Factory Extensions for Diverse Reasons - Article Example

Factory extensions Factory extensions Over the years many companies have been forced to extend their facilities for diverse reasons. As a matter of fact, most researchers note that the reasons behind factory extensions are not universal. According to him, while one factory may be extended to meet increased production demand, another may be extended to accommodate new line of production while another extension may simply be meant to improve flow of operations. However, there is widespread agreement that all extensions must be in line corporate strategies and economically viable. Sadly tough, not much research has been done in relation to this area. The few available have however broadly covered the area with emphasis on the motivators and constraints. Eliot (2006) focused on an extension case study where Shimizu, a Japanese motor component manufacturer sought to looking to consolidate its operations and decided to invest in a 19000 square ft. building extension to the existing factory. This move was meant to avoid renewal of a lease on a building rented in a town lying 15 miles away. According to Fridah (2007), the major constraints encountered included funding considerations and time limit. The reason was however evident; the company not only intended to consolidate its operations but also sought independence of its facilities. In contrast, Gerald (2009) notes that most factory extension decisions are made wen funds are already available and hence funding is never a constraints. This position is however disputed in Kelly (2010) who had earlier reported that cost-benefit analysis is a critical component of factory making decisions. Gerald (2009) however raises a new perspective to factory extensions. According to him, modern manufacturers are caught in a quagmire as to the best approach to factory extensions. This raises the debate of onsite vs. offsite extension works. The research further notes that choice of the best approach in factory extensions is often pegged on the need to continue operations and level of impact of onsite manufacturing. More often than not, offsite manufacturing, also known as modular manufacturing is preferred in instances where emphasis is on ensuring minimal or no impact is desired within the existing facilities or in instances where the company’s facilities is stretched and hence no room for intensive construction works. However, more and more corporations are adopting modular construction over onsite manufacturing in construction of factory extensions. Oicho (2011) reported that benefits of modular construction in factory extensions can be quantified using comparative analysis of chosen buildings. In a 2011 survey conducted by McGraw Hill Construction involving architects, engineers, contractors, and owners of buildings, it was established that completion speed, quality, and safety can largely be increased through modular manufacturing and further emphasized that these are key ingredients in factory extensions decision making. Additionally, another study noted that through this construction approach, overall costs, material waste, and environmental impact can be marginally reduced (Bernstein, Gudgel, & Laquidara-Carr, 2011, 39-47). Nonetheless, Fridah (2007) conducted a research based on multiple factory extensions across the globe and reported that up to 70% of extensions are as a result of either the need to increase production, diversify operations or increase specialization. According to the research, 32% of the considered extension cases were done to increase the respective company’s output capacity while 18% were meant to allow the company to venture in new production lines through production of new products which required new production lines or called for modification of the existing lines to match the need for new products to be produced. For instance, most sugar companies had in the recent past expanded their facilities to allow processing of the molasses by-products and hence generate more income. On the other hand, 20% of the extension cases reviewed was for companies that intended to increase specialization with its premises. Such companies expanded their facilities to allow allocation of specific specialization centers. Most companies observed to conduct such extensions shifted from line production lines to cell-based manufacturing. However, in Eliot (2006) another reason for factory extensions is cited as the need to improve work conditions. According to Eliot (2006), safety is often the main reason behind such extensions. Conventionally, a congested work environment is more prone to accidents compared to non-congested work environment. Consequently, a number of factories undertake expansion projects to reduce congestion and hence create room for safe working environments. While some companies have willingly undertook such expansions, quite a number prefer to work in congested environment rather than spend on expansions, safe for instances where they are compelled by existing legislations or recommendations made by inspection teams. Other than the need for safe work environments and reducing congestion, quite a number of companies undertake expansions to meet the needs of new technologies. Over the years, technology has undergone rapid and dynamic evolution. As a result, companies are forced to make changes from time to time in order to accommodate the emerging technological solutions in order to remain competitive. Nonetheless, more often than not, emerging technologies require lesser spaces as compared to the passing technologies. Most companies however prefer to incorporate new technologies into existing operations rather fully replacing the existing ones. Consequently, there is often a need for more spaces in order to accommodate the new technologies. In essence, there is widespread agreement between researchers that factory extensions are largely motivated by the need to increase production, need for specialization, need for product diversification and the need for increased safety. Researchers also agree that such extensions constrained by availability of space, for expansion, financial obligations, perceived benefits, and alignment to company objectives. As a matter of fact, Ochieng (2013) emphasizes that extensions can only be valid in instances where such an extension furthers the objectives of the company. The need for expansions is nonetheless not a thing that is due to end soon. Rather, it is expected that companies continue to grow, more and more companies will seek to expand their operations through factory expansions and hence create an enabling production environment that will help increase their profits. It is therefore time that this area of study receive extensive and well-0deserved research. References Eliot, J. (2006). Can expanding facilities help improve the physical work conditions? Manufacturing Journal, 123 (12), pp. 431- 442. Fridah, J. (2007). Understanding the dynamics of facility expansion. Production Newsletter, 24 (4), pp. 13-14 Gerald, P. (2009). Factors motivating company expansions. Production Newsletter, 25 (2), 12 -13. Kelly, W. (2010). The importance of cost-benefit analysis if factory extension decisions. Lean Production, 14 (5), pp. 231 – 239. McGraw Hill. (2011). Improving production environments. London: McGraw Hill. Ochieng, C. (2013). Increasing productivity through factory extensions. African companies journal, 12 (3), pp. 234-241. Oicho, S (2011). Modular vs. on-site construction in factory expansion. Construction Journal, 14 (24), pp. 156 – 161. Read More