POM - Layout, Handling, and Location Decisions

Layout, Handling,
and Location
DECISIONS
Presented by:
Cris Anthony A. Bragais

Dina G. Capiral
Michellyn A. Santos
BM 240: Production and Operations Management

Master of Management – Business Management
University of the Philippines - Manila
LAYOUT, HANDLING, and
LOCATION DECISIONS
Topic Outline
I. Plant Location and its Selection
II. Building Requirements and Plant Layout
III. Location and Layout of Work Stations
IV. Managing Operation Process
V. Material Handling
Points of Focus
Part 1:
PLANT
LOCATION  Plant Location
and its  Location Selection
SELECTION o Location Evaluation Models
 Factor rating
 Weighted Factor Rating
 Load-distance
 Center of Gravity
 Breakeven Analysis
Points of Focus
Part 1:
PLANT
 Factor rating
 Load-distance
? What is
PLANT LOCATION?
- is the process of determining a geographic

site for a firm’s operations.
- is a key-decision as large investment is

made in building plant and machinery. It is
not advisable or not possible to change the
location very often.
-The purpose of the location study is to find an

optimum location - one that will result in the
greatest advantage to the organization.
Plant Location| Need for Selecting a Suitable
Location
The need for selecting a suitable location arises because of
three situations.
I. When starting a new organization,
i.e., location choice for the first time.
II. In case of existing

organization.
III. In case of Global Location.

Location
I. In Case of Location Choice for the First Time or New Organizations
The following are the factors to be considered while selecting the location
for the new organizations:
Identification of region
Choice of a site within a region Dimensional analysis

Location
II. In Case of Location Choice for Existing Organization
In this case a manufacturing plant has to fit into a multi-plant operations
strategy. That is, additional plant location in the same premises and elsewhere
under following circumstances:
Plant divided
Plant
on the basis of
manufacturing
the process or
distinct
stages in
products
Manufacturing manufacturing
Plants
plant supplying
emphasizing
to specific
flexibility
market area
Location
II. In Case of Global Location
Plant Location| Reasons for a Global Location
Tangible Intangible
Reasons Reasons
Customer-
related
Reasons
Organizational
Learning-
related Reason
Reaching the customers
Other Strategic
Reasons
Plant Location| Factors Influencing Plant
Location/Facility Location
Specific Locational Factors
General Locational Factors

1. General Locational Factors
Controllable Uncontrollable
01 | Proximity to markets 01 | Government policy
02 | Supply of raw material 02 | Climatic conditions
03 | Transportation facilities 03 | Supporting industries and services
04 | Infrastructure availability 04 | Community and labor attitudes
05 | Labor and wages 05 | Community infrastructure and

amenity
06 | External economies of scale
07 | Capital
2. Specific Locational Factors | For Manufacturing Organization
Dominant Secondary
Favorable labor
climate Room for Expansion
Proximity to markets Construction Costs
Quality of life Transportation

Accessibility
Proximity to suppliers Cost of shuffling of
and resources people & materials
Utilities, taxes, and Competition for the
real estate costs workforce
2. Specific Locational Factors | For Service Organization
Dominant Secondary
Proximity to
Retail activity
customers
Transportation costs Residential density

and proximity to
markets
Traffic flow
Location of
competitors Site visibility
Points of Focus
Part 1:
PLANT
 Factor rating
 Load-distance
Weighted
Center
Factor of
Rating Gravity
Factor
Rating Load- Breakeven
distance Analysis
LOCATION EVALUATION MODELS

Factor Rating
Example:
• Mercury Drug is having a new branch in Bulacan. The
company needs to decide whether to place the new
branch in Bocaue or Meycauayan. Which is the best
location based on factor rating method?
Factor Rating| Example
Step 1: Identify the important location factors.
Location Factors
Facility utilization
Total customers per month
Average time per trip to the store
Land and construction costs
Employee preferences
Step 2: Rate each factor according to its relative importance,
i.e., higher the ratings is indicative of prominent factor.
Factor
Location Factors
Rating
Facility utilization 8
Average time per trip to the store 5
Total customers per month 6
Land and construction costs 3
Employee preferences 5
Step 3: Rate each location according to the merits of the location
for each factor.
Factor Rating
Location Factors
Rating Meycauayan Bocaue
Facility utilization 8 3 5
Average time per trip to the store 5 4 3
Total customers per month 6 4 5
Land and construction costs 3 1 2
Employee preferences 5 5 3
Step 4: Calculate the rating for each location by multiplying factor
assigned to each location with basic factors considered.
Factor Meycauayan Bocaue

Location Factors Rating Rating Total Rating Total
(a) (b) (ab) (c) (ac)
Facility utilization 8 3 24 5 40
Average time per trip to the
store
5 4 20 3 15
Total customers per month 6 4 24 5 30
Land and construction costs 3 1 3 2 6
Employee preferences 5 5 25 3 15
Step 5: Find the sum of product calculated for each factor and
select best location having highest total score.
(a) (b) (ab) (c) (ac)
store
5 4 20 3 15
Total 96 Total 106
The total score for Bocaue is higher than that of Meycauayan.
Hence Bocaue, is the better choice.
Weighted
Center
Factor of
Rating Gravity
Factor
distance Analysis

Weighted Factor Rating
Example:
• Mercury Drug is having a new branch in Bulacan. The
company needs to decide whether to place the new
branch in Bocaue or Meycauayan. Which is the best
location based on weighted factor rating method?
Weighted Factor Rating| Example
Step 1: Identify the important location factors.
Location Factors
Facility utilization
Total customers per month
Average time per trip to the store
Land and construction costs
Employee preferences
Steps 2: Assign weights on each factor based on relative importance.
Location Factors Weight
Facility utilization 25
Average time per trip to the store 25
Total customers per month 25
Land and construction costs 15
Employee preferences 10
Step 3: Give scores to each location according to the merits of
the location for each factor.
Scores
Location Factors Weight
Meycauayan Bocaue
Facility utilization 25 3 5
Average time per trip to the store 25 4 3
Total customers per month 25 3 3
Land and construction costs 15 1 2
Employee preferences 10 5 3
Step 4: Calculate the weighed score for each location by multiplying
factor assigned to each location with basic scores considered.
Weight Meycauayan Bocaue

Location Factors Scores Total Scores Total
(a) (b) (ab) (c) (ac)
store
25 4 100 3 75
Step 5: Find the sum of product calculated for each factor and
select best location having highest total score.
(a) (b) (ab) (c) (ac)
store
25 4 100 3 75
Total 315 Total 335
Bocaue is the better site based on weighed scores.
Weighted
Center
Factor of
Rating Gravity
Factor
distance Analysis

What is
? LOAD-DISTANCE METHOD?
“a mathematical model used to evaluate
locations based on proximity factors.
- The objective is to select a location that

minimizes the total weighted loads moving
into and out of the facility.
- The distance between two points is

expressed by assigning the points to grid
coordinates on a map. An alternative approach
is to use time rather than distance.”
Load-distance Method| Distance Measures
Euclidian Distance
is the straight-line distance,
or shortest possible path,
between two points.
Rectilinear Distance
is the sum of the two
dashed lines representing
the base and side of the
triangle in figure.
Example:
• Mercury Drug is having a new branch in Bulacan. It will
receive inbound shipments from several suppliers,
including one in Marilao. If the new branch will be
located in Bocaue, what would be the distance between
the two facilities?
40
35 Point A =
A (10,30) supplier’s
30 location in
Marilao
25
20
B (25,20) Point B =
possible new
15
store’s location
in Bocaue
10
0
0 5 10 15 20 25 30 35 40
40
Point A =
possible new
35 Euclidian Distance
A (10,30) store’s location
30 in Bocaue
Point B =
supplier’s
25
Y B (25,20) location in
20
Marilao
15
10
5
0
0 5 10 15 20 25 30 35 40
X
Euclidian Distance
The distance between points A and B is the length of the hypotenuse of a
right triangle, or
d AB  ( X A  X B )  (Y A  YB )
2 2
Where:
d AB = distance between points A and B
XA = x-coordinate of point A
YA = y-coordinate of point A
XB = x-coordinate of point B
YB = y-coordinate of point B
Euclidian Distance
Given:
d AB  ( X A  X B ) 2  (Y A  YB ) 2 Point A (10,30)
Point B (25,20)
d AB  (10  25 )  (30  20 )
2 2
d AB  ( 15 ) 2  (10 ) 2
d AB  ( 225 )  (100 )
d AB  325
d AB  18 .03
The distance travelled in the x-direction is the absolute value of the difference
in x-coordinates. Adding this result to the absolute value of the difference in
the y-coordinates.
D AB  X A  X B  Y A  YB
Where:
D AB = distance between points A and B
XA = x-coordinate of point A
YA = y-coordinate of point A
XB = x-coordinate of point B
YB = y-coordinate of point B
40
Point A =
possible new
35 Euclidian Distance
A (10,30) store’s location
30 in Bocaue
Point B =
supplier’s
25
Y B (25,20) location in
20
Marilao
15
10
5
0
0 5 10 15 20 25 30 35 40
X
Given:
D AB  X A  X B  Y A  YB Point A (10,30)
Point B (25,20)
D AB  10  25  30  20
D AB  15  10
D AB  25
Given:
D AB  X A  X B  Y A  YB Point A (10,30)
Point B (25,20)
D AB  10Distance
Euclidian  25  30  20
D AB  15  10
dDABAB 18
25.03
Load-distance Method| Example
Example:
• Mercury Drug is having a new branch in Bulacan and will be
receiving items from suppliers in various locations. Two locations
being considered for the new store are in Bocaue (5.8, 4.3) and
Meycauayan (7.5, 2.2). If we use the expected number of units per
month as the load and use rectilinear distance, which location is
better in terms of its total load-distance score?
Supplier (x, y) Load

Bocaue (5.5, 4.5) 10
Caloocan (2.5, 4.5) 2
Meycauayan (7, 2) 14
Sta. Maria (5, 2) 7
Valenzuela (2.5, 2.5) 5
Step 1: Calculate the distance between each supplier and the proposed store
locations using rectilinear method.
Meycauayan Bocaue
(7.5, 2.2) (5.8, 4.3)
Distance Distance
Bocaue (5.5, 4.5) 10 2 + 2.3 = 4.3 0.3 + 0.2 = 0.5
Caloocan (2.5, 4.5) 2 5 + 2.3 = 7.3 3.3 + 0.2 = 3.5
Meycauayan (7, 2) 14 0.5 + 0.2 = 0.7 1.2 + 2.3 = 3.5
Sta. Maria (5, 2) 7 2.5 + 0.2 = 2.7 0.8 + 2.3 = 3.1
Valenzuela (2.5, 2.5) 5 5 + 0.3 = 5.3 3.3 + 1.8 = 5.1
Step 2: Calculate the load-distance for each supplier by multiplying its load to
each proposed store location.
Meycauayan Bocaue
(7.5, 2.2) (5.8, 4.3)
Load- Load-
Distance Distance
distance distance
Bocaue (5.5, 4.5) 10 2 + 2.3 = 4.3 43 0.3 + 0.2 = 0.5 5
Caloocan (2.5, 4.5) 2 5 + 2.3 = 7.3 14.6 3.3 + 0.2 = 3.5 7
Meycauayan (7, 2) 14 0.5 + 0.2 = 0.7 9.8 1.2 + 2.3 = 3.5 49
Sta. Maria (5, 2) 7 2.5 + 0.2 = 2.7 18.9 0.8 + 2.3 = 3.1 21.7
Valenzuela (2.5, 2.5) 5 5 + 0.3 = 5.3 26.5 3.3 + 1.8 = 5.1 25.5
Step 3: Sum all the load-distance scores for each proposed store location.
Meycauayan Bocaue
(7.5, 2.2) (5.8, 4.3)
Load- Load-
Distance Distance
distance distance
Bocaue (5.5, 4.5) 10 2 + 2.3 = 4.3 43 0.3 + 0.2 = 0.5 5
Caloocan (2.5, 4.5) 2 5 + 2.3 = 7.3 14.6 3.3 + 0.2 = 3.5 7
Meycauayan (7, 2) 14 0.5 + 0.2 = 0.7 9.8 1.2 + 2.3 = 3.5 49
Sta. Maria (5, 2) 7 2.5 + 0.2 = 2.7 18.9 0.8 + 2.3 = 3.1 21.7
Valenzuela (2.5, 2.5) 5 5 + 0.3 = 5.3 26.5 3.3 + 1.8 = 5.1 25.5
Total = 112.8 Total = 108.2
Bocaue is a better location for the new store.

Weighted
Center
Factor of
Rating Gravity
Factor
distance Analysis

What is
? CENTER OF GRAVITY?
“the location that minimizes the weighted distance
between the warehouse and its supply and
distribution points, where the distance is weighted
by the number of tons supplied or consumed.
- The center of gravity method takes into account

the locations of plants and markets, the volume of
goods moved, and transportation costs in arriving
at the best location for a single intermediate
warehouse.”
Center of Gravity| Formula
Cx 
 D W ix i
Cy 
 D W iy i
W i W i
Where:
Cx = x-coordinate of the center of gravity
Cy = y-coordinate of the center of gravity
Dix = x-coordinate of location i
Diy = y-coordinate of location i
Wi = load of location i
Center of Gravity| Example
Example:
• Mercury Drug is having a new branch in Bulacan and will be
receiving items from suppliers in various locations. Two locations
being considered for the new store are in Bocaue (20, 25) and
Meycauayan (25, 10.5). If we use the expected number of units per
month as the load and use rectilinear distance, find the target area’s
center of gravity for the new store.
Step 1: Place the locations on a coordinate system.
40
35
30
25
20
15
10
0
0 5 10 15 20 25 30 35 40
Step 2: List the supplier details, and the coordinate distances
along with the load for each supplier location.
Units (in
Supplier Location (x, y)
thousands)
A Caloocan (35, 15) 10
B Guiguinto (10, 30) 7
C Marilao (25, 15.5) 3
D Sta. Maria (30, 30) 5
E Valenzuela (25, 5) 12
Step 3: Multiply the coordinates of each location to its
corresponding load.
Units (in
Location (x, y)
Supplier thousands) Dix  Wi Diy  Wi
Di Wi
A Caloocan (35, 15) 10 350 150
B Guiguinto (10, 30) 7 70 210
C Marilao (25, 15.5) 3 75 46.5
D Sta. Maria (30, 30) 5 150 150
E Valenzuela (25, 5) 12 300 60
Step 4: Calculate the total for the load, and its products with
the supplier location coordinates.
Units (in
Location (x, y)
Supplier thousands) Dix  Wi Diy  Wi
Di Wi
A Caloocan (35, 15) 10 350 150
B Guiguinto (10, 30) 7 70 210
C Marilao (25, 15.5) 3 75 46.5
D Sta. Maria (30, 30) 5 150 150
E Valenzuela (25, 5) 12 300 60
Total = 37 945 616.5
Step 5: Find the coordinates of the center of gravity.
Units Dix  Wi DyWi
37 945 616.5
Cx 
 D Wix i
Cy 
 D W
iy i
W i W i
945 616 .5
Cx  Cy 
37 37
C x  25 .54 C y  16 .66
Center of Gravity: (25.54, 16.66)

40
35
30
25
20
15
10
0
0 5 10 15 20 25 30 35 40
Weighted
Center
Factor of
Rating Gravity
Factor
distance Analysis

What is
? BREAKEVEN ANALYSIS?
“Break even analysis implies that at some point in
the operations, total revenue equals total cost.
Break even analysis is concerned with finding the

point at which revenues and costs agree exactly. It
is called ‘Break-even Point’.”
Breakeven Analysis| Example
Example:
• Potential locations for the new Mercury Drug store is in Bocaue,
Meycauayan, and Marilao. Mercury Drug has a demand of 130,000
units of a new product. Cost structures for the three potential
locations are shown below. Determine which location is to be
selected and also identify the volume ranges where each location is
suited.
Bocaue Meycauayan Marilao

(X) (Y) (Z)
Fixed Cost Php 150,000 Php 350,000 Php 950,000
Variable Cost Php 10 Php 8 Php 6
• Solve for the crossover between X and Y:
10n + 150,000 = 8n + 350,000
2n = 200,000
n = 100,000 units
• Solve for the crossover between Y and Z:

8n + 350,000 = 6n + 950,000
2n = 600,000
n = 300,000 units
Therefore, at a volume of 130,000 units, (Y) Meycauayan is the

appropriate location.
• Substitute the values for X and Y:
X = 10n + 150,000 Y = 8X + 350,000
X = 10(100,000) + 150,000 Y = 8(100,000) + 350,000
X = Php 1,150,000 Y = Php 1,150,000
• Substitute the values for Y and Z:

Y = 8n + 350,000 Z = 6n + 950,000
Y = 8(300,000) + 350,000 Z = 6(300,000) + 950,000
Y = Php 2,750,000
Z = Php 2,750,000
3500000
(X) Bocaue (Y) Meycauayan
(Z) Marilao
3000000
2500000
2000000
1500000
1000000
500000
0
0 100000 200000 300000 400000 500000
Layout, Handling,
and Location
DECISIONS
Presented by:
Cris Anthony A. Bragais

Dina G. Capiral
Michellyn A. Santos
BM 240: Production and Operations Management

Master of Management – Business Management
University of the Philippines - Manila
Part 2:
Points of Focus
PROCESS Selection
&
 Process Selection
LAYOUT Decision
 Types of Processes
 Layout Decision
 Objectives of Layout
 Types of Layouts
Process Selection
PROCESS Selection |
Three primary factors to consider in PROCESS selection:
Variety
in products Volume
and services of output
Flexibility
in equipment
PROCESS Types |
Job Shop
Small batch of a
variety of custom
products are
made
Job Shop Process
e.g., medical surgery/operation
PROCESS Types |
Batch
Job Shop Processing
Small batch of a components or goods
variety of custom are produced in
products are groups (batches) and
made not in a continuous
stream
Batch Process
e.g., bread, donuts and pastries were backed in batches
PROCESS Types |
Batch
Job Shop Processing
stream
Repetitive
Process
continuous
production of
identical products
during a
manufacturing
cycle
Repetitive Process
e.g., Cars and Computer manufacturing
PROCESS Types |
Batch
Job Shop Processing
stream
Repetitive
Process
Continuous
continuous
Process
production of
Involves on-going
identical products
production of end
during a
products or
manufacturing
services
cycle
Continuous Process
e.g., Petroleum Products and Utility Services (electric and internet)
Brief Description
Job Shop Batch Repetitive Continuous
Description Customized Semi- Standardized Highly

goods and standardized goods or standardized
services goods and services goods or
services services
Advantages Able to handle Flexibility Low unit cost, Very efficient
a wide variety High volume, Very high
of work efficient volume
Disadvantages Slow, high Moderate Low flexibility, Very rigid, lack
cost per unit, cost per unit, high cost of of variety,
complex Moderate downtime costly to
planning and scheduling change, very
scheduling complexity high cost of
downtime
Variety
Job Shop Emergency

Room
Commercial
Batch
Bakery
Repetitive Automated
Carwash
Continuous Petroleum
Refinery
Low High
Volume
Layout Decisions
? What is
PLANT LAYOUT?
“Plant layout is a plan of an optimum

arrangement of facilities (such
departments and workstations) including
personnel, operating equipment, storage
space, material handling equipment and
all other supporting services along with
the design of best structure to contain all
these facilities for the production of goods
and services”
LAYOUT Decision |
Layout decision is important because to three reasons:
Investment
in money and Impact on
effort Cost and
Efficiency
Long-term
Commitment
Facilitate attainment of
product or service Quality
7 2
To use workers and
To design for safety
space efficiently
OBJECTIVES
Minimize of
production time or
6 LAYOUTS
customer service
time
3 To avoid
bottlenecks
To eliminate unnecessary
movements of workers 5 4 To minimize material
and materials handling Cost
PRINCIPLES of Plant Layout
01|Integration
A good layout is one that integrates men,
materials, machines and supporting services and
others in order to get the optimum utilisation of
resources and maximum effectiveness
02|Minimum Distance
The facilities should be arranged to allow
minimum movement or travel of man and
materials
03|Cubic Space Utilization

The good layout is one that utilise both
horizontal and vertical space. It is not only
enough if only the floor space is utilised
optimally but the third dimension
04|Flow
A good layout is one that makes the
materials to move in forward direction
towards the completion stage
05|Maximum Flexibility
The good layout is one that can be altered
without much cost and time.
06|FlowSafey, Security
and Satisfaction
A good layout is one that gives due
consideration to workers safety and
satisfaction and safeguards the plant and
machinery against fire, theft, etc
07|Minimum Handling
A good layout is one that reduces the
material handling to the minimum.
CLASSIFICATION of Plant Layout
Product Combination
Fixed
Process Group
Position
What is
PROCESS LAYOUT?
What is
PROCESS LAYOUT?
it is a design for the floor plan of a

plant which aims to improve
efficiency by arranging equipment
according to its function
PROCESS Layout
All machines performing similar type of operations
are grouped at one location. This type of layout is
recommended for batch process
PROCESS Layout
Also recommended for job shop process like hospitals
Surgery ER triage room Emergency room admissions

Patient A - broken leg
Patient B - erratic heart

pacemaker
Laboratories
Radiology ER Beds Pharmacy Billing/exit
Adapted from Operations Management, 12th Edition by Heizer, Render, Muzon

PROCESS Layout
Quite common in non-manufacturing environments

Procedure for Designing Process Layout
Create a drawing Use structured analytical

and description of method to obtain good
the facility being general layout
designed
02 04
01 03 05
List and describe Identify and estimate Evaluate and modify the layout,
each functional the amount of material incorporating details such as
work centers and personnel flow machine orientation, storage
among work centers area and equipment access.
PROCESS Layout | Advantages
 Machines are better utilized and

fewer machines are required
 Lower investment on machines (in

cost and number)
 Higher utilisation of production
facilities
 Flexibility of equipment and
personnel
 Higher degree of flexibility in work
distribution to machineries and
workers
PROCESS Layout | Disadvantages
 Reduced material handling

efficiency due to backtracking and
long movements
 Material handling cannot be
mechanised which adds to cost
 Process time is prolonged which
reduce the inventory turnover and
increases the in-process inventory
 Lowered productivity due to number
of set-ups
 Space and capital are tied up by

work-in-process
Product
Process
What is
PRODUCT LAYOUT?
it is the layout wherein the

production line or the machines and
auxiliary services are located
according to the processing
sequence of the product
What is
PRODUCT LAYOUT?
it is the layout wherein the production
line or the machines and auxiliary
services are located according to the
processing sequence of the product
Fabrication line Assembly line
► Builds components on a ► Puts fabricated parts
series of machines together at a series of
workstations
► Machine-paced
► Paced by work tasks
► Require mechanical or
engineering changes to ► Balanced by moving tasks
balance
Both types of lines must be balanced so that the time to

perform the work at each station is the same
PRODUCT Layout |
McDonald's Assembly Line

PRODUCT Layout | Advantages
 The flow of product will be smooth

and logical in flow lines
 Throughput time is less
 Reduced material handling cost
due to mechanised handling
systems and straight flow
 Simplified production, planning

and control systems are possible
 Less space is occupied by work
transit and for temporary storage
 Small work-in-process inventory

PRODUCT Layout | Disadvantages
 A breakdown of one machine in a

product line may cause stoppages
of machines in the downstream of
the line.
 A change in product design may
require major alterations in the
layout.
 The line output is decided by the
bottleneck machine.
 Comparatively high investment in
equipment is required.
 Lack of flexibility. A change in
product may require the facility
modification.
Fixed
Product
Position
Process
What is
FIXED POSITION LAYOUT?
What is
FIXED POSITION LAYOUT?
In this type of layout, the material,
or major components remain in a
fixed location and tools, machinery,
men and other materials are
brought to this location
FIXED Layout
Suitable when:
• one or a few pieces of
identical heavy products
are to be manufactured;
• the assembly consists of

large number of heavy
parts; and
• the cost of Transportation Building Ships
of these parts is very high.

FIXED Layout
Medical Operations Construction

Fixed
Product
Position
Combination Process
What is
COMBINATION LAYOUT?
it is a layout wherein the machinery

is arranged in a process layout but
the process grouping is then
arranged in a sequence to
manufacture various types and sizes
of products.
Fixed
Product
Position
Combination Process Group

What is
GROUP LAYOUT?
is a combination of the product

layout and process layout. It
combines the advantages of both
layout systems
GROUP Layout
Workstation
LAYOUT
WORKSTATIONS Layout |
Material
Current layout
workers in small closed areas.
Improved layout
cross-trained workers can assist each
other. May be able to add a third
worker as additional output is needed.

WORKSTATIONS Layout |
Current layout
straight lines make it hard to Improved layout
balance tasks because work may in U shape, workers have better
not be divided evenly access. Four cross-trained
workers were reduced to three.
U-shaped line may reduce employee movement and space

requirements while enhancing communication, reducing the
number of workers, and facilitating inspection

Department Arrangements
FLOW PLANNING
The effective flow within a facility depends on effective flow
between departments. Such flow depends on effective flow within
departments, which depends on effective flow within workstations.
Space Requirements
Determination of Space
Requirements:
General Service Areas

offices, records, data, inspections etc
Materials Handling
inside traffic set asides to move
product, tools raw mats etc.
Space Requirements
Determination of Space Requirements:
• Equipment
Footprint + machine travel + access
(load/maintenance) + shop services
(air/electrical/water, etc)
• Materials
consider unit load size + tooling/scrap
etc
• Personnel
ingress & egress 30 – 42” for passage
between stationary or operating
machines
SERVICE Layouts
1. Office layout: Positions

workers, their equipment,
and spaces/offices to
provide for movement of
information
2. Retail layout: Allocates

display space and responds
to customer behavior
3. Warehouse layout:
Addresses trade-offs
between space and material
handling
Part 4:
Points of Focus
Managing  Line Balancing

Operations  Precedence Diagram
Process  Work Station Cycle Time
 Number of Work Stations
 Assignments
 Evaluate Efficiency
 Rebalancing
Line
BALANCING
What is
? LINE BALANCING?
“The process of assigning tasks to
workstations in such a way that the
workstations have approximately
equal time requirements. This
results in the minimized idle time
along the line and high utilization
of labor and equipment.”
STEPS | Line Balancing
Rebalancing
Evaluate
Efficiency
Assignments
Number of
Work Stations
Work Station
Cycle Time
Precedence
Diagram
EXAMPLE | Line Balancing
CrisDiMich Telecom, a start-up company, needs to service 500 calls per day.
The company operates in 420 minutes per day and the precedence & time
requirements for each tasks are given below. Find the balance that minimizes
the number of workstations, subject to cycle time and precedence constraints.
Task Task Time Preceding

(in seconds) Tasks
A 45 -
B 11 A
C 9 B
D 50 -
E 15 D
F 12 C
G 12 C
H 12 E
I 12 E
J 8 F,G,H,I
K 9 J
Precedence Workstation No. of Evaluate
Assignments Rebalancing
Diagram Cycle Time Workstation Efficiency
Task Task Time Preceding

(in seconds) Tasks Specify the sequential relationships
A 45 - among tasks using a precedence
B 11 A diagram.
C 9 B
D 50 -
E 15 D
F 12 C
G 12 C
H 12 E
I 12 H
J 8 F,G,H,I
K 9 J
Total: 195 sec
Determine the required workstation cycle time (C), using the formula:
Production time in each day

C=
Required output per day
Production Time per day
(420 mins)(60 secs) = 420 mins
C= Required Output per day
(500 calls)
= 500 calls
C= 50.4 seconds
Determine the theoretical minimum number of workstations required.
Sum of task times (T)

Nt =
Cycle Time (C)
Sum of task Times = 195 seconds
C = 50.4 seconds
195 seconds
Nt = = 3.87 = 4 workstations
50.4 seconds
Select assignment rules.

(1) Prioritize tasks in order of the largest number of the tasks or;
(2) Prioritize tasks in order of the longest task time.
TASK Number of
Following Tasks
A 6
B or D 5
C or E 4
F, G, H, or I 2
J 1
K 0
Make task assignments to form workstation 1, workstation 2, and so forth until all tasks
are assigned. CYCLE TIME is 50.4 seconds .
Station Tasks Task Time
1 A 45
2 D 50
Our secondary rule, to be invoked where ties exist 3 B 11
from our primary rule. Prioritize tasks in order of E 15
longest task time. Note that D should be assigned C 9
before B, and E assigned before C due to this tie-
F 12
breaking rule.
4 G 12
H 12
I 12
J 8
5 K 9
Station Tasks Task

Time
1 A 45
2 D 50
3 B 11
E 15
C 9
F 12
4 G 12
H 12
I 12
J 8
5 K 9
Sum of Tasks Times (T)

Efficiency =
(Actual # of WS) (Cycle Time)
Sum of Task Times = 195 seconds

Actual # of WS = 5 workstations
Cycle Time = 50.4 seconds
195
Efficiency = = 77% Efficiency
(5) (50.4)
• 23% Idle Time across the Assembly Line


 Re-evaluate the task assignments of each Workstations and

see if we can do better.
 Consider the other Factors affecting the Balance.

Part 5:
Points of Focus
Material  Materials/Equipment Handling

HANDLING  Definition
 Application
 Materials
 Equipment
 Principles of Materials
Handling
 Relationship between
layout and material
handling
Material
HANDLING
MATERIAL HANDLING
“The movement, protection, storage and control of

materials and products throughout manufacturing,
warehousing, distribution, consumption and disposal.
MATERIAL HANDLING application helps with:
• Forecasting
• Resource allocation
• Production planning
• Flow and process management
• Inventory management and control
• Customer delivery
• After-sales support and service

weight
size
shape
and
others
Characteristics of Materials Affecting Handling

Equipment Classification | Materials Handling
Fixed
Path
Variable
Path
Examples of Equipment | Materials Handling
Cranes
and Hoists
Conveyors
Forklifts
Automated Guided
Industrial Trucks Elevators Vehicles (AGVs)
PRINCIPLES | Materials Handling
Planning
Life Cycle Cost Standardization
Automation Work
Environment Ergonomics
System Unit Load

Space
Utilization
Planning
Define the needs, strategic performance
objectives and functional specification of the
proposed system and supporting technologies.
Standardization
All material handling methods, equipment,
controls and software should be standardized.
Work
Material handling processes should be simplified.
Ergonomics
Work and working conditions should be adapted to
support the abilities of a worker.
Unit Load
Less effort and work is required to move
several individual items
Space Utilization
To maximize efficient use of space within a facility.
System
Material movement and storage should be
coordinated throughout all processes.
Environment
Energy use and potential environmental impact should
be considered.
Automation
Automated material handling technologies should be
deployed when possible and where they make sense
to do so.
Life Cycle Cost

For all equipment specified for the system, an analysis
of life cycle costs should be conducted.
RELATIONSHIP BETWEEN
PLANT LAYOUT
AND MATERIAL HANDLING
Least material handling and least
Material movements are much
costly MH equipment.
faster
the width of aisle or sub-aisle and ceiling heights are

adequate to accommodate MH equipment.
QUESTIONS?
“Design is not just what it
looks like and feels like.
Design is how it works.”
Steve Jobs
THAT’S ALL
THANK YOU FOR BEING HERE

POM - Layout, Handling, and Location Decisions

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Layout, Handling,

Cris Anthony A. Bragais

BM 240: Production and Operations Management

I. Plant Location and its Selection

II. Building Requirements and Plant Layout

III. Location and Layout of Work Stations

IV. Managing Operation Process

- is the process of determining a geographic

- is a key-decision as large investment is

-The purpose of the location study is to find an

II. In case of existing

III. In case of Global Location.

Choice of a site within a region Dimensional analysis

Specific Locational Factors

General Locational Factors

01 | Proximity to markets 01 | Government policy

02 | Supply of raw material 02 | Climatic conditions

03 | Transportation facilities 03 | Supporting industries and services

04 | Infrastructure availability 04 | Community and labor attitudes

05 | Labor and wages 05 | Community infrastructure and

Proximity to markets Construction Costs

Quality of life Transportation

Transportation costs Residential density

LOCATION EVALUATION MODELS

Factor Meycauayan Bocaue

LOCATION EVALUATION MODELS

Location Factors Weight

Weight Meycauayan Bocaue

LOCATION EVALUATION MODELS

- The objective is to select a location that

- The distance between two points is

Supplier (x, y) Load

Bocaue is a better location for the new store.

LOCATION EVALUATION MODELS

- The center of gravity method takes into account

Cy = y-coordinate of the center of gravity

Dix = x-coordinate of location i

Diy = y-coordinate of location i

Center of Gravity: (25.54, 16.66)

LOCATION EVALUATION MODELS

Break even analysis is concerned with finding the

Bocaue Meycauayan Marilao

• Solve for the crossover between Y and Z:

Therefore, at a volume of 130,000 units, (Y) Meycauayan is the

• Substitute the values for Y and Z:

Cris Anthony A. Bragais

BM 240: Production and Operations Management

Description Customized Semi- Standardized Highly

Job Shop Emergency

“Plant layout is a plan of an optimum

03|Cubic Space Utilization

it is a design for the floor plan of a

Surgery ER triage room Emergency room admissions

Patient B - erratic heart

Radiology ER Beds Pharmacy Billing/exit

Adapted from Operations Management, 12th Edition by Heizer, Render, Muzon

Quite common in non-manufacturing environments

Create a drawing Use structured analytical

 Machines are better utilized and

 Lower investment on machines (in

 Reduced material handling

 Space and capital are tied up by

it is the layout wherein the