Layout Strategy

Layout Design ENGR. JESSIE RADAZA TUTORPRODUCTION AND OPERATIONS MANAGEMENTOutline:Strategic Importance of Layout DesignsProcess LayoutProduct LayoutGroup Technology LayoutFixed Position LayoutOffice LayoutRetail Store LayoutWarehousing and Storage LayoutProduct Oriented Layout

Innovations @ McDonaldsIndoor Seating (1950s)Drive Thru Window (1970s)Adding Breakfast to the Menu ( 1980s)Adding Play Areas(1990s)New Kitchen Layout

New Kitchen Layout

McDonalds New Kitchen Layout Design

What is Layout Design?Location or arrangement of everything within & around buildingsObjectives are to maximizeCustomer satisfaction Utilization of space, equipment, & peopleEfficient flow of information, material, & peopleEmployee morale & safety6In addition to discussing what facility layout is, you might also raise some of the issues that may make it problematic.Strategic Importance of Layout DesignThe Objective of Layout Strategy is to develop and economic layout that will meet the firms competitive requirements7In addition to discussing what facility layout is, you might also raise some of the issues that may make it problematic. Layout Design ConsiderationsHigher utilization of space, equipment,and peopleImproved flow of information, materials, or peopleImproved employee morale and safer working conditionsImproved customer/client interactionFlexibility

8May be useful here to present a brief discussion of each benefit.Requirements of a Good LayoutAn understanding of capacity and space requirementsSelection of appropriate material handling equipmentDecisions regarding environment and aestheticsIdentification and understanding of the requirements for information flowIdentification of the cost of moving between the various work areas9Students should be asked if they perceive the relative importance of these requirements to be changing with the increased use of automated information technology.Process-Oriented LayoutLike Machines and Equipment's are grouped togetherFlexible and Capable of handling wide variety of products and servicesUsed with process-focused processesMaterial handling and labor costs can be high.10Having discussed each of these constraints in turn, you might ask students what other constraints they might expect to find in a practical situation.

Process-Oriented Layout11Having discussed each of these constraints in turn, you might ask students what other constraints they might expect to find in a practical situation.

Process-Oriented Layout(continuation.)12Having discussed each of these constraints in turn, you might ask students what other constraints they might expect to find in a practical situation.Product-Oriented LayoutFacility organized around productDesign minimizes line imbalanceDelay between work stationsTypes: Fabrication line; assembly line13Students should be asked to suggest the conditions under which a product-oriented layout is most appropriate.Product-Oriented RequirementsStandardized productHigh production volumeStable production quantitiesUniform quality of raw materials & components14Some answers to the previous question.Product-Oriented Layout - AssumptionsVolume is adequate for high equipment utilizationProduct demand is stable enough to justify high investment in specialized equipmentProduct is standardized or approaching a phase of its life cycle that justifies investment in specialized equipmentSupplies of raw materials and components are adequate and of uniform quality to ensure they will work with specialized equipment15Having discussed the individual assumptions, one should then turn to the question of what is adequate, or enough, i.e., how does one go about making these decisions.Product-Oriented Layout TypesAssembles fabricated partsUses workstationsRepetitive processPaced by tasksBalanced by moving tasksBuilds componentsUses series of machinesRepetitive processMachine pacedBalanced by physical redesignFabrication LineAssembly Line16Product Layout AdvantagesLower variable cost per unitLower material handling costsLower work-in-process inventoriesEasier training & supervisionRapid throughput

17Product Layout DisadvantagesHigher capital investment Special equipmentAny work stoppage stops whole processLack of flexibilityVolumeProduct18Group Technology Layout( Hybrid Layout)Combining the efficiency of a product layout with the flexibility of a process layout19Three Aspects of Group Technology Layout:

1. Grouping parts into families

Objectives: Reducing the changeover time between batches, allowing smaller batch sizes and thus improve flexibility.

2. Group physical facilitiess into cells to reduce transportation time between processes.

Objectives: Reducing the changeover time between batches, allowing smaller batch sizes and thus improve flexibility.

20Six Layout StrategiesFixed-position layoutlarge bulky projects such as ships and buildingsProcess-oriented layoutdeals with low-volume, high-variety production (job shop, intermittent production)Office layoutpositions workers, their equipment, and spaces/offices to provide for movement of information21Six Layout Strategies - continuedRetail/service layoutallocates shelf space and responds to customer behaviorWarehouse layoutaddresses trade-offs between space and material handlingProduct-oriented layoutseeks the best personnel and machine use in repetitive or continuous production22Fixed-Position LayoutDesign is for stationary project Workers and equipment come to siteComplicating factorsLimited space at siteChanging material needs23Students should be able to supply examples of the use of this layout strategy.Factors Complicating a Fixed Position LayoutThere is limited space at virtually all sitesAt different stages in the construction process, different materials are needed therefore, different items become critical as the project developsThe volume of materials needed is dynamic24Students should be asked to suggest additional limitations or complications related to the fixed-positions layoutProcess-Oriented LayoutDesign places departments with large flows of material or people togetherDepartment areas having similar processes located in close proximitye.g., All x-ray machines in same areaUsed with process-focused processes25Students should be asked to suggest why this is not our standard layout - at least where the product is movable or transportable.Emergency Room LayoutSurgeryRadiologyE.R. bedsPharmacyBilling/exitE.R.Triage roomE.R. AdmissionsPatient B - erratic pacemakerPatient A - broken legHallway26Students may be asked to evaluate alternative layouts for an emergency room. Perhaps a visit to view a local emergency room might be helpful.Steps in Developing a Process-Oriented LayoutConstruct a from-to matrixDetermine space requirements for each departmentDevelop an initial schematic diagramDetermine the cost of this layoutBy trial-and-error (or more sophisticated means), try to improve the initial layoutPrepare a detailed plan that evaluates factors in addition to transportation cost27The criterion for this methodology is basically a number-of-parts (or people)-times-distance measure. Is this always useful or appropriate?Cost of Process-Oriented Layout

28Now that cost can be determined, ask students (1) whether this is an appropriate criteria, and (2) how they would go about minimizing cost.Interdepartmental Flow of Parts1234561234565010000203050100200100500029Note that the matrix above basically measures the flow between sites, direction is immaterial. We can also develop entries for the remainder of the matrix if a different cost or route applies depending upon whether one is coming or going.Number of Weekly Loads1005030102050201005012345630Possible Layout 1AssemblyDepartment(1)PaintingDepartment (2)Machine ShopDepartment (3)ReceivingDepartment(4)ShippingDepartment (5)TestingDepartment (6)Room 1Room 2Room 3Room 4Room 5Room 6604031Number of Weekly Loads1005030102050201005012345632Possible Layout 2PaintingDepartment(2)AssemblyDepartment (1)Machine ShopDepartment (3)ReceivingDepartment(4)ShippingDepartment (5)TestingDepartment (6)Room 1Room 2Room 3Room 4Room 5Room 6604033Computer Programs for LayoutCRAFTSPACECRAFTCRAFT 3-DMULTIPLECORELAPALDEPCOFADFADES - expert system34It is probably useful to note that these programs operate on the basis of heuristics - and do not necessarily produce the optimal answer.Out-Patient Hospital ExampleCRAFTAAAABBAAAABBDDDDDDCCDDDDFFFFFDEEEEEDDDDDBBDDDDBBDDDEEECCDEEFAAAAAFAAAFFF1 2 3 4 5 61 2 3 4 5 6123456

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Total cost: 20,100Est. Cost Reduction .00Iteration 0Total cost: 14,390Est. Cost Reduction 70.Iteration 3Legend:A = xray/MRI roomsB = laboratoriesC = admissionsD = exam roomsE = operating roomsF = recovery roomsCellular Layout - Work CellsSpecial case of product-oriented layout - in what is ordinarily a process-oriented facilityConsists of different machines brought together to make a productTemporary arrangement onlyExample: Assembly line set up to produce 3000 identical parts in a job shop36Students should be asked to comment upon the technology required to implement the concept of work cells. Under what conditions is such a cellular arrangement possible?Improving Layouts by Moving to the Work Cell Concept

37Work Cells - Some AdvantagesReduced work-in-process inventoryLess floor space requiredReduced raw material and finished goods inventories requiredReduced direct labor costsHeightened sense of employee participationIncreased utilization of equipment machineryReduced investment in machinery and equipment38Students should be reminded here to consider both the advantages and the disadvantages. They might also be asked to consider why this approach might require a larger capital investment and result in a lower machine utilization than other approaches (Green and Sadowski).Work Cell AdvantagesInventoryFloor spaceDirect labor costsEquipment utilizationEmployee participationQuality39Work Cell Floor Plan

OfficeTool RoomWork CellSawsDrills40Requirements for Cellular ProductionIdentification of families of products - group technology codesHigh level of training and flexibility on the part of the employeesEither staff support or flexible, imaginative employees to establish the work cells initiallyTest (poka-yoke) at each station in the cell41Students should be asked to consider if worker union activities have an impact on the organizations ability to use cellular production.Work Cells, etc.Work CellA 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 panelsFocused WorkCenterA permanent assembly-line-oriented arrangement of machines and personnel in what is ordinarily a process-oriented facilityExample: manufacturing of pipe brackets at a shipyardFocused FactoryA permanent facility to produce a product or component in a product-oriented facilityExample: a plant to produce window mechanisms for automobiles42Number of Product Lines and Operating Performance-5051015 D(6) J(1) I(2) G(1) H(2) K(2)More focusedplants E(4) A(6) F(6) C(5) B(5)Less focusedplantsSales ($M)10043The more focused the plant, the larger the number of product lines for equivalent sales performance.Office LayoutDesign positions people, equipment, & offices for maximum information flowArranged by process or productExample: Payroll dept. is by processRelationship chart usedExamplesInsurance companySoftware company44Office Layout Floor Plan

AccountingManagerBrand XFinanceFin.Acct.45This slide could be used to initiate a discussion of layout designed around product flow as opposed to layout designed around information flow.Retail/Service LayoutDesign maximizes product exposure to customersDecision variablesStore flow patternAllocation of (shelf) space to products TypesGrid designFree-flow design46Students should be asked for examples of features they find common to the design of retail layouts with which they are familiar.Retail Layouts - Rules of ThumbLocate high-draw items around the periphery of the storeUse prominent locations such as the first or last aisle for high-impulse and high margin itemsRemove crossover aisles that allow customers the opportunity to move between aislesDistribute what are known in the trade as power items (items that may dominate a shopping trip) to both sides of an aisle, and disperse them to increase the viewing of other itemsUse end aisle locations because they have a very high exposure rate47Students can be asked to provide examples of instances in which these rules were implemented.Retail/Service Layout Grid Design

OfficeCartsCheck-outGrocery StoreMeatBreadMilkProduceFrozen Foods48Retail/Service Layout - Free-Flow Design

FeatureDisplay TableTrans.CounterApparel Store49Retail Store Shelf Space Planogram

Computerized tool for shelf-space managementGenerated from stores scanner data on salesOften supplied by manufacturerExample: P&G

2 ft.5 facings

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VO-550A Good Service Layout (Servicescape) ConsidersAmbient conditions - background characteristics such as lighting, sound, smell, and temperature.Spatial layout and functionality - which involve customer circulation path planningSigns, Symbols, and Artifacts - characteristics of building design that carry social significance51Warehouse LayoutDesign balances space (cube) utilization & handling costSimilar to process layoutItems moved between dock & various storage areasOptimum layout depends onVariety of items storedNumber of items picked

52Warehouse Layout Floor PlanZonesConveyorTruckOrder Picker53Cross DockingTransferring goods from incoming trucks at receiving docks to outgoing trucks at shipping docksAvoids placing goods into storageRequires suppliers provide effective addressing (bar codes) and packaging that provides for rapid transhipment

In-comingOutgoing 1984-1994 T/Maker Co. 1995 Corel Corp.

54Random Stocking Systems Often:Maintain a list of open locationsMaintain accurate records of existing inventory and its locationsSequence items on orders to minimize travel time required to pick ordersCombine orders to reduce picking timeAssign certain items or classes of items, such as high usage items, to particular warehouse areas so that distance traveled is minimized55Some of the options to be considered when developing a random stocking systemProduct-Oriented LayoutFacility organized around productDesign minimizes line imbalanceDelay between work stationsTypes: Fabrication line; assembly line56Students should be asked to suggest the conditions under which a product-oriented layout is most appropriate.Product-Oriented RequirementsStandardized productHigh production volumeStable production quantitiesUniform quality of raw materials & components57Some answers to the previous question.Product-Oriented Layout - AssumptionsVolume is adequate for high equipment utilizationProduct demand is stable enough to justify high investment in specialized equipmentProduct is standardized or approaching a phase of its life cycle that justifies investment in specialized equipmentSupplies of raw materials and components are adequate and of uniform quality to ensure they will work with specialized equipment58Having discussed the individual assumptions, one should then turn to the question of what is adequate, or enough, i.e., how does one go about making these decisions.Product-Oriented Layout TypesAssembles fabricated partsUses workstationsRepetitive processPaced by tasksBalanced by moving tasksBuilds componentsUses series of machinesRepetitive processMachine pacedBalanced by physical redesignFabrication LineAssembly Line59Product Layout AdvantagesLower variable cost per unitLower material handling costsLower work-in-process inventoriesEasier training & supervisionRapid throughput

60Product Layout DisadvantagesHigher capital investment Special equipmentAny work stoppage stops whole processLack of flexibilityVolumeProduct61An Assembly Line Layout

62Assembly Line Types

Repetitive Layout13245WorkOfficeBelt ConveyorWork StationNote: 5 tasks or operations; 3 work stationsWork StationStation64Assembly Line BalancingAnalysis of production linesNearly equally divides work between workstations while meeting required outputObjectivesMaximize efficiencyMinimize number of work stations65Assembly Line BalancingThe General ProcedureDetermine cycle time by taking the demand (or production rate) per day and dividing it into the productive time available per dayCalculate the theoretical minimum number of work stations by dividing total task time by cycle timePerform the line balance and assign specific assembly tasks to each work station66Students should be aware that it is best to run balanced assembly lines - if they are not, then the need for balancing should be covered before discussing the process.Assembly Line Balancing Steps1.Determine tasks (operations)2.Determine sequence3.Draw precedence diagram4.Estimate task times5.Calculate cycle time 6.Calculate number of work stations7.Assign tasks 8.Calculate efficiency67Students should be walked through an example in class. One of the most useful examples is typically the student registration system. Students are familiar with it, they are able to estimate task time, and they are certainly impacted by the overall process,Assembly Line Balancing JargonTask an element of work on the product lineWorkstation a physical location where a particular set of tasks is performedProduct Line much like a moving conveyor that passes a series of workstations in a uniform time interval:Cycle Time the time between successive units coming off the end of the lineAssembly Line Balancing EquationsCycle time = Production time available Demand per dayMinimum number of work stations Task timesCycle timeEfficiency == Task times* (Cycle time)(Actual number of work stations)69Heuristics for Assigning Tasks in Assembly Line BalancingLongest task time - choose task with longest operation timeMost following tasks - choose task with largest number of following tasksRanked positional weight - choose task where the sum of the times for each following task is longestShortest task time - choose task with shortest operation timeLeast number of following tasks - choose task with fewest subsequent tasks70Line Balancing Example #1TaskPredecessorSecondsA-60BA80C-30DC40EB, D30F-50GF100HD, G70IE, H30Line Balancing Example #1 (cont.)Assuming: Demand of 160 units per dayOperating time of 8 hours per dayCompute (using longest task time):Cycle timeTheoretical minimum number of workstationsAssignment of tasks to workstationsEfficiency of the lineLine Balancing Example #2TaskPredecessorSecondsA-60BA80C-30DC40EB, D30F-50GF100HD, G70IE, H30Line Balancing Example #2 (cont.)Assuming: Demand is unknownOperating time of 8 hours per dayCompute (using most following tasks):Cycle timeTheoretical minimum number of workstationsAssignment of tasks to workstationsEfficiency of the lineReferences:Operations Management, Albert Porter