Facilities are the physical elements needed to produce a product or provide a service. Some companies have facilities located all over the world. Facilities include factory buildings, warehouses, land, offices, machinery, equipment, and trucks. When managers plan the facilities for a product or service, they must consider the location of the facilities. If you were making computers, you would want to be close to sources of your computer components. You would also want to be close to major interstate highways and airports so you could ship your products easily. If you were a real estate agent, on the other hand, you would probably want an office near an urban area. You also would want your facility to include parking for your customers so that if would be convenient for them to come to your office.
Once a location has been selected, managers then plan the layout of the facilities. How will the product move through the plant as it goes through the production process? Where will raw materials be stored? How will trucks pick up the finished product? Where will the business offices be located? Some companies have corporate headquarters that are separate from their manufacturing plants. Others house the plant and business offices in the same building.
Layout will differ depending on what production process the company uses and what it is producing. A plant with an assembly line that puts together a product will have a different layout from a plant where each worker assembles a product at a separate workstation. A service layout is usually different from a production layout. A cement-producing factory needs large open areas, conveyor belts, and loading platforms. A hair salon requires workstations equipped with chairs, mirrors, and electrical outlets.