MS1506Managingoperationsandprocesses

Layout and location See Greasley chapters 45

Layout
Layout is the physical arrangement of transforming resources at a particular location Deciding where to place machine, equipment and staff Objectives Minimise materials handling and movement of people Reduce hazards of handling Give logical flow to materials Use space efficiently Reduce time for operations Four basic layout types Fixed position, functional (or process), cell, product
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Layoutdecisions
Decision 1
Volume and variety

Process type Decision 2

Project Jobbing Batch Mass Continuous

Professional service Service shop Mass service

Strategic objectives

Basic layout type Decision 3 Detailed design of layout Flow of transformed resources

Fixed position Cell Functional Product

Physical positioning of transforming resources

Fixedpositionlayout
Product or project stationary Workers, materials and equipment moved as needed Examples Large construction projects: houses, roads, ships, aircraft Open heart surgery Restaurants (service element) Home help services Design issues Each site need areas allocated for materials and equipment Difficult to minimise movement of transforming resources

Fixedpositionexample
Layout design is largely limited to allocating space for staff and equipment How do we arrange transforming resources here?

Functional(orprocess)layout
Emphasis on convenient location of transforming resources Often these are large and difficult to move Transformed resources moved to transforming resources Examples Hospital: XRay, mri, are in fixed location; patients moved Supermarket: frozen products located together Components manufacture: parts moved through separate job shops Design issues Ideally keep total movement between different areas small

Functionallayout

Functionallayout
Lathes Milling B B A Grinding A A B Assembly B Shipping and receiving Polishing A B Drilling

Productlayout
Emphasis on arranging transforming resources for conveni ence of transformed resources Sometimes called line layout tends to create assembly lines Transformed resources moved through transforming resources Examples Car assembly lines Selfservice restaurants Design issues Manage timing so that flow is not slowed substantially by spe cific processes

Productlayout

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Celllayout
Compromise between functional and product layout Transforming resources grouped into cells (group technology) Cells arranged in functional layout Within cells, product (or sometimes functional) layout Examples Maternity unit in hospital: cells for prenatal, birth and post natal services Some component manufacture: cells for assembly and pack aging of components Design issues Choice of cells, product and functional layout issues

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Celllayout:visionexpress
Eye Tests Preliminary checks

Laboratories

Reception Desk

Waiting Area

Spectacles collection Consultation on frames

Entrance
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Mixedlayout
Commonly operations use mixed layout types incorporating features of other layouts For example a hospital may use features of fixed position layout in surgery, functional layout for XRay, mri, and cell layout for maternity facilities A house builder may use fixed position layout for the main con struction activities, but may also have functional layout build ing prefabricated units, which are then brought to site

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Comparisonoflayouts
advantages disadvantages Very high mix and product flexibVery high unit costs. Can be dif Fixedposition ility. High variety of tasks. ficult to schedule space and activ Product/customer not disturbed.ities. High product and mix flexibility. Low utilisation. Can have high functional Less prone to disruptions. Easy work-in-progress. Complex flow. to supervise. May be costly to introduce (re Often good compromise between cost and flexibility. Fast arrange existing layout). May cell throughput. Group work can be need more equipment. motivating. Low unit costs for high volume. Often low mix flexibility. Disrup product Opportunities for specialisation. tion of one process affects whole operation. Repetitive work.

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Selectingalayout:volume,variety,flow
intermittent flow high variety low low volume high regular flow easier to achieve continuous flow

fixed position functional cell product

Regular flow more important

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Selectingalayout:processtypes
manufacturing process types project jobbing functional layout service shops batch mass mass services continuous product layout cell layout layout types fixed position layout service process types professional services

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Detaileddesign:functionallayout
Steps in Developing a functional layout 0. Construct a fromto matrix 1. Determine space requirements for each department 2. Develop an initial schematic diagram 3. Determine the cost of this layout 4. By trialanderror (or more sophisticated means), try to improve the initial layout 5. Prepare a detailed plan that evaluates factors in addi tion to transportation cost

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CostofProcessOrientedLayout
Minimize cost = x ij c ij
i =1 j=1 n n

where n= total number of work centers or departments i , j are individual departments x ij =number of loads moved from department i to department j c ij = cost to move a load between department i and department j

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Example
The following movements take place between the different de partments of a workshop goods in machining painting assembly goods in 45 3 6 machining 10 38 46 painting 4 30 15 assembly 5 40 20 qc 3 4 11 8 shipping 1 2 2 3 Suggest an efficient layout qc shipping 6 0 24 2 12 0 50 4 43 21

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Diagramforfunctionallayout
goods in machining painting assembly QC shipping A E I O U X absolutely essential extremely important important ordinary unimportant undesirable

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Example
goods in 55 machining 68 painting 33 assembly 58 QC 64 shipping 7 23 2 86 28 4 A E I O U X absolutely essential extremely important important ordinary unimportant undesirable 7 11 9 0

Total movements

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Example
goods in A machining A painting E assembly A QC A shipping O I U A I U A E I O U X absolutely essential extremely important important ordinary unimportant undesirable > 50 3049 1529 515 05 O O O U

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Suggestedlayout
The following layout ensures most important movements are between departments that are close to each other

goods in

machining

painting

assembly

QC

shipping

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Detaileddesign:productlayout
Line balancing technique Example It takes 3 minutes to build a product This 3 minutes work can be broken down into 3 steps each of 1 minute
1 minute 1 minute 1 minute

It still takes total of 3 minutes activity per item

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Detaileddesign:productlayout
Example: cycle time for one person It takes 3 minutes to build a product One person can process 20 products in an hour, with a cycle time of 3 minutes
1 minute 1 minute 1 minute

Throughput time is also 3 minutes We cannot change throughput time, but can we produce 60 items per hour (cycle time of 1 minute)?
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Detaileddesign:productlayout
Example: cycle time for three people We could give the same tasks to three people
1 minute 1 minute 1 minute 1 minute 1 minute 1 minute 1 minute 1 minute 1 minute

Alternatively, we could give each person a separate task uses less equipment Either way cycle time reduced to 1 minute Throughput time 3 minutes
1 minute 1 minute 1 minute

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Anotherexample
Throughput time is four minutes With three operators, cycle time is 2 minutes The actual cycle time of the line is determined by the slowest process in the sequence
1 minute 1 minute 2 minute

Can we reduce the cycle time to 1 minute?

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Anotherexample
If we add one more operator to last workstation

2 minute 1 minute 1 minute 2 minute

cycle time for last workstation is average time between units of output = 2 minutes / 2 = 1 minute So cycle time for process is now one minute

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Precedencediagrams
Standard productswhere volume and price are important are assembled in line production The product or service is simplified by breaking it down into a series of simpler tasks The relationship of one task to another is called the preced ence diagram The individual tasks are collected together in work stations, then carried out in a sequencea linewhich allows the product to be assembled efficiently Line balancing ensures as far as possible that the work con tents of the stations are equal

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Precedencediagrams
Activity a b c d e f g Predecessor a a b c,d,e f Time (mins) 7 2 6 4 3 8 1

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Precedencediagram
a

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Precedencediagrams
Activity a b c d e f g Predecessor a a b c,d,e f Time (mins) 7 2 6 4 3 8 1

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Precedencediagram
c a d b

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Precedencediagrams
Activity a b c d e f g Predecessor a a b c,d,e f Time (mins) 7 2 6 4 3 8 1

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Precedencediagram
c a d b e

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Precedencediagrams
Activity a b c d e f g Predecessor a a b c,d,e f Time (mins) 7 2 6 4 3 8 1

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Precedencediagram
c a d b e f

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Precedencediagrams
Activity a b c d e f g Predecessor a a b c,d,e f Time (mins) 7 2 6 4 3 8 1

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Precedencediagram
7 min a 6 min c 4 min d 2 min b 3 min e Total time required: 31 minutes 8 min f 1 min g

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Linebalancing
Cycle time: the time between units of output Once a production target has been set, the line must produce at a rate that ensures demand is met: the required cycle time To achieve the right output, the processing time for each work station must not exceed the required cycle time. To achieve the right output, the number of work stations (n) must be at least the total processing time for each product (T) divided by the required cycle time (C)
number of workstations nT /C

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Definingtheworkstations
9 min 7 min a 6 min 6 min c 7 min 4 min 2 min b d 3 min e Required cycle time: 9 minutes 8 min f 9 min 1 min g

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Balancingloss
total work time = required cycle time number of workstations idle time = total work time total processing time for 1 unit idle time balancing loss = total work time balancing loss represents proportion of time lost because we need to use some idle time to divide work between workstations

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Balancinglossexample
total work time = required cycle time number of workstations =9 minutes 4=36 minutes idle time = total work time total processing time for 1 unit =36 minutes 31 minutes =5 minutes idle time 5 minutes balancing loss = = 13.9 % total work time 36 minutes

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Detaileddesignofcells
Cells designed by grouping similar products/services Example Electronic products packed by combination of machines in se quence Five products use the following
Product antistatic bag foam filler bag box label rfid tag 1 x x x x x
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3 x

4 x

x x x

x x

Detaileddesignofcells
Example We can rearrange the matrix to get two natural cells
Product bag label antistatic bag foam filler box rfid tag 1 3 4 2 x x 5 x x

x x x x

x x x x

General technique is called production flow analysis (see chapter 4 of textbook)

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Location:somedefinitions
Capacity: quantity of products/services that operation can produce per unit time It may produce less than this (underutilisation) Location: where the capacity is This affects the conditions for supply and demand Supply: quantity of products/services that other producers are willing and able to sell during a given period and under a given set of conditions Demand: quantity of products/services that customers are willing and able to buy during a given period and under a given set of conditions

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Factorsaffectinglocationdecision
Objectives for location Cost Only the costs that depend on location are important Revenue potential How much revenue the location may produce Service provision What service the operation can provide customers (e.g. de pendability, speed, quality) at a location Ideally we want to minimise cost and maximise revenue and maximise service provision at the same time In practice, this is usually impossible and so a compromise is sought
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Supplyanddemandfactors
We consider how cost, service provision and revenue are affected by many factors To select factors of importance, consider supply and demand, and environment

Supply

Operation

Demand

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Supplysidefactors
Labour costs These vary from location to location, depending on availability and cost of labour Usually measured in cost per unit of production Land costs These vary from country to country and are usually greater in cities than outside Energy costs Important for heavy industries that use a lot of energy Transportation costs Unit cost of transporting raw materials from source to opera tion
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Demandsidefactors
Convenience for customer Important for service provision and revenue potential to be near customers Suitability of site E.g. hotels usually situated in attractive regions rather than in dustrial areas Image of location For example, some high streets create a reputation for high quality goods and services Labour skills For example, farm shops located outside towns attract cus tomers looking for higher grade produce
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Environmentalfactors
Tax rates (especially between countries) and tariffs Government assistance Political/economic stability Local attitudes to investment Language Culture Labour relations Environmental regulations (e.g. pollution) Availability of support services Local amenities

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Locationforgoodsandservices
Operations producing goods Typically transportation and energy costs are more important Low customer contact diminishes importance of many demandside factors Operations producing services Operations with direct customer contact e.g. department store, restaurant, hotel usually supplyside factors dominate Operations with indirect customer contact e.g. call centres, ecommerce reduced importance of supplyside factors Operations with no customer contact e.g. creditcard processing Labour/land costs more important
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Locationdecision
Country decision Political/economic environment exchange rates access to markets Region decision Land costs Regional incentives Availability of labour Site decision Site size and cost transport Availability of services
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Summary
Process mapping: what adds value? Process layouts Fixed position Product Functional Cell Detailed functional layout design Detailed product layout design: line balancing Detailed cell layout design: production flow analysis Location Objectives Supplyside and demandside factors
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