Facility Capacity & Layout Planning

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Need for Facility Capacity Planning

To find the optimal capacity of the facility so that the total of costs of under-capacity and over-capacity is the minimum

To satisfy the future demand of products without any shortages

Need for Facility Capacity Planning

To keep the initial investment in the facility as low as possible to achieve lesser break-even volume

Investments in facility capacity are long-term and cannot be reversed easily over the period of time

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Types of Capacity
Design capacity represents the maximum rate of output that can be achieved under ideal conditions. Effective capacity is the maximum rate of output which can be practically achieved under the constraints of time consumed in set-ups, oiling & cleaning, defective items, etc. Effective capacity is always lesser than the design capacity. Actual capacity is the maximum output rate which is actually achieved under the constraints of machine breakdowns, labor inefficiencies & absenteeism, defective products, late deliveries of materials by the supplier, and so on. Actual capacity can be equal to or less than the effective capacity.
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Ways of Increasing Effective Capacity

Proper process quality control so that there are less defective items requiring rework Proper facility location, layout, and internal working conditions Good training, high motivation, less absenteeism & high turnover on part of workers

By making products & services as uniform Good coordination with suppliers as possible in design for timely & defect-free supplies so that number of and proper scheduling of products set-ups required are on machines less (batch sizes will By properly following the be large) environmental and pollution norms, which results in lesser inspections by government enforcement agencies and, thus, lesser disruption of production activities Oxford University Press 2007. All rights reserved. 4

Ways of Increasing Effective Capacity

Trends in Demand Forecasts

Demand forecast

Growth trend

Demand forecast

Decline trend

Time

Time

Demand forecast Cyclical trend

Demand forecast

Stable trend

Time

Time Products A & B

Demand forecast

Product B

Product A Time

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Optimal Capacity Determination

Average cost per unit of the product

Optimal output rate

Output rate

Part a
Average cost per unit of the product
Small-sized Plant Mediumsized Plant Large-sized Plant

Output rate

Part b

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Types of Layouts
Product Layout Process Layout Fixed-Position Layout Cellular Layout

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An Assembly Line (Product Layout)

Racks containing headlight sub-assembly

Workstation 1

Racks containing backlight sub-assembly Workstation 2

Racks containing steering wheels sub-assembly

Workstation 3

Car 1

Car 2

Car 3

Conveyor

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Advantages & Disadvantages of Product Layout

A high output rate and, thus, low cost of item per unit High efficiency of labor & equipment

Lesser supervision & labor training costs (as labor is trained only for a specialized task)

Easier material handling and lesser inventory costs

Advantages Product Layout Disadvantages

No need of routing or scheduling once the line is operational (as it is already done during the design of the line)

Maintenance cost is fairly high to ensure smooth running of the line

Monotonous repetitive tasks lead to frustration on part of workers

Inflexible to design changes in products or processes (the changes in line are usually expensive)

Breakdown of a machine or high absenteeism of workers leads to halt in production

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A U-shaped Assembly Line

1
The entry & exit points are nearby

3 4

A single worker

5 8 7 6

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Process Layout of an Automobile Service Station

Final Inspection

Underbody Repairs

Engine Repairs

Paint Booth

Car washing & cleaning

Office Dents Repair

Spare Parts Store

Oil Replacement

Wheel Alignment

Electrical Repairs

Interiors, Door Repairs, etc.

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Advantages & Disadvantages of Process Layout

Work-In-Process (WIP) Inventory is usually high in batch processing Material handling is time consuming as no fixed route is there

A low output rate and, thus, high cost of item per unit

Routing & scheduling is tedious and time consuming for different products High cost of supervision because of special treatment to every product to be processed

Disadvantages Process Layout Advantages

Maintenance cost is low because of low cost general purpose machines

The system promotes creativity on part of workers due to variety of tasks performed by them

The system is flexible to design changes in products or processes in comparison to product layout

Breakdown of a machine does not lead to halt in production as substitute machines are kept ready for such situations

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Schematic Diagram to show Fixed-position Layout of a Space Shuttle

Raw Materials

Computer Experts

Equipments

Assemblies

Technicians

Fuel

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111 3333

Lathe Machines

2222

3333

Fitting shop

2222

Paint Shop

111 2222

1 2 2 2 2222 4444 Foundry 4444 1 1

1 1 1

3 3 3

1 1 1 3333 4444 1 1 1 Welding Shop 3333 4444

Drilling Machines

Process Layout of a Factory

Manufacturing Cell 1 111 Lathe Drilling Fitting Welding Paint 111

Manufacturing Cell 2 2222222222 Foundry Lathe Fitting Paint 2222

Manufacturing Cell 3

3333333333

Lathe

Fitting

Drilling

Welding

3333

Manufacturing Cell 4 444444444444444444444 Foundry Drilling Welding 4444

Cellular Layout

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The End

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