Reorganising plant layout

• Overall


  Definition: when new technology or systems are adopted

  Plant refers to the facilities where the machinery is arranged → typically organised around the needs of the goods and the transformation processes required to create these goods

  Reduced productivity and higher costs → because production needs to be stopped until restructuring is complete

  Structuring costs e.g transporting, installing, testing of new equipment, machinery and technology
• How is it a financial cost?


  Major changes such as re-engineering systems require expensive reorganisation and therefore incur high costs

  Costs also incurred in the downtime when transferring from the old machinery to the new

  Loss in productivity arisen from staff orienting themselves with changes processes and systems also incur costs