line. 42


Advantages : Low cost of material handling, due to straight and short route and absence of back tracking. Continuous flow of work Lesser investment in inventory and work in progress Optimum use of floor space Shorter processing time or quicker output Less congestion of work in the process Lower cost of manufacturing per unit 43


Disadvantage High initial capital investment in special purpose machine Heavy overhead charges Breakdown of one machine the whole production process are stop. Lesser flexibility as specially laid out for particular product. Suitability Mass production of standardized products Simple and repetitive manufacturing process Operation time for different process is equal Continuous supply of materials 44

Process layout: :

Process layout: In this type of layout machines of a similar type are arranged together at one place. E.g. Machines performing Compression operations are arranged in the Compression department. Therefore the machines are installed in the plants, which follow the process layout. PRINCIPLE The distance between departments should be as short as possible for avoiding long distance movement of materials The departments should be in sequence of operations The arrangement should be convenient for inspection and supervision 45

PowerPoint Presentation:

Lower initial capital investment in machines and equipments. The overhead costs are relatively low Change in output design and volume can be more easily adapted to the output of variety of products Breakdown of one machine does not result in complete work stoppage Supervision can be more effective and specialized There is a greater flexibility of scope for expansion. Advantages: 46


Disadvantage Material handling costs are high due to backtracking More skilled labour is required resulting in higher cost. Time gap or lag in production is higher Work in progress inventory is high needing greater storage space More frequent inspection is needed which results in costly supervision 47


Suitability Products are not standardized Quantity produced is small There are frequent changes in design and style of product Machines are very expensive 48

Fixed Position or Location Layout :

Fixed Position or Location Layout In this type of layout, the major product being produced is fixed at one location. Equipment labour and components are not moved to that location. All facilities are brought and arranged around one work center. This type of layout is not relevant for small scale entrepreneur. It saves time and cost involved on the movement of work from one workstation to another. The layout is flexible as change in job design and operation sequence can be easily incorporated Adjustments can be made to meet shortage of materials or absence of workers by changing the sequence of operations. Advantage 49


Disadvantage Production period being very long, capital investment is very heavy Very large space is required for storage of material and equipment near the product. As several operations are often carried out simultaneously, there is possibility of confusion and conflicts among different workgroups. Suitability Manufacture of bulky and heavy product. 50

Combined layout   :

Combined layout In most of industries, only a product layout or process layout or fixed location layout does not exist. Generally, a combination of the product and process layout or other combinations are found, in practice. E.g. for industries involving the fabrication of parts and assembly, fabrication tends to employ the process layout, while the assembly areas often employ the product layout. In soap, manufacturing plant, the machinery manufacturing soap is arranged on the product line principle, 51


Traders When two outlets carry almost same merchandise, customers are attracted and kept by good layout. i.e. Good lighting, Attractive colours, Good ventilation, Air conditioning, Modern design. All of these things mean customer convenience, customer appeal and greater business volume. There are three kinds of layouts in retail operations today. 1. Self service or modified self service layout 2. Full service layout 3. Special service layouts 52

Services centers and establishment:

Services centers and establishment Services establishments , must give due attention to customer convenience, quality of service, efficiency in delivering services. 53


ADVANTAGES OF A GOOD LAYOUT: To the worker: Decreasing number of operation and material handling. reduction in length of hauls and motions between operations, which minimize production time as well as the activities of workers. more labour productivity i.e. more output per man hour. more safety and security to workers from accidents. Better working conditions resulting in improved efficiency. In manufacturing costs: Maintenance and replacement costs are reduced. Loss due to waste and spoilage is minimised. Improved quality of product with reduction in handling , time and cost. Better cost control. 54

PowerPoint Presentation:

In production control and supervision: provides more space for production operation. Easy Availability of Raw material. The cost of production are minimized. Control and supervision operations are provided at appropriate points 55


FEATURES OF A GOOD LAYOUT: There should be sufficient space for the workers as well as for the equipment to perform their functions. This will ensure smooth and continuous flow of production process. It must provide adequate safety and security to workers against accidents or injury. For example, provision of firefighting equipment, first aid boxes, etc. The arrangement of machines and equipment should be such that minimum material handling is necessary for low cost processing. The store for in-process material should be such that minimum material handling is necessary for low cost processing. The supervision, coordination and control of the activity should be effectively and easily executed. 56

PowerPoint Presentation:

There should be sufficient scope for making adjustment and modifications whenever any need arises. Good cGMP Design Features Include: Clear layouts Appropriate detailing and finishes Adequate room sizes and staging areas Flexibility: Able to adapt to different uses Able to bring new services to the rooms Ease off clean up Modulations 57


FACTORS INFLUENCING LAYOUT Factory building: determines the floor space available for layout & special requirements such as.. air conditioning, dust control, humidity control etc. must be kept in mind. Nature of product: product layout is suitable for uniform products whereas process layout is more appropriate for custom-made products. Production process: In assembly line industries, product layout is better. In job order or intermittent manufacturing on the other hand, process layout is desirable. Type of machinery: General purpose machines are arranged as per process layout while special purpose machines are arranged according to product layout 58

PowerPoint Presentation:

Repairs and maintenance: Machines should be arranged that adequate space is available between equipment & easy to repairs the machines. Human needs: Adequate arrangement should be made for washroom, lockers, drinking water, toilets and other employee facilities, proper provision should be made for disposal of effluents, if any. Plant environment: Heat, light, noise, ventilation and other aspects should be duly considered, e.g. paint shops and plating section should be located in another hall so that dangerous fumes can be removed through proper ventilation etc. 59


APPLICABILITY OF PLANT LAYOUT Plant layout is applicable to all types of industries or plants. Certain plants require special arrangements discussed above. Applicability of plant layout in manufacturing and service industries is discussed below. Ex: manufacture of talcum powder. Here machinery is arranged vertically i.e. from top to bottom. Thus, material is poured into the first machine at the top and powder comes out at the bottom of the machinery located on the ground floor. Generally, the receiving and the dispatching departments should be at either end of the plant & order to minimize handling costs .The storeroom should be located close to the production. 60

PowerPoint Presentation:

The maintenance department consisting of lighting, safety devices, fire protection, collection and disposal of garbage, scrap etc. should be located in a place which is easily accessible to all the other departments in the plant. The other employee facilities like toilet facilities, drinking water facilities, first aid room etc. can be a little away from other departments but should be within easy reach of the employees. 61


PLANNING:- Planning is the process of deciding in advance what to do, how to do it, when to do it and who is to do it. It involves the selection of objectives, policies, procedures, and programmed from among alternatives. 62



PowerPoint Presentation:

Plans are prepared to achieve certain objectives or goals. For example, main objective of the company is to increase profits by 25% during the next year. So the production and sales targets should be decided on this basis. 1. Definition and description of objectives: 64

2.Determination of planning premises:

2.Determination of planning premises There are the assumptions about the future. Planning premises are established with the help of forecasting. There are following types: Tangible and intangible premises Internal and external premises Controllable and uncontrollable premises 65

1. Tangible and intangible premises:

1. Tangible and intangible premises Tangible premises intangible premises expressed in quantitative e.g. units of production, capital investments, time available etc employees morale, good will of the enterprise, motivation etc. 2. Internal and external premises: Internal premises: external premises: assumption about the internal working of the enterprise. E.g. capital, machines, personnel etc. On the other hand factors outside the enterprise e.g. changes in technology, population growth, changes in competition, government policies etc. 66

3. Controllable and uncontrollable premises::

3. Controllable and uncontrollable premises: Controllable premises: uncontrollable premises: Policies and programmed of the organization which can be fully regulated by the management are controllable premises. Uncontrollable premises are the external factors like trade cycles, political changes etc. which are beyond the control of management. 67

3. Discovering alternatives courses of action:

3. Discovering alternatives courses of action the various courses of action are discovered in order to achieve the established objectives. Information may be collected from primary sources secondary sources Information obtained from market Information obtained from pharmaceutical company 68

4.Evaluation of alternative courses:

4.Evaluation of alternative courses the various alternatives are evaluate the best alternatives is selected. once the basic plan is decided, the next step is to develop detailed plans for its implementation. These detailed plans refers to the policies, procedures, rules, programmers, schedules, budgets etc. for example, when pharmaceutical company decides to develop a new product, procurement of funds, purchase of raw materials, training of personnel, advertising for the product have to be prepared. 5.Formulation of derivative plans 69

6. Communicating the plan: :

6. Communicating the plan: Plan should be explained to the subordinates in order to get their support in the execution of plans. 7.Receiving the planning process All plans should be reviewed from time to time in the light of current circumstances and necessary action should be taken to keep them up-to-date. 70


SALIENT FEATURES OF PLANNING 1. Planning is goal oriented Planning is done to certain objectives and all plans are linked with the goals of the organization. 2. Planning is future oriented : Scientific anticipation of future events is called forecasting .it is the based on planning. For example, manufacturer prepares the production plan of the next year after forecasting the demand. 3. Planning is intellectual process : Planning is a mental exercise and it involves the creative thinking and imagination. Planning is not mere guess work but involves logic and systemic thinking. 71

PowerPoint Presentation:

4. Planning is a primary function of management : It precedes organizing, staffing, directing and controlling. All these function are preformed within frame work of plans. Thus planning is the most basic function. there are primary function of management : 5. Planning is continuous: It is ongoing process. Plans are prepared for a specified period say for one year. At the end of that period, new plans have to be prepared. Similarly, existing plans are required to be changed, if the conditions are changed. Thus planning is never ending exercise. 6. Planning involves choice: Planning is essentially the process of choosing from among alternatives course of action. If there is only one possible alternatives, there is no need for planning as there is no choice. The planning is needed when there are various alternatives to reach to a definite goal. 72

PowerPoint Presentation:

8. Planning is pervasive : It is required in all types of organization and at all levels of management. Every department prepares plans. However, the scope of planning may differ from one level to another. For example, top management plans for the whole of the organization; middle management prepares departmental plans, whereas the lower management prepares day to day operational plans. 73


ADVANTAGES Planning makes goals clear and specific. Planning helps the organization to keep on the right path. Planning reduces the risks and uncertainly. It improves the efficiency of operation because planning involves selection of the best possible course of action. It provides basis of control. Planning provides the standard against which the actual performance can be measured and evaluated. 74

PowerPoint Presentation:

It promotes creativity, because only sound planning encourages creative thinking. This leads to growth and expansion of business. It facilitates decision making. involves forecasting of future conditions and helps the management to take correct decision. 75


LIMITATIONS Planning is an expensive process. Money is involved in forecasting, collection of information and evaluation of alternatives. Planning is a time consuming process. So it is not practicable during emergencies and crises, when quick decisions are necessary. Planning creates a rigid frame work in the organization. Changes in business environment restrict freedom of planning for the management. Planning creates a false sense of security because detailed planning gives a feeling among employees that everything has been taken care of. Planning creates a psychological barriers, because executive have more regard for the present than future. 76

PowerPoint Presentation:

Planning is based on forecast which are estimates about the future. When forecasts are inaccurate, plans became misleading. therefore plans may be dangerous. 77


REFERENCES Pharmaceutical Production Facilities Design and Applications Cole Graham c. Taylor & Francis e-Library, 2nd Edition, 2003, pp 25-30 Encyclopedia of pharmaceutical technology, James swarbrick , Informa Healthcare USA,3 rd edition, Vol-2,p.2875. Pharmaceutical Jurisprudence,7 th edition, Jani G.K. Atul prakashan ,2008-2009, p.102. Good design practices for GMP Pharmaceutical facilities, Terry Jacobs, Adrew A.singore, vol-146, p.41-42. Abha kumar, lesson-7,,p.92-105. Pharmaceutical Industrial management, Mehta R.M, 3 rd edition,pp 70-90. 78

PowerPoint Presentation:

Special Economic Zones in India by Jona Aravind Dohrmann ,Vishwanath Pratap Singh, former Prime of India, in: Frontline, 20 October 2006 79

PowerPoint Presentation:


authorStream Live Help