Plant layout analysis

Layout planning is determining the best physical arrangement of resources within a

facility
 The Strategic Importance of Layout Decisions

• Layout is one of the key decisions that determines the long-run efficiency of
operations.

• Layout has strategic implications because it establishes an organization’s

competitive priorities -capacity, processes, flexibility, and cost, as well as quality
of work life, customer contact, and image.

• An effective layout can help an organization achieve a strategy that supports

differentiation, low cost, or response.
Why is layout planning is important?

• Eliminates unnecessary costs for space and

materials handling
• Reduces work-in-process inventory
• Produces goods and services faster
• Reduces distances that workers must travel in the
workplace
• Improves communication and morale
• Increases retail sales
• Improves brand image
Factors affecting Plant Layout
• The final solution for a Plant Layout has to take into account a balance
among the characteristics and considerations of all factors affecting
plant layout, in order to get the maximum advantages.
• The factors affecting plant layout can be grouped into 8 categories:
• Materials
• Machinery
• Labor
• Material Handling
• Waiting Time
• Auxiliary Services
• The building
• Future Changes
Factors affecting Plant Layout
• The factors affecting plant layout can be grouped into 8
categories:
• Materials
• The layout of the productive equipment will depend on the
characteristics of the product to be managed at the facility, as well
as the different parts and materials to work on.
• Main factors to be considered: size, shape, volume, weight, and the
physical-chemical characteristics, since they influence the
manufacturing methods and storage and material handling
processes.
• The sequence and order of the operations will affect plant layout as
well, taking into account the variety and quantity to produce.
Factors affecting Plant Layout
• The factors affecting plant layout can be grouped into 8
categories:
• Machinery
• Having information about the processes, machinery, tools and
necessary equipment, as well as their use and requirements is
essential to design a correct layout.
• The methods and time studies to improve the processes are closely
linked to the plant layout.
• Regarding machinery, we have to consider the type, total available
for each type, as well as type and quantity of tools and equipment.
• It’s essential as well to know about space required, shape, height,
weight, quantity and type of workers required, risks for the
personnel, requirements of auxiliary services, etc.
Factors affecting Plant Layout
• The factors affecting plant layout can be grouped into 8
categories:
• Labor
• Labor has to be organized in the production process (direct labor,
supervision and auxiliary services).
• Environment considerations: employees’ safety, light conditions,
ventilation, temperature, noise, etc.
• Process considerations: personnel qualifications, flexibility, number
of workers required at a given time as well as the type of work to be
performed by them.
• Material Handling
• Material handling does not add value to the product; it’s just waste.
• Objective: Minimize material handling as well as combining with
other operations when possible, eliminating unnecessary and costly
movements.
Factors affecting Plant Layout
• The factors affecting plant layout can be grouped into 8
categories:
• Waiting time - Stock
• Objective: Continuous Material Flow through the facility, avoiding
the cost of waiting time and demurrages that happen when the flow
stops.
• On the other hand, the material waiting to flow through the facility
not always represents a cost to avoid. As stock sometimes provides
safety to protect production, improving customer service, allowing
more economic batches, etc.
• It’s necessary then to consider space for the required stock at the
facility when designing the layout.
• Resting time to cool down or heating up…
Factors affecting Plant Layout
• The factors affecting plant layout can be grouped into 8
categories:
• Auxiliary Services
• Support the main production activities at the plant:
• Related to labor: Accessibility paths, fire protection installations,
supervision, safety, etc.
• Related to material: quality control.
• Related to machinery: maintenance and electrical and water lines.
• The auxiliary services represent around 30% of the space at a facility.
• The space dedicated to auxiliary services is usually considered as
waste.
• It’s important to have efficient services to insure that their indirect
costs have been minimized.
Factors affecting Plant Layout
• The factors affecting plant layout can be grouped into 8
categories:
• The building
• If it has been already selected, its characteristics will be a constraint
at the moment of designing the layout, which is different if the
building has to be built.
• Future changes
• One of the main objectives of plant layout is flexibility.
• It’s important to forecast the future changes to avoid having an
inefficient plant layout in a short term.
• Flexibility can be reached keeping the original layout as free as
possible regarding fixed characteristics, allowing the adjustment to
emergencies and variations of the normal process activities.
• Possible future extensions of the facility must be taken into account,
as well as the feasibility of production during re-layout.
What conditions should a layout meet?

In all cases, layout design must consider how to achieve the following:

◆ Higher utilization of space, equipment, and people

◆ Improved flow of information, materials, and people

◆ Improved employee morale and safer working conditions

◆ Improved customer/client interaction

◆ Flexibility (whatever the layout is now, it will need to change)

Types of Layout

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. Fixed-position layout: Addresses the layout requirements of large,
bulky projects such as ships and buildings.
5. Process-oriented layout: Deals with low-volume, high-variety
production (also called “job shop,” or intermittent production).
6. Work-cell layout: Arranges machinery and equipment to focus on
production of a single product or group of related products.
7. Product-oriented layout: Seeks the best personnel and machine
utilization in repetitive or continuous production.
Layout strategies
Office Layout
Office layouts require the grouping of workers, their equipment, and spaces to
provide for comfort, safety, and movement of information. The main distinction of
office layouts is the importance placed on the flow of information. Office layouts are
in constant flux as the technological changes sweeping society alter the way offices
function.

Even though the movement of information is increasingly electronic, analysis of

office layouts still requires a task-based approach. Managers therefore examine
both electronic and conventional communication patterns, separation needs, and
other conditions affecting employee effectiveness.

A useful tool for such an analysis is the relationship chart

 Relationship chart

It can help in choosing with offices should be close to each other

◆ Proximity : Spaces should naturally bring people together.
◆ Privacy : People must be able to control access to their conversations.

◆ Permission : The culture should signal that nonwork interactions are encouraged.

Antidotal example

When Deloitte & Touche found that 30% to 40% of desks were empty at any given
time, the firm developed its “hoteling programs.” Consultants lost their
permanent offices; anyone who plans to be in the building (rather than out with
clients) books an office through a “concierge,” who hangs that consultant’s name
on the door for the day and stocks the space with requested supplies.
Jay_Heizer,_Barry_Render,_Chuck_Munson_Operations_Management_Sustainability_and_Supply_Chain_Management
_12th_Edition
Retail Layout
Retail layouts are based on the idea that sales and profitability vary directly with
customer exposure to products. Thus, most retail operations managers try to
expose customers to as many products as possible. Studies do show that the
greater the rate of exposure, the greater the sales and the higher the return on
investment.
objective of retail layout is to maximize profitability per square foot of floor space
Five ideas are helpful for determining the overall arrangement of many stores:

1. Locate the high-draw items around the periphery of the store. Thus, we tend to find
dairy products on one side of a supermarket and bread and bakery products on
another. An example of this tactic is shown in Figure.
2. Use prominent locations for high-impulse and high-margin items. Best Buy puts fast
growing, high-margin digital goods—such as cameras and printers—in the front and
center of its stores.
3. Distribute what are known in the trade as “power items”—items that may dominate a
purchasing trip—to both sides of an aisle, and disperse them to increase the viewing of
other items.
4. Use end-aisle locations because they have a very high exposure rate.
5. Convey the mission of the store by carefully selecting the position of the lead-off
department.

Walmart’s push to increase sales of clothes means those departments are in broad
view upon entering a store.
Warehouse and Storage
Layouts
The objective of warehouse layout is to find the optimum trade-off between handling
cost and costs associated with warehouse space . Consequently, management’s
task is to maximize the utilization of the total “cube” of the warehouse—that is,
utilize its full volume while maintaining low material handling costs.
Fixed-Position Layout
In a fixed-position layout , the project remains in one place, and workers and equipment
come to that one work area. Examples of this type of project are a ship, a highway, a
bridge, a house, and an operating table in a hospital operating room.
Process-Oriented Layout
A process-oriented layout can simultaneously handle a wide variety of products or
services. This is the traditional way to support a product differentiation strategy. It is
most efficient when making products with different requirements or when handling
customers, patients, or clients with different needs.

A process-oriented layout is typically the low-volume, high-variety.

Work Cells
A work cell reorganizes people and machines that would ordinarily be dispersed in
various departments into a group so that they can focus on making a single product
or a group of related products
 The ground floor plan of a department store
showing the sports goods shop-within-a-shop
retail ‘cell’

Books
and
videos Footwear Sports shop Menswear

Perfume
& jewellery

Confectionery, Elevators
newspaper,
magazines and Women’s clothes
stationery

Luggage
and gifts
Entrance
Cellular work arrangements are used when volume warrants a
special arrangement of machinery and equipment.

These work cells are reconfigured as product

designs change or volume fluctuates. The advantages of work cells are:
1. Reduced work-in-process inventory because the work cell is set up to provide
one-piece flow from machine to machine.
2. Less floor space required because less space is needed between machines to
accommodate work-in-process inventory.
3. Reduced raw material and finished goods inventories because less work-in-
process allows more rapid movement of materials through the work cell.
4. Reduced direct labor cost because of improved communication among
employees, better material flow, and improved scheduling.
5. Heightened sense of employee participation in the organization and the
product: employees accept the added responsibility of product quality because it
is directly associated with them and their work cell.
6. Increased equipment and machinery utilization because of better scheduling
and faster material flow.
7. Reduced investment in machinery and equipment because good utilization
reduces the number of machines and the amount of equipment and tooling.

Group technology is used often

Repetitive and Product-Oriented Layout
Product-oriented layouts are organized around products or families of similar high-
volume, low-variety products. Repetitive production and continuous production,
use product layouts.

The assumptions are that:

1. Volume is adequate for high equipment utilization
2. Product demand is stable enough to justify high investment in specialized
equipment
3. Product is standardized or approaching a phase of its life cycle that justifies
investment in specialized equipment
4. Supplies of raw materials and components are adequate and of uniform quality (
adequately standardized) to ensure that they will work with the specialized
equipment

Two types of a product-oriented layout are fabrication and assembly lines.

 An army induction centre with uses
product layout

Waiting Waiting
Lecture theatre area area

Blood
Doctor Doctor test
Uniform X-ray Record
issuing personal
area history and
Blood medical
Doctor Doctor test details
X-ray

Blood
Doctor Doctor test
Uniform
store X-ray
 A restaurant complex with all four basic
layout types
Line layout cafeteria

Cell layout buffet

Fixed-position layout
service restaurant

Desert

Starter
buffet

buffet
Main course
buffet Service line
Preparation

Oven
Process layout kitchen
Cool room
Freezer Vegetable prep Grill
 Volume-variety relationship
Flow is Low High
Volume
intermittent

High
Fixed-position
layout

Regular flow more feasible

Process
layout
Variety

Cell layout

Product
layout

Flow
Low

becomes
continuous
Regular flow more important
Underlying Process Relationship Between
Volume and Standardization Continuum

© Wiley 2010 35 35
 2) Advantages and disadvantages

Fixed Process Cell Product

- Very high mix - High mix and - Good compromise Lo- w unit costs for high
position
and product layout
product flexibility betweenlayout
cost and layout
volume
layout
flexibility flexibility
- Product/customer - Relatively robust - Fast throughput. - Gives Opportunities
not moved or if in the case of for specialization of
disturbed. disruptions equipment
- Group work can
Advantages - High variety of - Easy supervision
result in good
- Gives Opportunities
tasks for staff of equipment of for specialization of
plant motivation equipment

Low utilization of Can be costly to

resources. rearrange existing Can have low mix and
- Very high unit cost. layout flexibility
Can have very high Not very robust to
Can need more plant
Disadvantages WIP
and equipment disruption
- Scheduling space
and activities can be
difficult. Complex flow. Work can be very
repetitive.
 (a) The basic layout types have different fixed and
variable cost characteristics which seem to determine
which one to use. (b) In practice the uncertainty about
the exact fixed and variable costs of each layout means
the decision can rarely be made on cost alone
(a) (b)
Costs

Costs
Fixed-position

Process

Cell

Product

Use Use Use Use ? ? ? ?

fixed- process cell product
position
Volume Volume
Use product
Use cell or product
Use process or cell or product
Use process or cell
3) Consider total cost Use process
Use fixed-position or process
Use fixed-position
Numerical
DEVELOPING A PRECEDENCE DIAGRAM FOR AN ASSEMBLY LINE

Boeing wants to develop a precedence diagram for an

electrostatic wing component that requires a total
assembly time of 65 minutes.

Precedence Data for Wing Component

The diagram helps structure an assembly line and workstations, and it makes it
easier to visualize the sequence of tasks.
 Cycle time= Production time available per day/Units required per day

Minimum number of workstations= sum of (Time for task i)/Cycle time

Balance the line by assigning specific assembly tasks to each workstation. An

efficient balance is one that will complete the required assembly, follow the
specified sequence, and keep the idle time at each workstation to a minimum.
On the basis of the precedence diagram and activity times given in Example 3 ,
Boeing determines that there are 480 productive minutes of work available per day.
Furthermore, the production schedule requires that 40 units of the wing component
be completed as output from the assembly line each day. It now wants to group the
tasks into workstations.
Efficiency = sum (Task times)/
(Actual number of workstations) * (Largest assigned cycle time)

Idle time = (Actual number of workstations × Largest assigned cycle time) - Σ Task
times

Boeing needs to calculate the efficiency

Efficiency= 65 minutes/(6 station X 12 minutes)= 65/ 72= 0.92= 90 %

Seventh workstation would reduce the efficiency to 77.4 % (calculate)

The assembly line whose activities are shown in Figure has an 8-minute cycle
time. Draw the precedence graph, and find the minimum possible number of
one-person workstations.

Then arrange the work activities into workstations so as to balance

the line. What is the efficiency of your line balance?
Four-Station Solution to the
Line-Balancing Problem

The theoretical minimum number of workstations is:

Sum of (ti )/Cycle time = 28 minutes/8 minutes
= 3.5, or 4 stations

Efficiency = Total task time/ (Actual number of workstations) * (Largest

assigned cycle time)= 28/(4)(8) = 87.5%
Thanks