C5 - Facility Location and Facility Layout

OPERATION MANAGEMENT
C5. Facility Location and Facility layout

Instructor: MBA. Nguyen Danh Ha Thai. Email: thaindh@hcmute.edu.vn
Office: A1-307 Zalo: 0906 613 813
1
thaindh@hcmute.edu.vn
Operation 5A - Facilities
Management Design
2 2
Operation
Management Facility Layout
3 4
Objectives of Facility Layout
Facility layout refers to the arrangement of activities,
processes, departments, workstations, storage areas, aisles,
and common areas within an existing or proposed facility.
Facility layout decisions involve multiple objectives.
Layout decisions affect quality and competitiveness.
4
Arrangement of areas within a facility to:
• Minimize material-handling costs
• Utilize space efficiently
• Utilize labor efficiently
• Eliminate bottlenecks
• Facilitate communication and interaction
• Reduce manufacturing cycle time
• Reduce customer service time
• Eliminate wasted or redundant movement
• Increase capacity
5
Arrangement of areas within a facility to:
• Facilitate entry, exit, and placement of material, products,
and people
• Incorporate safety and security measures
• Promote product and service quality
• Encourage proper maintenance activities
• Provide a visual control of activities
• Provide flexibility to adapt to changing conditions.
6
Basic Layouts
• Process layouts
• Group similar activities together according to the
process or function they perform
• Product layouts
• Arrange activities in line according to the sequence of
operations for a particular product or service
• Fixed-position layouts
• Are used for projects in which products cannot be
moved
7
Process Layout in Services
8
Manufacturing Process Layout
9
A Product Layout
Process layouts are

flexible; product
layouts are efficient.
10
11
Comparison of Product and Process Layouts
Product Process
Description • Sequential arrangement of • Functional grouping of activities

activities
Type of process • Continuous, mass production, • Intermittent, job shop, batch
mainly assembly production, mainly fabrication
Product • Standardized, make to stock • Varied, made to order
Demand • Stable • Fluctuating

Volume • High • Low
Equipment • Special purpose • General purpose
12
Comparison of Product and Process Layouts
Product Process
Worker • Limited skills • Varied skills

Inventory • Low in-process, high finished • High in-process, low finished
goods goods
Storage space • Small • Large
Material handling • Fixed path (conveyor) • Variable path (forklift)
Aisles • Narrow • Wide
Scheduling • Part of balancing • Dynamic
Layout • Line balancing • Machine location
decision Goal • Equalize work at each station • Minimize material handling cost
Advantage • Efficency • Flexibility
13
Fixed-Position Layouts
14
Fixed-Position Layouts
• Typical of projects in which product produced is too fragile,
bulky, or heavy to move
• Equipment, workers, materials, other resources brought to
the site
• Low equipment utilization
• Highly skilled labor
• Typically low fixed cost
• Often high variable costs
15
Designing Process Layouts
• Goal: minimize material handling costs
• Block Diagramming
• minimize nonadjacent loads
• use when quantitative data is available
• Relationship Diagramming
• based on location preference between areas
• use when quantitative data is not available
16
Block Diagramming
Unit load: quantity in which material is normally moved
Nonadjacent load: distance farther than the next block
STEPS
• create load summary chart
• calculate composite (two way) movements
• develop trial layouts minimizing number of nonadjacent loads
17
Example
Barko, Inc. makes bark scalpers, processing equipment that strips the bark off
trees and turns it into nuggets or mulch for gardens. The facility that makes bark
scalpers is a small-job shop that employs 50 workers and is arranged into five
departments: (1) bar stock cutting, (2) sheet metal, (3) machining, (4) painting,
and (5) assembly. The average number of loads transported between the five
departments per month is given in the accompanying load summary chart. The
current layout of the facility is shown schematically on the 2 x 3 grid. Notice that
there is quite a bit of flexibility in the facility, as indicated by the six possible
locations (i.e., intersections) available for five departments. In addition, the
forklift used in the facility is very flexible, allowing horizontal, vertical, and
diagonal movement of material.
18
Example
19
Example
Barko management anticipates that a new bark scalper plant will soon be
necessary and would like to know if a similar layout should be used or if a better
layout can be designed. You are asked to evaluate the current layout in terms of
nonadjacent loads, and if needed, pro- pose a new layout on a 2 x 3 grid that will
minimize the number of nonadjacent loads.
20
Solution
In order to evaluate the current layout, we need to calculate the composite, or
back-and-forth, movements between departments. For example, the composite
movement between department 1 and department 3 is the sum of 50 loads
moved from 1 to 3, plus 60 loads moved from 3 to 1, or 110 loads of material. If
we continue to calculate composite movements and rank them from highest to
lowest, the following list results:
21
Solution
Next, we evaluate the “goodness” of the layout by scoring it in terms of
nonadjacent loads. The results are shown visually in Grid 1.
22
Solution
The adjacent moves are marked with a solid line and the nonadjacent moves are
shown with a curved dashed line to highlight the fact that material is moved
farther than we would like, that is, across more than one square. Following our
composite movement list, 2 « 3 and 2 « 4 are adjacent moves, but 1 « 3 is not.
Our nonadjacent score starts with 110 loads of material from 1 « 3. Continuing
down our list, all moves are adjacent and are marked with solid lines until 3 « 4.
Movement 3 « 4 is nonadjacent, so we designate it as such and add 40 loads to
our nonadjacent score. The remaining movements have zero loads. Thus, our
score for this layout is 110 + 40 = 150 nonadjacent loads.
23
Solution
To improve the layout, we note that departments 3 and 4 should be located
adjacent to department 2, and that departments 4 and 5 may be located away
from department 1 without adding to the score of nonadjacent loads. Let’s put
departments 4 and 5 on one end of the grid and department 1 on the other and
then fill in departments 2 and 3 in the middle. The revised solution is shown in
Grid 2. The only nonadjacent moves are between departments 1 and 4, and 1
and 5. Since no loads of material are moved along those paths, the score for this
layout is zero.
24
Example
Nonadjacent Loads: 0
25
Example
Block Diagram: type of schematic layout diagram; includes space requirements
(a) Initial block diagram (b) Final block diagram
26
Practice
27
Designing Service Layouts
• Must be both attractive and functional
• Types
• Free flow layouts
• Encourage browsing, increase impulse purchasing, are
flexible and visually appealing
• Grid layouts
• Encourage customer familiarity, are low cost, easy to clean and
secure, and good for repeat customers
• Loop and Spine layouts
• Both increase customer sightline and exposure to products,
while encouraging customer to circulate through the entire store.
28
Types of Store Layouts
29
Teamworks
Corresponding to the types of store layouts, find real-life examples?
30
Designing Product Layout
• Objective
• Balance the assembly line
• Line balancing
• tries to equalize the amount of work at each workstation
• Precedence requirements
• physical restrictions on the order in which operations are performed
• Cycle time
• maximum amount of time a product is allowed to spend at each
workstation
31
Cycle Time Example
32
Flow Time Vs Cycle Time
Cycle time = max time spent at any station
Flow time = time to complete all stations
33
Efficiency of Line and Balance Delay
34
Line balancing Procedure
1.Draw and label a precedence diagram
2.Calculate desired cycle time required for line
3.Calculate the theoretical minimum number of workstations
4.Group elements into workstations, recognizing cycle time
and precedence constraints
5.Calculate efficiency of line
6.Determine if theoretical minimum number of workstations
or an acceptable efficiency level has been reached. If not,
go back to step 4.
35
Line Balancing: Example
36
37
38
39
Practice
40
•Cân bằng đường dây
Bước 1: Nhận dạng, liệt kê tất cả công việc cần được thực hiện đẻ
SX ra SP.
Bước 2: Xác định thời gian cần thiết để hoàn thành từng công việc.
Bước 3: Xác định trình tự cần thiết cho từng công việc.
Bước 4: Tính thời gian chu kỳ (thời gian qua trạm) – thời gian SP
cần lưu lại để gia công/lắp ráp tại mỗi khu vực làm việc.
Thời gian sx mỗi ngày
C=
Sản lượng mỗi ngày
•Cân bằng đường dây
Bước 5: Xác định số khu vực (số trạm) làm việc tối thiểu, kết quả là
số lẻ thì làm tròn lên.
T
N! =
C
T: Tổng thời gian cho các công việc
C: Thời gian luân chuyển qua trạm
Bước 6: Thực hiện cân bằng đường dây, phân công công việc cho
các trạm.
Bước 7: Tính hiệu suất
T
Hiệu suất =
N" C
Một chiếc xe Toyota được lắp ráp trên một băng chuyền. Cần SX 500 xe mỗi
ngày. Thời gian SX mỗi ngày là 420 phút. Các bước SX (bên dưới). Tìm mức
cân bằng để tối thiểu hoá số trạm công việc với các ràng buộc về thời gian
luân chuyển và thứ tự nhiệm vụ.
Nhiệm vụ Thời gian làm Mô tả CV Nhiệm vụ
(Giây) trước
A 45 Đặt thanh đỡ trục bánh sau và vặn tay bốn ốc vào đai ốc -
B 11 Chèn trục bánh sau A
C 9 Siết ốc thanh đỡ trục bánh sau vào đai ốc B
D 50 Đặt tổ hợp trục bánh trước và vặn tay bốn ốc vào đai ốc -
E 15 Siết ốc tổ hợp trục bánh trước D
F 12 Đặt bánh sau số 1 và vặn nắp đậy trục bánh xe C
G 12 Đặt bánh sau số 2 và vặn nắp đậy trục bánh xe C
H 12 Đặt bánh trước số 1 và vặn nắp đậy trục bánh xe E
I 12 Đặt bánh trước số 2 và vặn nắp đậy trục bánh xe E
J 8 Đặt cần điều khiển xe lên tổ hợp trục bánh trước và vặn bu-lông, đai ốc F,G,H,I
K 9 Siết bu-lông và đai ốc J
1. Sơ đồ thứ tự lắp ráp:
12 giây
F
11 giây 9 giây
45 giây
B C 12 giây
A
G 8 giây 9 giây
J K
50 giây 15 giây 12 giây
D E H
12 giây
2. Xác định thời gian luân chuyển qua trạm.
Thời gian sx mỗi ngày 60s ∗ 420 phút 25.200

C= = = = 50.4 s
Sản lượng mỗi ngày 500 xe 500
3. Xác định số trạm công việc tối thiểu
T 195s
N! = = = 3.87 = 4
C 50.4s
4. Phân bổ công việc
a. Ưu tiên công việc có số công việc tiếp theo dài nhất:
Nhiệm vụ Số nhiệm vụ tiếp sau

A 6
B hoặc D 5
C hoặc E 4
F,G,H hoặc I 2
J 1
K 0
4. Phân bổ công việc
b. Ưu
Trạm tiên theo
Nhiệm Thời thứ tự gian
Thời đồ dài Nhiệm
thời gian
vụ làm nhiệm
Nhiệm vụ
vụ có Nhiệm vụ có
vụ gian chưa phân khả thi nhiều khâu thời gian hoàn
bổ còn lại tiếp theo nhất thành dài nhất
1 A 45 5.4 Không
2 D 50 0.4 Không
3 E 15 35.4 B,H,I B B
B 11 24.4 C,H,I C C
C 9 15.4 F,G,H,I
4 G 12 38.4 H,I H,I H,I

H (*) 12 26.4 I
I 12 14.4 J
J 8 6.4 Không
5 K 9 41.4 Không
5. Phân bổ trạm:
WS3 12 giây
WS 1 F
11 giây 9 giây
45 giây
B C 12 giây
A
G 8 giây 9 giây
J K
D E H WS5
WS 2
12 giây
I
WS4
6. Tính hiệu suất
T 195
Hiệu suất = = = 77%
N" C (5)(50.5)
Có phương án nào tối ưu hơn?
Nhiệm vụ Thời gian hoàn thành dài nhất
D 50
A 45
E 15
F,G,H,I 12
B 11
C,K 9
J 8
Phân bổ công việc
b. Ưu
Trạm tiên theo
Nhiệm Thời thứ tự gian
Thời đồ dài Nhiệm
thời gian
vụ làm nhiệm
Nhiệm vụ
vụ có Nhiệm vụ có
vụ gian chưa phân khả thi nhiều khâu thời gian hoàn
bổ còn lại tiếp theo nhất thành dài nhất
1 D 54 0.4 Không
2 A 45 5.4 Không
3 E 15 35.4 B,H,I H,I
H(*) 12 23.4 B,I I
I 12 11.4 B,J B
B 11 0.4 Không
4 C 9 41.4 F,G,J F,G
F(*) 12 29.4 G,J G
G 12 17.4 J
J 8 9.4 K
K 9 0.4 Không
Phân bổ trạm:
12 giây
WS 2 F
11 giây 9 giây
45 giây
B C 12 giây
A
G 8 giây 9 giây
J K
D E H
WS 1 WS4
12 giây
I
WS3
Tính hiệu suất
T 195
Hiệu suất = = = 95%
N" C (4)(50.5)
Homework
Nhà máy Sunny đang sx xe quá vật đồ chơi. Họ thuê các nhà tư
vấn SX để xác định kiểu quy trình SX tốt nhất đáp ứng nhu cầu dự
báo cho loại S P này. Nhà tư vấn đề nghị sử dụng dây chuyền SX,
và dây chuyền phải có khả năng SX 600 SP xe mỗi ngày. Các công
nhân hiện đang làm việc 8h mỗi ngày.
Nhiệm vụ Thời gian (Giây) Nhiệm vụ trước
A 28 -
B 13 -
C 35 B
D 11 A
E 20 C
F 6 D,E
G 23 F
H 25 F
I 37 G
J 11 G,H
K 27 I,J
Tổng cộng 236

a. Vẽ sơ đồ
b. Chu trình thời gian cần thiết để đáp ứng nhu cầu dự báo 600 xe
mỗi ngày, dựa trên ngày làm việc 8h?
c. Về lý thuyết, số lượng vị trí công việc tối thiểu theo câu (b) là
bao nhiêu?
d. Hãy sử dụng thời gian công việc dài nhất theo mẫu tự Alphabet
để phá vỡ trật tự và lấy lại sự cân bằng cho dây chuyền trong
số lượng trạm tối thiểu.
e. Hãy sử dụng thời gian nhiệm vụ ngắn nhất theo thứ tự, với các
nhiệm vụ theo sau nhiều nhất để phá vỡ trật tự và lấy lại cân
bằng cho dây chuyền trong số lượng trạm tối thiểu.
Operation 5A – Facility
Management Location
572
Types of Facilities
58
Types of Facilities
• Heavy-manufacturing facilities are large, require a lot of
space, and are expensive.
• Light-industry facilities are smaller, cleaner plants and are

usually less costly.
• Retail and service facilities are the smallest and least costly.
59
Factors in Heavy-manufacturing Location
• Construction costs
• Land costs
• Raw material and finished goods shipment modes
• Proximity to raw materials
• Utilities
• Means of waste disposal
• Labor availability
60
Factors in Light-industry Location
• Land costs
• Transportation costs
• Proximity to markets
• Depending on delivery requirements including frequency
of delivery required by customer.
61
Factors in Retail Location
• Proximity to customers
• Location is everything
62
SITE SELECTION: WHERE TO LOCATE
63
• Infrequent but important
• Being “in the right place at the right time”
• Must consider other factors, especially financial considerations.
• Location decisions made more often for service operations than
manufacturing facilities.
• Location criteria for service (access to customers)
64
• Location criteria for manufacturing facilities
• Nature of labor force
• Labor costs
• Proximity to suppliers and markets
• Distribution and Transportation costs
• Energy availability and cost
• Community infrastructure
• Quality of life in the community
• Government regulationsthaindh@hcmute.edu.vn
and taxes. 65
Location Analysis Techniques
• Location factor rating
• Center-of-gravity
• Load-distance
66
Location Factor Rating
Location factor rating:
a method for identifying and weighting important location
factors.
• Identify important factors

• Weight factors (0.00 - 1.00)
• Subjectively score each factor (0 - 100)
• Sum weighted scores
67
Location Factor Rating: Example
The Dynaco Manufacturing Company is going to build a new
plant to manufacture ring bearings (used in automobiles and
trucks). The site selection team is evaluating three sites, and
they have scored the important factors for each as follows.
They want to use these ratings to compare the locations.
68
69
70
Location Factor Rating with Excel / POM
71
Center-of-gravity technique
• Locate facility at center of movement in geographic area
• Based on weight and distance traveled; establishes grid-map
of area
• Identify coordinates and weights shipped for each location
Center-of-gravity technique:
the center of movement in a geographic area based on
transport weight and distance.
72
Grid-Map Coordinates
73
The Center-of-gravity technique - Example
The Burger Doodle restaurant chain purchases ingredients
from four different food suppliers. The company wants to
construct a new central distribution center to process and
package the ingredients before shipping them to their various
restaurants. The suppliers transport ingredi- ent items in 40-
foot truck trailers, each with a capacity of 38,000 lbs. The
locations of the four suppliers, A, B, C, and D, and the annual
number of trailer loads that will be transported to the
distribution center are shown in the following figure:
74
75
76
77
Center-of-gravity technique with excel / pom
78
Load-Distance technique
Load-distance technique:
a method of evaluating different locations based on the load
being transported and the distance.
• Compute (Load x Distance) for each site

• Choose site with lowest (Load x Distance)
• Distance can be actual or straight-line
79
Load-Distance Calculations
80
Load-Distance technique - Example
Burger Doodle wants to evaluate three different sites it has
identified for its new distribution center relative to the four
suppliers. The coordinates of the three sites under
consideration are as follows:
81
82
83
Load-Distance Technique with excel /POM
84
Transportation Model
• A transportation model is formulated for a class of problems
with the following characteristics
• A product is transported from a number of sources to a number
of destinations at the minimum possible cost.
• Each sources is able to supply a fixed number of units of
product
• Each destination has a fixed demand for product
85
Transportation Model
• Solution methods
• Stepping-stone
• Modified distribution
• Excel’s solver
86
Transportation Model - Example
Potatoes are grown and harvested on farms in the Midwest
and then shipped to distribution centers in Kansas City,
Omaha, and Des Moines where they are cleaned and sorted.
These distribution centers supply three manufacturing plants
operated by the Frodo-Lane Foods Company, located in
Chicago, St. Louis, and Cincinnati, where they make potato
chips. Potatoes are shipped to the manufacturing plants by
railroad or truck. Each distribution center is able to supply the
following tons of potatoes to the plants on a monthly basis:
87
Transportation Method
88
89
Transportation Table
90
91
92
Solution
93
Solution
94
Transshipment model
Transshipment model:
a variation of the transportation
model with intermediate points
between sources and
destinations.
95
Solution
96
THANKS!
Any questions?
You can find me at:
▸Zalo: 0906 613 813
▸thaindh@hcmute.edu.vn
97

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OPERATION MANAGEMENT

C5. Facility Location and Facility layout

Facility layout decisions involve multiple objectives.

Layout decisions affect quality and competitiveness.

Process layouts are

Description • Sequential arrangement of • Functional grouping of activities

Product • Standardized, make to stock • Varied, made to order

Demand • Stable • Fluctuating

Worker • Limited skills • Varied skills

Corresponding to the types of store layouts, find real-life examples?

B 11 Chèn trục bánh sau A

C 9 Siết ốc thanh đỡ trục bánh sau vào đai ốc B

E 15 Siết ốc tổ hợp trục bánh trước D

F 12 Đặt bánh sau số 1 và vặn nắp đậy trục bánh xe C

G 12 Đặt bánh sau số 2 và vặn nắp đậy trục bánh xe C

H 12 Đặt bánh trước số 1 và vặn nắp đậy trục bánh xe E

I 12 Đặt bánh trước số 2 và vặn nắp đậy trục bánh xe E

K 9 Siết bu-lông và đai ốc J

Thời gian sx mỗi ngày 60s ∗ 420 phút 25.200

3. Xác định số trạm công việc tối thiểu

Nhiệm vụ Số nhiệm vụ tiếp sau

4 G 12 38.4 H,I H,I H,I

Có phương án nào tối ưu hơn?

Tổng cộng 236

• Light-industry facilities are smaller, cleaner plants and are

• Identify important factors

• Compute (Load x Distance) for each site

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