MEE1018

FACILITIES AND PROCESS PLANNING

Dr. Raviteja Buddala
Asst. Prof. Sr.
SMEC, VIT University
raviteja.buddala@vit.ac.in
 MODULE 1

Facilities Planning
 Introduction to facilities Planning
 Significance of Facilities Planning
 Objectives of Facilities Planning
 Facilities Planning Process
 Strategic Facilities Planning
 Developing Facilities Planning Strategies

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“The plan is nothing, but planning is everything.” – Dwight Eisenhower

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 Definition of Planning

Thinking in advance, what is to be done, when it is to be done, how it is to be done,

and by whom it should be done

3 WWW – What? When? Whom ?

1 H – How?
Definition:
Formulating an action plan to achieve objectives and targets.
Where we are ?
Where we want to reach ?
 Features / Characteristics of Planning

 Planning contributes to Objectives

 Planning is primary function of management
 Pervasive (Spread widely)
 Planning is futuristic/ forward looking
 Planning is continuous
 Planning involves decision making
 Planning is a mental exercise

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 Importance of Planning

 Planning provides direction

 Planning reduces the risk of uncertainties
 Planning reduces overlapping and wasteful activities
 Planning promotes innovative ideas
 Planning facilitates decision making
 Planning focuses attention on objectives of the company

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 Limitations of Planning

 Planning leads to rigidity

 Planning may not work at dynamic environment
 Planning reduces creativity
 Planning involves huge cost
 Planning is a time consuming process
 Planning does not guarantee success

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 Production?

The processes and methods used to transform tangible inputs (raw materials, semi-
finished goods, subassemblies) and intangible inputs ideas, information, knowledge)
into goods or services.

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 Production and Manufacturing
In production, the raw material is not procured Manufacturing, the company procures the raw
from outside, the company owns it and after material from outside, and then makes the final
processing they make the final product. product.

Production is a process of converting inputs in to Manufacturing is a process of converting raw

outputs. material in to finished product by using various
processes, machines and energy.
It is a narrow term.
It is a broader term.

Every type of manufacturing is production. But,

every production is not a manufacturing.

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 Production System
The main objective of production system is to produce the goods and services
required for the customers in the most efficient and economical way.

Inputs Transformation Outputs

• Men (Conversion Process) Goods or Services
• Material
• Machine
• Money

Feedback Information

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 Steps for Engineering Design Process

• Define problem
• Analyse the problem
• Generate alternatives
• Evaluate the alternatives
• Select the preferred design
• Implement the design

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 Facilities

Facilities can be broadly defined as buildings where people, material, and

machines come together for a stated purpose – typically to make a tangible
product or provide a service.

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 Facilities

The facility must be properly managed to achieve its stated purpose while
satisfying several objectives.

Such objectives include producing a product or providing a service

• at lower cost,

• at higher quality,

• or using the least amount of resources.

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 Facilities Planning & Design

Manufacturing and Service companies spend a significant amount of time and

money to design or redesign their facilities. This is an extremely important issue
and must be addressed before products are produced or services are rendered.

A poor facility design can be costly and may result in:

o Poor quality products,
o Low employee morale,
o Customer dissatisfaction.
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 Applications of Facilities Planning (FP)

Facilities Planning (FP) can be applied

• a retail store,
to planning of:
• a dormitory (a large bedroom for more
• a new hospital,
peoples in an institution or school),
• an assembly department,
• a bank,
• an existing warehouse,
• an office,
• the baggage department in an airport,
• a cinema,
• department building of IE,
• a parking lot,
• a production plant,

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 Facilities Planning

Facilities Planning (FP) determines how an activity’s tangible fixed assets best
support in achieving the activity’s objectives.

i.e.

What is the objective of the facility?

How the facility achieves that objective?

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 Facilities Planning Hierarchy

Facilities
Location

Facilities Facilities
Planning Systems Design

Facilities Design Layout Design

Handling System
Design

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 Facilities Planning Hierarchy…

Facilities Location (Macro Aspect of FP):

Location of the facility refers to its placement with respect to customers,
suppliers, and other facilities with which it interfaces.

Facilities Design (Micro Aspect of FP):

Design components of a facility consists of the facility systems, the layout and the
handling systems.

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 Facilities Planning Hierarchy…
Facilities Systems:

Consists of the structural systems, the atmospheric systems, the

lighting/electricity/communication systems, the life safety systems and the
sanitation systems.
Layout:

Consists of all equipment, machinery and furnishings within the building.

Handling Systems:

Consists of the mechanism need to satisfy the required facility interactions.

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 Example - a manufacturing system

• Facility Systems – the structure (of building), power,

light, gas, heat, ventilation, air-conditioning, water
and sewage needs.
• Layout – the production areas, related support areas,
personnel areas.
• Handling Systems – the materials- personnel,
information, and equipment to support
manufacturing
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 Facilities Planning Hierarchy…

Facilities Planner considers the facility as a dynamic entity.

Although facility is planned only once, it is frequently re-planned to synchronize the
facility and its constantly changing objectives. (example - nokia and motorola)

Planning and Re-planning are linked by the continuous improvement FP cycle

Therefore continuous improvement is an integral element of FP cycle.

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Continuous Improvement FP Cycle

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 Significance of Facilities Planning

To understand the significance of Facilities Planning (FP) consider the following

questions:

1. What impact does facilities planning have on handling and maintenance cost?
2. What impact does facilities planning have on employee morale, and how does
employee morale impact operating costs?

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 Significance of Facilities Planning …

3. In what do organizations invest the majority of their capital, and how

convertible is their capital once invested?

4. What impact does facilities planning have on the management of a facility?

5. What impact does facilities planning have on facility’s capability to adapt to
change and satisfy future requirements?

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 Objectives of Facilities Planning

Objectives of FP is to plan a facility that achieves both facilities location and

design objectives.

Objective of Industrial Facility Location is to determine the location which

considers all factors affecting deliver-to-customers, cost of the products to be
manufactured and availability of raw materials.

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 Typical Facilities Design Objectives

1. Support the organization’s vision through improved material handling,

material control, and good housekeeping.

2. Effectively utilize people, equipment, space and energy.

3. Be adaptable and promote ease of maintenance.

4. Provide employee safety and job satisfaction.

5. Maximize return on investment (ROI) on all capital expenditures

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 General objectives of Facilities Planning

• Improve customer satisfaction by conforming to customer

promises and responding to customer needs
• Increase return on assets (ROA)
• Maximize speed for quick customer response
• Reduce unnecessary costs and grow the supply chain
profitability
• Integrate supply chain through partnerships and
communications
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 Steps for Facilities Planning Process
Applying the engineering design process to facilities planning results in the
following process:

1. Define (or redefine) the objective of the facility,

2. Specify the primary and support activities to be performed in accomplishing
the objective.

Requirements in terms of:

• Operations • Personnel • Equipment • Material flows involved.

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 Facilities Planning Process…

3. Determine the interrelationships among all activities

4. Determine the space requirements for all activities

5. Generate alternative facilities plans

6. Evaluate alternative facilities plans (alternative locations and alternative designs)

7. Select a facilities plan

8. Implement the facilities plan

9. Maintain and adapt the facilities plan

10. Redefine the objective of the facility

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Five elements that forms an organizations model of success
• Vision – A description of where you are headed
• Mission – How to accomplish the vision
• Requirement of success – The science of your business
• Guiding principles – The values to be used while pursuing the
vision
• Evidence of success – Measurable results that will demonstrate
when an organization is moving towards its vision

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Steps for winning facilities planning process
Steps for winning facilities planning process

• Understand the organization model of success

• Understand external issues
• Understand internal issues
• Establish facilities planning design criteria
• Obtain organizational commitment
• Establish teams
• Assess present status
• Identify specific goals
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Steps for winning facilities planning process cont…

• Identify alternative approaches

• Evaluate alternative approaches
• Define improvement plans
• Obtain support for improvement plans
• Implement plans
• Audit results

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 Strategic Planning
Andrew J DuBrin defines Strategy “as the organizations plan or comprehensive
program, for achieving its vision, mission and goals”.

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 Strategic Planning

• Business strategies can be defined as ‘‘the art

and science of employing the resources of a
firm to achieve its business objectives’’

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 Strategic Planning
Vision A description of where you are headed.
Mission how to accomplish the vision

Objectives are goals/ends towards which activities of an organization are directed.

Policies are guidelines for managerial decision making

Procedures are detailed specifications describing how work is to be done

Programs are precise plans for single, one time use.

Strategy is the game plan for achieving the company’s long-term objectives.
(Example: Colgate company)
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Strategic Planning

Considering the process of planning and

designing a manufacturing facility,
building it, installing and using the
equipment, the costs of design changes
increase exponentially as a project
moves beyond the planning and
designing phases

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 Strategic Planning
Strategic Planning is a special type of planning, which is frequently used in
politics, sports, war, and business.

Business strategies can be defined as the art and science of employing the
resources of a firm to achieve its business objectives.
The resources that are available are marketing resources, manufacturing resources,

and distribution resources. Hence, marketing strategies, manufacturing

strategies, and distribution strategies can be developed to support the achievement

of the business objectives.
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 Strategic Planning
In a real sense, facilities planning is itself a strategic process and must be an
integral part of overall corporate strategy.
Strategies are needed for functions such as marketing, manufacturing, distribution,

purchasing, facilities, material handling, and data processing/information systems

among others.

It is important to recognize that each strategy is multidimensional. Namely, each

must support or contribute to the strategic plan for the entire organization.
Furthermore, each must have its own set of objectives, strategies and tactics.
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 Strategic Planning
Marketing decisions affect the location of facilities and the handling systems
design. For example, material handling will be affected by decisions related to unit
volume, product mix, packaging, service levels for spares, and delivery times.

Product development and design decisions affect processing and materials

requirements, which in turn affect layout and material handling. Changes in
materials, component shapes, product complexity, number of new part numbers
and package sizes introduced, stability of product design, and the number of
products introduced will affect the handling, storage, and control of materials.

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 Strategic Planning
Manufacturing decisions will have an impact on both facilities location and facilities
design. Decisions concerning the degree of vertical integration, types and levels of
automation, types and levels of control over tooling and work-in-process, plant sizes,
and general-purpose versus special-purpose equipment can affect the location and
design of manufacturing and support facilities.

Production planning and inventory control decisions affect the layout and handling
system. Lot size decisions, production scheduling, in-process inventory requirements,
inventory turnover goals, and approaches used to deal with seasonal demand affect
facilities plan.
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 Strategic Planning
Human resources and finance decisions related to capital availability, labour skills
and stability, staffing levels, inventory investment levels, organization design, and
employee services and benefits will impact the size and design of facilities, as
well as their number and location. Space and flow will be affected by financial
and human resources decisions; in turn, they have an impact on the storage,
movement, protection, and control of material.

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 Developing facilities planning strategies
• Strategies are needed for such functions as marketing,
manufacturing, distribution, purchasing, facilities, material
handling and data processing/information systems, among
others.
• Each functional strategic is multidimensional

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 Developing facilities planning strategies
• Three potential dimensions for improvement
1. Physical aspects of facilities planning – e.g. buildings,
equipment and people
2. Control aspects – e.g. Space standards, material control,
stock locator systems and productivity measures
3. Time aspects – Time for planning and to do it right

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 Developing facilities planning strategies

• Facilities plan must support changes in manufacturing

technology.
• Facilities plan must support a distribution plan (loading,
unloading, automated storage & automated guided-vehicle
system)

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 Developing facilities planning strategies
The following issues may have long range impact on the strategic facilities
plan
1. Number, location and size of warehouses and /or distribution centers
2. Centralized versus decentralized storage of raw materials, work-
in-process inventory and finished goods
3. Acquisition of existing facilities versus design of modern factories and
distribution centers of the future
4. Flexibility required because of market and technological uncertainties
5. Interface between storage and manufacturing
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 Developing facilities planning strategies
6. Level of vertical integration, including “subcontract versus manufacture”
decisions
7. Control systems, including material control and equipment control, as well
as level of distributed processing
8. Movement of material between buildings and between sites
9. Changes in customers and supplier technology as well as a firms own
manufacturing technology and material movement, protection, storage and
control technology
10. Design-to-cost goals for facilities
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