PRODUCTION & OPERATIONS MANAGEMENT: FACILITY LAYOUT PLANNING

FACILITY LAYOUT PLANNING

Layout decisions include the best placement of machines (in production settings), offices and desks (in office settings), or service
centers (in settings such as hospitals or department stores). An effective layout facilitates the flow of materials, people, and
information within and between areas.

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.
4. Production Facility or Plant Layout: Addresses plant, machinery, and equipment’s optimum arrangement.

PLANT LAYOUT
Plant layout refers to the physical arrangement of production facilities. It is the configuration of departments, work centers, and
equipment in the conversion process. It is a floor plan of the physical facilities, which are used in production.

According to Moore “Plant layout is a plan of an optimum arrangement of facilities including personnel, operating equipment,
storage space, material handling equipment and all other supporting services along with the design of the best structure to contain
all these facilities”.

IMPORTANCE OF LAYOUT DECISIONS

 Requires substantial investments of money and effort
 Involves long-term commitments
 Has significant impact on cost and efficiency of short-term operations

THE NEED FOR ALTERING LAYOUTS

 Inefficient operations  Changes in environmental or other legal
 Changes in the design of products or services requirements
 The introduction of new products or services  Changes in volume of output or mix of products
 Accidents, Safety hazard  Changes in methods and equipment
 Morale problems
OBJECTIVES OF PLANT LAYOUT
The primary goal of the plant layout is to maximize the profit by the arrangement of all the plant facilities to the best advantage
of the total manufacturing of the product.
The general objectives of plant layout are:
1. STREAMLINE THE FLOW OF MATERIALS THROUGH 7. THE FLEXIBILITY OF MANUFACTURING
THE PLANT. OPERATIONS AND ARRANGEMENTS.
2. FACILITATE THE MANUFACTURING PROCESS. 8. PROVIDE FOR EMPLOYEE CONVENIENCE, SAFETY
3. MAINTAIN HIGH TURNOVER OF IN-PROCESS AND COMFORT.
INVENTORY. 9. MINIMIZE INVESTMENT IN EQUIPMENT.
4. MINIMIZE MATERIALS HANDLING AND COST. 10. MINIMIZE OVERALL PRODUCTION TIME.
5. EFFECTIVE UTILIZATION OF MEN, EQUIPMENT, AND 11. MAINTAIN FLEXIBILITY OF ARRANGEMENT AND
SPACE. OPERATION.
6. MAKE EFFECTIVE UTILIZATION OF CUBIC SPACE. 12. FACILITATE THE ORGANIZATIONAL STRUCTURE.

A GOOD LAYOUT ...

 Reduces bottlenecks in moving people or material.  Utilizes available space effectively and efficiently.
 Minimizes materials handling costs.  Provides ease of supervision.
 Minimizes overall production cycle time.  Facilitates coordination and face-to-face
 Maintain flexibility of arrangements. communication where appropriate.
 Reduces hazards to personnel, Increases morale.  Facilitate organization structure & manufacturing
 Utilizes labor efficiently. process.

FACTORS THAT INFLUENCE THE LAYOUT

Layouts are affected by types of industry, production systems, types of products, the volume of production, and types of
manufacturing processes used to get the final products.
Type of Industries: Synthetic process-based industry: In this, two or more materials are mixed to get a product, e.g. cement is
obtained from the combination of limestone and clay. Analytic process-based industry: Final products are obtained as a result of
breaking material into several parts. For example, petroleum products are obtained from the fractional distillation (breaking
process) of crude oil. Conditioning process-based industry: The form of raw material is changed into the desired products, e.g. jute
products in the jute industry, or the milk products in the dairy farm. Extractive process-based industry: By applying heat, the
desired product is extracted from the raw material, e.g. Aluminium from bauxite, and steel from iron ores.
Type of Production System: Continuous, Assembly Line, Batch, Job shop Production
Types of Products: Whether the PRODUCT is heavy or light, large or small, liquid or solid, Fragile or robust, etc.
The volume of Production: Whether the production is in small quantity, or lots or batches, or in huge quantity (mass
production).

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PRINCIPLES OF PLANT LAYOUT
Principle of integration: A good layout integrates men, materials, machines and supporting services, and others to get the
optimum utilization of resources and maximum effectiveness.
Principle of minimum distance: This principle is concerned with the minimum travel (or movement) of man and materials. The
facilities should be arranged such that, the total distance travelled by the men and materials should be minimum, and as far as
possible straight-line movement should be preferred.
Principle of cubic space utilization: The good layout utilizes both horizontal and vertical space. It is not only enough if only the
floor space is utilized optimally but the third dimension, i.e., the height is also to be utilized effectively.
Principle of flow: A good layout makes the materials move in a forward direction towards the completion stage, i.e., there should
not be any backtracking.
Principle of maximum flexibility: The good layout can be altered without much cost and time, i.e., future requirements should be
taken into account while designing the present layout.
Principle of safety, security, and satisfaction: A good layout gives due consideration to workers' safety and satisfaction and
safeguards the plant and machinery against fire, theft, etc.
Principle of minimum handling: A good layout reduces the material handling to the minimum.

BASIC LAYOUT TYPES

Product Layout or Flow Line Layout: Layout that uses standardized processing operations to achieve smooth, rapid, high-volume
flow e.g. Auto plants, cafeterias
Process Layout: Layout that can handle varied processing requirements e.g. Tool and die shops, university departments
Fixed Position Layout: Layout in which the product or project remains stationary, and workers, materials, and equipment are
moved as needed e.g. Building projects, disabled patients at hospitals
Combination Layouts: Cellular Layout

PRODUCT OR FLOW-LINE LAYOUT

A product layout is essentially one where the raw materials enter the line on one side and you keep on performing different
operations on it and finally, the finished product comes out on the other side.

The basic idea in product layout is that the

arrangement of a facility so that work centers
or equipment are in line to afford a specialized
sequence of tasks and machines and/or
workers are arranged by the sequence of
operations for a given product or service.

Product Layout is useful if you have a dedicated product to be produced on large scale and the layout applies to both
manufacturing and non-manufacturing operations.

PRODUCT LAYOUT FOR WINE MANUFACTURER

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CHARACTERISTICS-PRODUCT OR FLOW-LINE LAYOUT
 Smooth and logical flow lines.  Little operator skill, training simple.
 Small in-process inventories.  Simple production planning & control.
 Total production cycle time is short.  Less space is required for work in transit and
 Reduced material handling. temporary.

Advantages Disadvantages
◼ High volume ◼ Lacks flexibility in Volume, design, mix
◼ Low unit cost ◼ Boring for labor: Low motivation & Low worker
◼ Low labor skill needed enrichment
◼ Low material handling ◼ Cannot accommodate partial
◼ Low WIP shutdowns/breakdowns
◼ High efficiency and utilization ◼ Individual incentive plans are not possible
◼ Simple routing and scheduling ◼ Large Investment
◼ Simple to track and control

PROCESS LAYOUT
Essentially, a process layout is that in
which there are different departments
equipped with similar equipment
performing the same function within the
department but all different departments
perform different tasks & Material moves
from department to department to
change into the finished product.

Process layout applies to both

manufacturing and non-manufacturing
operations.

We can note that in process layout

 The arrangement of a facility or
department is grouped
according to its functional type.
 Similar pieces of equipment that
perform similar functions are
grouped. For example; all drill
machines are grouped and placed together.

A major problem in process layout is that a lot of processed/unprocessed material moves here & there from department to
department creating lots of confusion resulting longer production cycle.

CHARACTERISTICS-PROCESS LAYOUT
 Better utilization of machines & equipment, hence fewer equipment & machines required.
 Used for intermittent operations.
 Comparatively low investment in machines required.
 A high degree of flexibility concerning equipment or manpower allocation for a specified job.
 Greater job satisfaction for supervisor
 Applicable to both manufacturing and non-manufacturing operations.
 Specialized supervision is possible.

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ADVANTAGES
Flexibility: equipment and personnel can be used where they
are needed & a variety of products can be handheld.
Smaller investment in equipment: duplication is not necessary
unless the volume is large.
Expertise: supervisors for each department become an expert
in their functions
Diversity of tasks: changing work assignments makes work
more satisfying for people who prefer variety.
DISADVANTAGES
Lack of process efficiency: backtracking and long movements
may occur in the handling of materials.
Lack of efficiency in timing: workers must wait between tasks.
Complication: of production planning and control.
Cost: workers must have broad skills and must be paid higher
wages than assembly-line workers.
Lowered productivity: because each job is different it requires
different setups and operator training.

FIXED POSITION LAYOUT

Fixed-position layout refers to the arrangement of a facility so that the product stays in one location; tools, equipment & workers
are brought to it as needed. Both manufacturing and non-manufacturing operations of bulky or fragile products, e.g., ships and
planes may require this kind of layout.

ADVANTAGES
1. Reduces movement of work items; minimizes
damage or cost of moving.
2. More continuity of the assigned workforce (since the
item does not go from one department to another).
This reduces the problems of re-planning and
instructing people each time a new type of activity is
to begin.
DISADVANTAGES
1. Skilled and versatile workers are required.
2. The movement of people and equipment to and from
the work site may be expensive.
3. Equipment utilization may be low because the
equipment may be left at a location where it will be
needed again in a few days rather than moved to
another location where it would be productive.

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 PRODUCTION & OPERATIONS MANAGEMENT: FACILITY LAYOUT PLANNING

CELLULAR LAYOUTS
A cellular layout is a combination of process and product layouts, in which machines and personnel are grouped into cells
containing all the tools and operations required to produce a particular product or predictable family of products.

In cellular layout, we can identify machines that are grouped into a cell that can process items that have similar processing
requirements. A product layout is visible inside each cell. Each cell is designed to produce a part family. A part family is a set of
parts that require similar machinery, tooling, machine operations, and/or jigs and fixtures. The parts within the family normally
go from raw material to finished parts within a single cell.

Improving Layouts by Moving to the Cellular Manufacturing Concept

ADVANTAGES DISADVANTAGES
1. Reduced machine setup times 1. Volumes too low to justify highly efficient high
2. increased capacity volume equipment
3. economical to produce in smaller batch sizes 2. Vulnerable to equipment breakdowns
4. smaller batch sizes result in less WIP 3. Balancing work across cells
5. less WIP leads to shorter lead times
4. Does not offer the same high degree of customization
6. shorter lead times increase forecast accuracy and
provide a competitive advantage as the job shop
7. Parts produced in one cell
8. Capitalize on benefits of using worker teams
9. Minimal cost to move from job shop to cellular
production (e.g. EHC)
10. Can move from cellular production to “mini-plants”

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COMPARING LAYOUT: AN ILLUSTRATION

The simplest way for layout decisions would be to compare the total cost of the layouts at various levels of output.

Let us consider the following information about the three layouts

Layout Process Layout Cellular Manufacturing Product Layout

Fixed cost $125000 $275000 $550000
Variable cost $25 per unit $18 per unit $12.5 per unit

Based on the above information, let us calculate the total cost for all three layouts at the desired volume level of
10000,20000 and 30000 units

Layout Job shop Cellular Manufacturing Product Layout

Fixed cost $125000 $275000 $550000
Variable cost per unit $25 $18 $12.5
Total Cost at Volume Level 10000 125000+25*10000 275000+18*10000 550000+12.5*10000

=$375000 =$455000 =$675000

Total Cost at Volume Level 20000 125000+25*20000 275000+18*20000 550000+12.5*20000

=$625000 =$635000 =$800000

Total Cost at Volume Level 30000 125000+25*30000 275000+18*30000 550000+12.5*30000

=$875000 =$815000 =$925000

From the above table it is clear that

(I) At a volume level of 10000 units job shop is the best option as its total cost is a minimum of the three
options.
(II) At a volume level of 20000 units job shop is the best option as its total cost is minimum the three option.
(III) At a volume level of 30000 units, cellular Manufacturing is the best option as its total cost is the
minimum of the three options.

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 PRODUCTION & OPERATIONS MANAGEMENT: FACILITY LAYOUT PLANNING

The weekly total material handling cost of the layout will be given by

𝐷 𝐷

∑ ∑ 𝐶𝑖𝑗 𝑑𝑖𝑗 𝑋𝑖𝑗

𝑖=𝐴 𝑗=𝐴

where

Cij= Cost per unit per meter of moving material from ith to jth work area

Xij=Weekly number of units material moved from ith to jth work area

Dij=Distance (in meters) between ith to the jth work area

In our given case note that Cij=$1 per unit per meter, the Dijs and Xijs can be obtained from the given two grids, rest
of the calculation for weekly total material handling cost is worked out below:

From Work area To Work area Cij Dij Xij Cij*Dij*Xij

A B 1 4 800 3200
A C 1 9 700 6300
A D 1 7 400 2800
B C 1 6 300 1800
B D 1 8 200 1600
C D 1 10 600 6000
ΣΣCij*Dij*Xij 21700

Weekly total material handling cost=$21700

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 PRODUCTION & OPERATIONS MANAGEMENT: FACILITY LAYOUT PLANNING

LINE BALANCING
Write the steps of Line Balancing. From the table below, draw the 5 stations facility layout chart. If desired output rate is 3600
units/week then calculate the Cycle time, Idle time, and Theoretical minimum (# of stations) and Efficiency.
Work Stations Predecessor Time (sec)
A - 40
B A 30
C A 50
D B 40
E B 6
F C 25
G C 15
H D, E 20
I F, G 18
Solution:
STEPS FOR LINE BALANCING
Step 1: Specify the sequential relationship among the tasks using a precedence diagram by denoting tasks on nodes and using
arrow to denotes order of tasks
For given case the diagram is below:

D/40

B/30 H/20

E/6

A/40

F/25

C/50 I/18

G/15

Step 2: Determine the required workstation cycle time

Cycle time can be obtained by the formula
1
𝐶𝑦𝑐𝑙𝑒 𝑇𝑖𝑚𝑒 =
𝐷𝑒𝑠𝑖𝑟𝑒𝑑 𝑂𝑢𝑡𝑝𝑢𝑡 𝑅𝑎𝑡𝑒
Since our desired output rate is 3600 units/week hence assuming 7 days working week and 8 hour production time
1 1 1 1
𝐶𝑦𝑐𝑙𝑒 𝑇𝑖𝑚𝑒 = = = 𝑤𝑒𝑒𝑘𝑠 = × 7 × 8 × 60 × 60 𝑠𝑒𝑐𝑜𝑛𝑑𝑠 = 56 𝑠𝑒𝑐𝑜𝑛𝑑𝑠
𝐷𝑒𝑠𝑖𝑟𝑒𝑑 𝑂𝑢𝑡𝑝𝑢𝑡 𝑅𝑎𝑡𝑒 3600 𝑝𝑒𝑟 𝑤𝑒𝑒𝑘 3600 3600

𝑪𝒚𝒄𝒍𝒆 𝑻𝒊𝒎𝒆 = 𝟓𝟔 𝒔𝒆𝒄𝒐𝒏𝒅𝒔

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 PRODUCTION & OPERATIONS MANAGEMENT: FACILITY LAYOUT PLANNING
Step 3: Determine the theoretical minimum number of work stations
Theoretical minimum number of stations are given by
𝑇𝑜𝑡𝑎𝑙 𝑇𝑖𝑚𝑒 𝑜𝑓 𝑎𝑙𝑙 𝑇𝑎𝑠𝑘𝑠
𝑇ℎ𝑒𝑜𝑟𝑒𝑡𝑖𝑐𝑎𝑙 𝑀𝑖𝑛𝑖𝑚𝑢𝑚 𝑁𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑆𝑡𝑎𝑡𝑖𝑜𝑛𝑠 =
𝐶𝑦𝑐𝑙𝑒 𝑡𝑖𝑚𝑒
40 + 30 + 50 + 40 + 6 + 25 + 15 + 20 + 18
𝑇ℎ𝑒𝑜𝑟𝑒𝑡𝑖𝑐𝑎𝑙 𝑀𝑖𝑛𝑖𝑚𝑢𝑚 𝑁𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑆𝑡𝑎𝑡𝑖𝑜𝑛𝑠 =
56
= 5 (𝑟𝑜𝑢𝑛𝑑𝑒𝑑 𝑡𝑜 𝑛𝑒𝑥𝑡 𝑖𝑛𝑡𝑒𝑔𝑒𝑟)
Hence,
Theoretical Minimum Number of Stations=5 stations

Step 4: Decide a primary rule for assigning tasks to work station and secondary rule for breaking time.
Your priority rule may be: Longest Work Elements, Most Followers Work Elements, Shortest Work Elements, fewest Followers
Work Elements
In current case, I am taking “longest task time first” as primary rule and highest number of following tasks as secondary rule for
allocation of tasks to work station.

Step 5: Assigning task to work stations one by one as per rule of step 4 sequentially from station 1 to the last station.
A task goes to the next station if it cannot be accommodated at the current station due longer task time than the time left to
reach the cycle time at current station. Every time a task is assigned, recreate the list of feasible tasks that can be started now.
Repeat the process for all workstations until finished.
The same is shown in the table below for the given case:
Station Task (Allocate Task Time left at Available to Start Tasks (Refer
longest first from Time Station=CT- precedence Chart: Note that a task will
Available to Start ∑Allocated Tasks to be available to start its all predecessors
Tasks in case of Station have been finished)
tie, choose with
highest number
of successor)
CT=56 A
1 A 40 56-40=16 B, C( But Time Left< Task time for all
Tasks Available to Start hence start new
station)
2 C 50 56-50=6 B, F, and G ( But Time Left< Task time for
all Tasks Available to Start hence start new
station)
3 B 30 56-30=26 D, E, F, G ( D can not be accommodated
here so we try to accommodate next
longest task F)
3 F 25 56-30-26=1 D, E, G ( But Time Left< Task time for all
Tasks Available to Start hence start new
station)
4 D 40 56-40=16 E, G
4 G 15 56-40-15=1 E, I ( But Time Left< Task time of E hence
start new station)
5 I 18 56-18=38 E
5 E 6 56-18-6=32 H
5 H 20 56-18-6-20=12

Step 6: Minimize the idle time for stations and decrease the cycle time and compute the output level based on new cycle time
further compute the efficiency of the assembly line
Now, as we can see the minimum of time left at stations is 1 for station 3 and 4 hence, we can reduce our cycle time to 56-1=55
seconds without increasing the number of stations and in that case time left at every station will get reduced by 1 second and
these will be as follows:

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 PRODUCTION & OPERATIONS MANAGEMENT: FACILITY LAYOUT PLANNING

Station Task (Allocate longest first from Available to Task Time left at Station=CT-∑Allocated
Start Tasks in case of tie choose with Time Tasks to Station
highest number of successor)
CT=55
1 A 40 55-40=16
2 C 50 55-50=5
3 B 30 55-30=25
3 F 25 55-30-26=0
4 D 40 55-40=15
4 G 15 55-40-15=0
5 H 20 55-20=35
5 I 18 55-20-18=17
5 E 6 55-20-18-6=11
So the alocation of tasks to stations are as below:

Station 4

Station 3 Station 5
D/40

H/20
B/30

Station 1
F/25 E/6
A/40

I/18
Station 2

C/50 G/15

The Idle time/cycle will be given by

idle time/cycle=Sum of Time Left Unused based on New Cycle Time=16+11=27 seconds
Hence
The idle time/cycle=27 Seconds
The output based on new cycle time will be given by
𝑷𝒓𝒐𝒅𝒖𝒄𝒕𝒊𝒐𝒏 𝑻𝒊𝒎𝒆 𝟕 ∗ 𝟖 ∗ 𝟔𝟎 ∗ 𝟔𝟎 𝒔𝒆𝒄𝒐𝒏𝒅𝒔
𝑶𝒖𝒕𝒑𝒖𝒕 = = = 𝟑𝟔𝟔𝟓𝒖𝒏𝒊𝒕𝒔
𝑪𝒚𝒄𝒍𝒆 𝑻𝒊𝒎𝒆 𝟓𝟓 𝑺𝒆𝒄𝒐𝒏𝒅𝒔
Efficiency of the assembly line can be computed as below:
𝑺𝒖𝒎 𝒐𝒇 𝑻𝒂𝒔𝒌𝒔 𝑻𝒊𝒎𝒆 𝟐𝟒𝟒
𝑬𝒇𝒇𝒊𝒄𝒊𝒆𝒏𝒄𝒚 = = = 𝟖𝟖. 𝟕𝟑%
𝑨𝒄𝒕𝒖𝒂𝒍 𝒏𝒖𝒎𝒃𝒆𝒓 𝒐𝒇 𝒘𝒐𝒓𝒌 𝒔𝒕𝒂𝒕𝒊𝒐𝒏𝒔 ∗ 𝑪𝒚𝒄𝒍𝒆 𝒕𝒊𝒎𝒆 𝟓 ∗ 𝟓𝟓

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Illustration: Prior to launching a new model, a manufacturing company needs to set up a new flow line which will
produce 1100 products per day. The manufacturer operates 24 hours per day. The assembly information for the new
product is outlined in the table

a) Calculate the maximum cycle time.

b) Calculate the theoretical minimum number of work-stations.

c) Produce the precedence diagram.

d) Produce the line design which achieves the required cycle time.

e) Calculate the idle time/cycle and the output level based upon the new cycle time produced in (d)

Solution:

(a)

Maximum Cycle time can be obtained by the formula

1
𝐶𝑦𝑐𝑙𝑒 𝑇𝑖𝑚𝑒 =
𝐷𝑒𝑠𝑖𝑟𝑒𝑑 𝑂𝑢𝑡𝑝𝑢𝑡 𝑅𝑎𝑡𝑒

Since our desired output is 1100 products a day and a day consist of 24 Hours =24*60*60=86400 Seconds hence desired
output rate=1100/86400=(11/864) products per second hence

1 1
𝐶𝑦𝑐𝑙𝑒 𝑇𝑖𝑚𝑒 = = = 78. 5̇4̇ 𝑠𝑒𝑐𝑜𝑛𝑑𝑠
𝐷𝑒𝑠𝑖𝑟𝑒𝑑 𝑂𝑢𝑡𝑝𝑢𝑡 𝑅𝑎𝑡𝑒 11/864

𝑀𝑎𝑥𝑖𝑚𝑢𝑚 𝐶𝑦𝑐𝑙𝑒 𝑇𝑖𝑚𝑒 = 78. 5̇4̇ 𝑠𝑒𝑐𝑜𝑛𝑑𝑠

(b)

Theoretical minimum number of stations are given by

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 PRODUCTION & OPERATIONS MANAGEMENT: FACILITY LAYOUT PLANNING
Total Time of all Tasks
Theoretical Minimum Number of Stations =
Cycle time

Theoretical Minimum Number of Stations

42 + 19 + 20 + 35 + 17 + 19 + 20 + 30 + 25 + 65 + 30 + 46 + 58
=
78. 5̇4̇
= 6 (rounded to next integer)

Hence,

Theoretical Minimum Number of Stations=6 stations

(c)Precedence Diagram

B
19

A C G K
42 20 20 30

M
F J 58
19 65

D L
35 46
E H I
17 30 25

(d)Designing Line to achieves the required cycle time: The line can be designed with six stations based on LPT

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Now, as we can see the minimum of time left at stations is 0.54545 for station 2 hence we can reduce our cycle time to
78.54545-0.54545=78 seconds without increasing the number of stations and in that case time left at every station will
get reduced by 0.54545 seconds and these will be as follows:

Thus, Tasks A and Task D are allocated to station 1. Tasks, C, B, G, and F are allocated to station 2, Tasks E, H, and I are
allocated to station 3, Task J alone to station 4, Tasks L & K are allocated to station 5, and Task M to station 6.

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 PRODUCTION & OPERATIONS MANAGEMENT: FACILITY LAYOUT PLANNING

Station 2
B
19
Station Station 5
1

A C G K
42 20 20 30
Station
Station 6
4
M
F J 58
19 65

D L
35 Station 3 46
E H I
17 30 25

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