10 layout strategy

POM - J. GalvánPOM - J. Galván 11

PRODUCTION AND PRODUCTION AND OPERATIONS OPERATIONS

MANAGEMENTMANAGEMENT

Ch. 10: Layout StrategyCh. 10: Layout Strategy


Learning ObjectivesLearning Objectives

How to organize production elements How to organize production elements within facilities?within facilities?


Objectives of the Layout StrategyObjectives of the Layout Strategy

Develop an economical layout which Develop an economical layout which will meet the requirements of:will meet the requirements of:• product design and volume (product strategy)product design and volume (product strategy)• process equipment and capacity (process process equipment and capacity (process

strategy)strategy)• quality of work life (human resource strategy)quality of work life (human resource strategy)• building and site constraints (location building and site constraints (location

strategy)strategy)


What is Facility LayoutWhat is Facility Layout

Location or arrangement of Location or arrangement of everything within & around buildingseverything within & around buildings

Objectives are to maximizeObjectives are to maximize• Customer satisfaction Customer satisfaction • Utilization of space, equipment, & peopleUtilization of space, equipment, & people• Efficient flow of information, material, & Efficient flow of information, material, &

peoplepeople• Employee morale & safetyEmployee morale & safety


Proper layout enablesProper layout enables:: Higher utilization of space, equipment,and Higher utilization of space, equipment,and

peoplepeople Improved flow of information, materials, or Improved flow of information, materials, or

peoplepeople Improved employee morale and safer Improved employee morale and safer

working conditionsworking conditions Improved customer/client interactionImproved customer/client interaction FlexibilityFlexibility

Strategic Importance of LayoutStrategic Importance of Layout


Six Layout StrategiesSix Layout Strategies

Fixed-position layoutFixed-position layout• large bulky projects such as ships and buildingslarge bulky projects such as ships and buildings

Process-oriented layoutProcess-oriented layout• deals with low-volume, high-variety production deals with low-volume, high-variety production

(“job shop”, intermittent production)(“job shop”, intermittent production)

Office layoutOffice layout• positions workers, their equipment, and positions workers, their equipment, and

spaces/offices to provide for movement of spaces/offices to provide for movement of informationinformation


Six Layout Strategies - Six Layout Strategies - continuedcontinued

Retail/service layoutRetail/service layout• allocates shelf space and responds to allocates shelf space and responds to

customer behaviorcustomer behavior

Warehouse layoutWarehouse layout• addresses trade-offs between space and addresses trade-offs between space and

material handlingmaterial handling

Product-oriented layoutProduct-oriented layout• seeks the best personnel and machine use seeks the best personnel and machine use

in repetitive or continuous productionin repetitive or continuous production


Layout ExampleLayout Example


Requirements of a Good LayoutRequirements of a Good Layoutan understanding of capacity and space an understanding of capacity and space

requirementsrequirementsselection of appropriate material selection of appropriate material

handling equipmenthandling equipmentdecisions regarding environment and decisions regarding environment and

aestheticsaestheticsidentification and understanding of the identification and understanding of the

requirements for information flowrequirements for information flowidentification of the cost of moving identification of the cost of moving

between the various work areasbetween the various work areas


Constraints on Layout Constraints on Layout ObjectivesObjectives

Product design & volumeProduct design & volume Process equipment & capacityProcess equipment & capacity Quality of work lifeQuality of work life Building and site Building and site


Layout Strategies, Examples, Layout Strategies, Examples, and Criteriaand Criteria

Service/retail Drug storeGrocery storeDepartment store

Expose customer to highmargin items

Storage DistributorWarehouse

Minimize storage andhandling costs

Product oriented TV assembly line Minimize line imbalance,delay, and idle time

Layout strategy Example Criteria


Areas of Concern in Layout Areas of Concern in Layout StrategyStrategy

LayoutStrategy

MaterialFlow

Communication

WorkCell

Safety

RetailProductOriented

MaterialAttributes

Warehousing

ProcessOriented

ServiceAreas


Fixed-Position LayoutFixed-Position Layout

Design is for stationary project Design is for stationary project Workers and equipment come to siteWorkers and equipment come to site Complicating factorsComplicating factors

• Limited space at siteLimited space at site• Changing material needsChanging material needs


Factors Complicating a Fixed Factors Complicating a Fixed Position LayoutPosition Layout

There is limited space at virtually all There is limited space at virtually all sitessites

At different stages in the construction At different stages in the construction process, different materials are process, different materials are needed – therefore, different items needed – therefore, different items become critical as the project become critical as the project developsdevelops

The volume of materials needed is The volume of materials needed is dynamicdynamic


Process-Oriented LayoutProcess-Oriented Layout

Design places departments with Design places departments with large flows of material or people large flows of material or people togethertogether

Department areas having similar Department areas having similar processes located in close proximityprocesses located in close proximity• e.g., All x-ray machines in same areae.g., All x-ray machines in same area

Used with process-focused processesUsed with process-focused processes


Steps in Developing aSteps in Developing a Process-Oriented Layout Process-Oriented Layout

1.1. Construct a “from-to matrix”Construct a “from-to matrix”

2.2. Determine space requirements for each Determine space requirements for each departmentdepartment

3.3. Develop an initial schematic diagramDevelop an initial schematic diagram

4.4. Determine the cost of this layoutDetermine the cost of this layout

5.5. By trial-and-error (or more sophisticated By trial-and-error (or more sophisticated means), try to improve the initial layoutmeans), try to improve the initial layout

6.6. Prepare a detailed plan that evaluates Prepare a detailed plan that evaluates factors in addition to transportation factors in addition to transportation costcost


1 2 3 4 5 6

1

2

3

4

5

6

Interdepartmental Flow of PartsInterdepartmental Flow of Parts

50 100 0 0 20

30 50 10 0

20 0 100

50 0

0


Cellular Layout - Work CellsCellular Layout - Work Cells

Special case of product-oriented Special case of product-oriented layout - in what is ordinarily a process-layout - in what is ordinarily a process-oriented facilityoriented facility

Consists of Consists of differentdifferent machines machines brought together to make a productbrought together to make a product

Temporary arrangement onlyTemporary arrangement only Example: Assembly line set up to Example: Assembly line set up to

produce 3000 identical parts in a job produce 3000 identical parts in a job shopshop


Work Cells - Some AdvantagesWork Cells - Some Advantages Reduced work-in-process inventoryReduced work-in-process inventory Less floor space requiredLess floor space required Reduced raw material and finished goods Reduced raw material and finished goods

inventories requiredinventories required Reduced direct labor costsReduced direct labor costs Heightened sense of employee participationHeightened sense of employee participation Increased utilization of equipment machineryIncreased utilization of equipment machinery Reduced investment in machinery and equipmentReduced investment in machinery and equipment Note: Green & Sadowski report increased capital Note: Green & Sadowski report increased capital

investment and lower machine utilizationinvestment and lower machine utilization


Work Cell AdvantagesWork Cell Advantages

Inventory

Floor space

Direct labor costs

Equipment utilization

Employee participation

Quality


OfficeOffice

Tool RoomTool RoomWork CellWork Cell

SawsSaws DrillsDrills

Work Cell Floor PlanWork Cell Floor Plan


Requirements for Cellular Requirements for Cellular ProductionProduction

Identification of families of products -Identification of families of products -group technology codesgroup technology codes

High level of training and flexibility High level of training and flexibility on the part of the employeeson the part of the employees

Either staff support or flexible, Either staff support or flexible, imaginative employees to establish imaginative employees to establish the work cells initiallythe work cells initially


Work Cells, Focused Work Work Cells, Focused Work Centers and the Focused Centers and the Focused

FactoryFactoryWork Cell A temporary assembly-line-oriented

arrangement of machines and personnel in what is ordinarily a process-oriented facilityExample: job shop with rearranged machinery and personnel to produce 30 unique control panels

Focused WorkCenter

A permanent assembly-line-oriented arrangement of machines and personnel in what is ordinarily a process-oriented facilityExample: manufacturing of pipe brackets at a shipyard

Focused Factory A permanent facility to produce a product or component in a product-oriented facilityExample: a plant to produce window mechanisms for automobiles


Traditional Production Line… 6 peopleTraditional Production Line… 6 people


First pass work cell design… 3 peopleFirst pass work cell design… 3 people


Second try – work cell design – 1 personSecond try – work cell design – 1 person


Floor SpaceFloor SpaceReductionReduction

nearly 50%nearly 50%


Office LayoutOffice Layout

¨ Design positions people, equipment, & offices for maximum information flow

¨ Arranged by process or product¨ Example: Payroll dept. is by process

¨ Relationship chart used¨ Examples

¨ Insurance company¨ Software company


Office Layout Floor PlanOffice Layout Floor Plan

AccountingAccounting

ManagerManager Brand XBrand X

FinanceFinanceFin. Acct.


Relationship ChartRelationship Chart

1 PresidentO

2 Costing UA A

3 Engineering IO

4 President’s Secretary

1122

33

Ordinary Ordinary closeness: closeness: President (1) & President (1) & costing (2)costing (2)

Absolutely Absolutely necessary: necessary: President (1) & President (1) &

secretary (4)secretary (4)

44

I = Important

U = Unimportant


Retail/Service LayoutRetail/Service Layout

¨ Design maximizes product exposure to customers

¨ Decision variables¨ Store flow pattern¨ Allocation of (shelf) space to products

¨ Types¨ Grid design¨ Free-flow design

Video


Retail Layouts - Retail Layouts - Some Rules of ThumbSome Rules of Thumb

Locate high-draw items around the periphery of Locate high-draw items around the periphery of the storethe store

Use prominent locations such as the first or last Use prominent locations such as the first or last aisle for high-impulse and high margin itemsaisle for high-impulse and high margin items

Remove crossover aisles that allow customers Remove crossover aisles that allow customers the opportunity to move between aislesthe opportunity to move between aisles

Distribute what are known in the trade as “power Distribute what are known in the trade as “power items” (items that may dominate a shopping items” (items that may dominate a shopping

trip) to both sides of an aisle, and disperse trip) to both sides of an aisle, and disperse them to increase the viewing of other itemsthem to increase the viewing of other items

Use end aisle locations because they have a very Use end aisle locations because they have a very high exposure ratehigh exposure rate


Retail /Service Layout -Retail /Service Layout -Grid DesignGrid Design

OfficeOffice CartsCarts Check-Check-outout

Grocery StoreGrocery StoreMeatBread

Milk


Retail/Service Layout -Retail/Service Layout - Free-Flow Design Free-Flow Design

FeatureFeature

Display Display TableTable

Trans.Trans.CounterCounter

Apparel StoreApparel Store


Retail Store Shelf Space Retail Store Shelf Space PlanogramPlanogram

¨ Computerized tool for shelf-space management

¨ Generated from store’s scanner data on sales

¨ Often supplied by manufacturer

¨ Example: P&G2 ft.2 ft.

5 5 facingsfacings

VO

-5

VO

-5

VO

-5

SU

AV

E

SU

AV

E

VO

-5P

ER

T

PE

RT

PE

RT

PE

RT

PE

RT

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-5


Warehouse LayoutWarehouse Layout

¨ Design balances space (cube) utilization & handling cost

¨ Similar to process layout¨ Items moved between dock

& various storage areas¨ Optimum layout depends on

¨ Variety of items stored

¨ No. items picked


Warehouse Layout Floor PlanWarehouse Layout Floor Plan

ZonesZones

ConveyorConveyor

Order PickerOrder Picker

TruckTruck


Cross DockingCross Docking

¨ Transferring goods ¨ from incoming trucks at

receiving docks ¨ to outgoing trucks at

shipping docks¨ Avoids placing goods

into storage

In-In-comingcoming

OutgoingOutgoing

© 1984-1994 T/Maker Co.© 1995 Corel Corp.


Random Stocking Systems Random Stocking Systems Often:Often:

Maintain a list of “open” locationsMaintain a list of “open” locations Maintain accurate records of existing Maintain accurate records of existing

inventory and its locationsinventory and its locations Sequence items on orders to minimize travel Sequence items on orders to minimize travel

time required to pick orderstime required to pick orders Combine orders to reduce picking timeCombine orders to reduce picking time Assign certain items or classes of items, such Assign certain items or classes of items, such

as high usage items, to particular warehouse as high usage items, to particular warehouse areas so that distance traveled is minimizedareas so that distance traveled is minimized


Warehouse and Storage Layout Warehouse and Storage Layout - General Cost Curve- General Cost Curve

Warehouse DensityHighLow

Low

High

Co

st

The best warehouselayout is where totalcosts are at a minimum

Material handling cost(mostly variable)Costs include: Equipment Damage Position & find Investment

Material storage cost(mostly fixed)Costs include: Land & building Building & insurance


Product-Oriented LayoutProduct-Oriented Layout

Facility organized around productFacility organized around product Design minimizes line imbalanceDesign minimizes line imbalance

• Delay between work stationsDelay between work stations Types: Fabrication line; assembly lineTypes: Fabrication line; assembly line


Product-Oriented RequirementsProduct-Oriented Requirements

Standardized productStandardized product High production volumeHigh production volume Stable production quantitiesStable production quantities Uniform quality of raw materials & Uniform quality of raw materials &

componentscomponents


Product-Oriented Layout - Product-Oriented Layout - AssumptionsAssumptions

Volume is adequate for high equipment Volume is adequate for high equipment utilizationutilization

Product demand is stable enough to justify Product demand is stable enough to justify high investment in specialized equipmenthigh investment in specialized equipment

Product is standardized or approaching a Product is standardized or approaching a phase of its life cycle that justifies investment phase of its life cycle that justifies investment in specialized equipmentin specialized equipment

Supplies of raw materials and components Supplies of raw materials and components are adequate and of uniform quality ensure are adequate and of uniform quality ensure they will work with specialized equipmentthey will work with specialized equipment


Product-Oriented Layout TypesProduct-Oriented Layout Types

¨ Assembles fabricated parts¨ Uses workstation¨ Repetitive process¨ Paced by tasks¨ Balanced by moving tasks

¨ Builds components

¨ Uses series of machines

¨ Repetitive process

¨ Machine paced

¨ Balanced by physical redesign

Fabrication Line Assembly Line


Product-Oriented Layout Product-Oriented Layout AdvantagesAdvantages

¨ Lower variable cost per unit

¨ Lower material handling costs

¨ Lower work-in-process inventories

¨ Easier training & supervision


Product-Oriented Layout Product-Oriented Layout DisadvantagesDisadvantages

¨ Higher capital investment

¨ Special equipment

¨ Any work stoppage stops whole process

¨ Lack of flexibility¨ Volume¨ Product


Product-Oriented Floor PlanProduct-Oriented Floor Plan

1 3

2

4

5

WorkWork

OfficeOffice

Belt ConveyorBelt Conveyor

Work Work StationStation

Note: 5 tasks or operations; 3 work stationsNote: 5 tasks or operations; 3 work stations

Work StationWork Station

StationStation


Assembly Line BalancingAssembly Line BalancingThe General ProcedureThe General Procedure

Determine cycle time by taking the demand Determine cycle time by taking the demand (or production rate) per day (or production rate) per day and dividing and dividing it into the productive time available per dayit into the productive time available per day

Calculate the theoretical minimum number of Calculate the theoretical minimum number of work stations by dividing total task time by work stations by dividing total task time by cycle timecycle time

Perform the line balance and assign specific Perform the line balance and assign specific assembly tasks to each work stationassembly tasks to each work station


Assembly Line BalancingAssembly Line Balancing

Analysis of production linesAnalysis of production lines Nearly equally divides work between Nearly equally divides work between

workstations while meeting required workstations while meeting required outputoutput

ObjectivesObjectives• Maximize efficiencyMaximize efficiency• Minimize number of Minimize number of

work stationswork stations


Assembly Line Balancing StepsAssembly Line Balancing Steps

1.1. Determine tasks (operations)Determine tasks (operations)2.2. Determine sequenceDetermine sequence3.3. Draw precedence diagramDraw precedence diagram4.4. Estimate task timesEstimate task times5.5. Calculate cycle time Calculate cycle time 6.6. Calculate number of work stationsCalculate number of work stations7.7. Assign tasks Assign tasks 8.8. Calculate efficiencyCalculate efficiency


A B

E H

C

D

F G I

10 Min.10 Min. 55

1111

1212

33 77 33

44

1111

Precedence Diagram ExamplePrecedence Diagram Example


Assembly Line Balancing Assembly Line Balancing EquationsEquations

Cycle time Production time available Demand per day

Min # WSTask times

Cycle time

EfficiencyTask times

(Actual #ws) * (Cycle time)


Layout Heuristics for Assigning Layout Heuristics for Assigning Tasks in Assembly Line Tasks in Assembly Line

BalancingBalancing Longest task time - choose task with longest Longest task time - choose task with longest

operation timeoperation time Most following tasks - choose task with Most following tasks - choose task with

largest number of following taskslargest number of following tasks Ranked positional weight - choose task Ranked positional weight - choose task

where the sum of the times for each following where the sum of the times for each following task is longesttask is longest

Shortest task time - choose task with shortest Shortest task time - choose task with shortest operation timeoperation time

Least number of following tasks - choose task Least number of following tasks - choose task with fewest subsequent taskswith fewest subsequent tasks

10 layout strategy

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