ME 328 Manufacturing

Engineering

Facility Location-Layout
 Location Analysis
• Facility location is the process of identifying the best
geographic location for a service or production facility
• Factors Affecting Location Decisions
• Proximity to source of supply:
– Reduce transportation costs of perishable or bulky raw materials
• Proximity to customers:
– High population areas, close to JIT partners
• Proximity to labor:
– Local wage rates, attitude toward unions, availability of special skills
(silicon valley)

More Location Factors

• Community considerations:
– Local community’s attitude toward the facility.
• Site considerations:
– Local zoning & taxes, access to utilities, land prices.
• Quality-of-life issues:
– Climate, cultural attractions, commuting time, etc.
• Other considerations:
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– Options for future expansion, local competition, etc.
 Making Location Decisions
Analysis should follow 3 step process:
1. Identify dominant location factors
2. Develop location alternatives
3. Evaluate locations alternatives

Procedures for evaluation location alternatives include

– Factor rating method
– Load-distance model
– Center of gravity approach
– Break-even analysis

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Factor Rating Example

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 Load-Distance Score
A Load-Distance Model Example: Matrix Manufacturing is considering where to
locate its warehouse in order to service its four Ohio stores located in Cleveland,
Cincinnati, Columbus, Dayton. Two sites are being considered; Mansfield and
Springfield, Ohio. Use the load-distance model to make the decision.

• Multiply by the number of loads between each site and the four cities

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 Load-Distance Score
Computing the Load-Distance Score for Springfield
• City Load Distance ld
Cleveland 15 20.5 307.5
Columbus 10 4.5 45
Cincinnati 12 7.5 90
Dayton 4 3.5 14
Total Load-Distance Score(456.5)

Computing the Load-Distance Score for Mansfield

City Load Distance ld
Cleveland 15 8 120
Columbus 10 8 80
Cincinnati 12 20 240
Dayton 4 16 64
Total Load-Distance Score(504)

The load-distance score for Mansfield is higher than for Springfield.

The warehouse should be located in Springfield.

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 The Center of Gravity Approach
• This approach requires that the analyst find the center of gravity of
the geographic area being considered
Computing the Center of Gravity for Matrix Manufacturing
Coordinates Load
Location (X,Y) (li) lixi liyi
Cleveland (11,22) 15 165 330
Columbus (10,7) 10 165
100 70
Cincinnati (4,1) 12 48
165 12
Dayton (3,6) 4 12
165 24
Total 41 325 436
• Computing the Center of Gravity for Matrix Manufacturing

Xc.g. =
 lX
i i
=
325
= 7.9 ; Yc.g. =
l Y
i i
=
436
= 10.6
l i 41 l i 41
• Is there another possible warehouse location closer to the C.G. that should
be considered?? Why?
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 Break-Even Analysis
• Break-even analysis computes the amount of goods
required to be sold to just cover costs
• Break-even analysis includes fixed and variable costs
• Break-even analysis can be used for location analysis
especially when the costs of each location are known

– Step 1: For each location, determine the fixed and variable

costs
– Step 2: Plot the total costs for each location on one graph
– Step 3: Identify ranges of output for which each location
has the lowest total cost
– Step 4: Solve algebraically for the break-even points over
the identified ranges

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 Example using Break-even Analysis: Work shop is
considering four possible sites for its new operation.
They expect to produce and ship 10,000 pieces. The
table and graph below are used for the analysis.

Example 9.6 Using Break-Even Analysis

Location Fixed Cost Variable Cost Total Cost
A $350,000 $ 5(10,000) $400,000
B $170,000 $25(10,000) $420,000
C $100,000 $40(10,000) $500,000
D $250,000 $20(10,000) $450,000

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 Facility Layout

Layout planning is deciding the best physical arrangement of

all resources within a facility
• Facility resource arrangement can significantly affect
productivity
• Two broad categories of operations:
– Intermittent processing systems – low volume of many different
products
– Continuous processing systems – high volume of a few
standardized products

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 Types of Layouts

• Four basic layout types consisting of:

– Process layouts - Group similar resources
together
– Product layouts - Designed to produce a specific
product efficiently
– Hybrid layouts - Combine aspects of both process
and product layouts
– Fixed-Position layouts - Product is two large to
move; e.g. a building

© Wiley 2010 12
 Process Layouts
• Process layout unique characteristics include:

– Resources used are general purpose

– Facilities are less capital intensive
– Facilities are more labor intensive
– Resources have greater flexibility
– Processing rates are slower
– Material handling costs are higher

▪ Scheduling resources & work flow is more

complex
▪ Space requirements are higher
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 Product Layouts
• Product layout unique characteristics are:
– Resources are specialized
– Facilities are capital intensive
– Processing rates are faster
– Material handling costs are lower
– Space requirements for inventory storage are
lower
– Flexibility is low relative to the market

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Process vs. Product Layouts

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 Hybrid Layouts

• Combine elements of both product & process

layouts
– Maintain some of the efficiencies of product layouts
– Maintain some of the flexibility of process layouts
– Example: Group technology & manufacturing cells

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 Fixed-Position Layout

• Used when product is large

• Product is difficult or impossible to move,
i.e. very large or fixed
• All resources must be brought to the site
• Scheduling of crews and resources is a
challenge

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 Designing Process Layouts

Step 1: Gather information:

Space needed, space available, identify closeness
measures
Step 2: Develop alternative block plans:
Using trial-and-error or decision support tools
Step 3: Develop a detailed layout:
Consider exact sizes/shapes of departments and work
centers including aisles and stairways
Tools like drawings, 3-D models, and CAD software are
available to facilitate this process

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 Designing Product Layouts
• Designing product layouts requires consideration of:
– Sequence of tasks to be performed by each workstation
– Logical order
– Speed considerations – line balancing

Step 1: Identify tasks & immediate predecessors

Step 2: Determine output rate
Step 3: Determine cycle time
Step 4: Compute the Theoretical Minimum number of Stations
Step 5: Assign tasks to workstations (balance the
line)
Step 6: Compute efficiency, idle time & balance delay

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 Layout Calculations
• Step 1: Identify Tasks & Immediate Predecessors
Producing a Metal Cooling Plate
Element Task Predecessor Task Time (Sec)
A Measurement and cutting None 50
B Eye Inspection A 5
C Place to the machine B 25
D Start and Adjustment C 15
E Thickness D 12
F Hole Drilling D 10
G Channel openning D 15
H Polish and Remove E,F,D 18
I Clean and Pack H 15
Total Time 165

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 Layout Calculations
• Step 2: Determine output rate
– Workshop needs to produce 60 parts per hour

• Step 3: Determine cycle time

– The amount of time each workstation is allowed to complete its
tasks

available time (sec./day) 60 min/hr x 60 sec/min

Cycle time (sec./unit) = = = 60 sec./unit
desired output (units/hr ) 60 units/hr

– Limited by the bottleneck task (the longest task in a process):

available time 3600 sec./hr.
Maximum output = = = 72 parts/hr
bottleneck task time 50 sec./unit

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 Layout Calculations

• Step 4: Compute the theoretical minimum

number of stations
– TM = number of stations needed to achieve 100%
efficiency (every second is used)

 (task times) 165 seconds

TM = = = 2.75, or 3 stations
cycle time 60 sec/station

– Always round up (no partial workstations)

– Serves as a lower bound for our analysis

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 Layout Calculations
• Step 5: Assign tasks to workstations
– Start at the first station & choose the longest eligible task following
precedence relationships
– Continue adding the longest eligible task that fits without going over the
desired cycle time
– When no additional tasks can be added within the desired cycle time, begin
assigning tasks to the next workstation until finished
Workstation Eligible task Task Selected Task time Idle time
A A 50 10
1
B B 5 5
C C 25 35
2 D D 15 20
E, F, G G 15 5
E, F E 12 48
F F 10 38
3
H H 18 20
I I 15 5

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 Layout Calculations

• Step 6: Compute efficiency and balance delay

– Efficiency (%) is the ratio of total productive time
divided by total time

Efficiency (%) =
 t
=
165 sec.
(100) = 91.7%
NC 3 stations x 60 sec.

– Balance delay (%) is the amount by which the line falls

short of 100%

Balance delay = 100% − 91.7% = 8.3%

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Group Technology (CELL) Layouts
• One of the most popular hybrid layouts uses Group
Technology (GT) and a cellular layout
• GT has the advantage of bringing the efficiencies of a
product layout to a process layout environment

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Process Flows before the Use of GT Cells

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Process Flows after the Use of GT Cells

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 Summary
• Layout planning is highly important for the efficiency. Otherwise, there
can be much wasted time and energy, as well as confusion.
• There are four basic types of layouts: process, product, hybrid, and
fixed position.
• Process layouts provide much flexibility and allow for the production of
many products with differing characteristics. Product layouts, on the
other hand, provide greater efficiency when producing one type of
product.
• The steps for designing process layouts are (1) gather information
about space needs, space availability, and closeness requirements of
departments; (2) developing a block plan or schematic of the layout;
and (3) developing a detailed layout.
• The steps for designing an product layout are (1) identify tasks that
need to be performed and their immediate predecessors; (2) determine
output rate; (3) determine cycle time; (4) computing the theoretical
minimum number of work stations, (5) assigning tasks to workstations;
and (6) computing efficiency and balance delay.
• Hybrids layouts have advantages over other layout types because they
combine elements of both process and product layouts to increase
efficiency. 30