6 Facilities Layout

7-1
u Indoor seating (1950s)
u Adding breakfast to the menu (1980s)
u Adding play areas (late 1980s)
u Redesign of the kitchens (1990s)
u Self-service kiosk (2004)
u Now three separate dining sections
u What can we observe from these
innovations?
7-2
u Indoor seating (1950s)
u Drive-through window (1970s)
u Adding breakfast to Six
the out
menu
of the
(1980s) seven are
layout
u Adding play areas (late 1980s)
decisions!
u Redesign of the kitchens (1990s)
u Self-service kiosk (2004)
u Now three separate dining sections
7-3
u Redesigning all 30,000 outlets around
the world
u Three separate dining areas
u Linger zone with comfortable chairs and
Wi-Fi connections
u Grab and go zone with tall counters
u Flexible zone for kids and families
u Facility layout is a source of
competitive advantage

7-4
u The Strategic Importance of Layout
Decisions
u Types of Layout
u Office Layout
u Retail Layout
u Warehousing and Storage Layouts
u Cross-Docking
u Random Docking
u Customizing
u Fixed-Position Layout

7-5
u Process-Oriented Layout
u Computer Software for Process-
Oriented Layouts
u Work Cells
u Requirements of Work Cells
u Staffing and Balancing Work Cells
u The Focused Work Center and the
Focused Factory
u Repetitive and Product-Oriented
Layout

7-6
1. Discuss important issues in office layout
2. Define the objectives of retail layout
3. Identify when fixed-position layouts are
appropriate

7-7
4. Explain how to achieve a good process-
oriented facility layout
5. Define work cell and the requirements of
a work cell
6. Define product-oriented layout
7. Explain how to balance production flow
in a repetitive or product-oriented facility

7-8
7-9
u Higher utilization of space, equipment,
and people
u Improved flow of information, materials,
or people
u Improved employee morale and safer
working conditions
u Improved customer/client interaction
u Flexibility

7 - 10
u Material handling equipment
u Capacity and space requirements
u Environment and aesthetics
u Flows of information
u Cost of moving between various
work areas

7 - 11
1. Office layout
2. Retail layout
3. Warehouse layout
4. Fixed-position layout
5. Process-oriented layout
6. Work-cell layout
7. Product-oriented layout
7 - 12
u Grouping of workers, their equipment, and
spaces to provide comfort, safety, and
movement of information
u Movement of information is main
distinction
u Typically in state of flux due to frequent
technological changes

7 - 13
7 - 14
u Retail layout: Allocates shelf
space and responds to
customer behavior
u Objective is to maximize
profitability per square foot of
floor space
u Sales and profitability vary
directly with customer exposure
7 - 15
7 - 16
1. Locate high-draw items around the
periphery of the store
2. Use prominent locations for high-impulse
and high-margin items
3. Distribute power (discounted) items to
both sides of an aisle and disperse them
to increase viewing of other items
4. Use end-aisle locations
5. Convey mission of store through careful
positioning of lead-off department
7 - 17
u Objective is to optimize trade-offs
between handling costs and costs
associated with warehouse space
u Maximize the total “cube” of the
warehouse – utilize its full volume
while maintaining low material
handling costs

7 - 18
u All costs associated with the transaction
u Incoming transport
u Storage
u Finding and moving material
u Outgoing transport
u Equipment, people, material, supervision,
insurance, depreciation
u Minimize damage and spoilage
7 - 19
u Warehouse density tends to vary
inversely with the number of different
items stored
u Automated Storage and Retrieval
Systems (ASRSs) can significantly
improve warehouse productivity by
an estimated 500%
u Dock location is a key design element

7 - 20
u Materials are moved directly from
receiving to shipping and are not placed
in storage in the warehouse
u Requires tight
scheduling and
accurate shipments,
bar code or RFID
identification used for
advanced shipment
notification as
materials
are unloaded
7 - 21
u Typically requires automatic identification
systems (AISs) and effective information
systems (Watch the video)
u Random assignment of stocking locations
allows more efficient use of space
u Key tasks
1. Maintain list of open locations
2. Maintain accurate records
3. Sequence items to minimize travel, pick time
4. Combine picking orders
5. Assign classes of items to particular areas
7 - 22
u Value-added activities performed at
the warehouse
u Enable low cost and rapid response
strategies
u Assembly of components
u Repairs
u Customized labeling and packaging

7 - 23
u Product remains in one place
u Workers and equipment come to site
u Complicating factors
u Limited space at site
u Different materials
required at different
stages of the project
u Volume of materials
needed is dynamic
7 - 24
 ER
triage Emergency room admissions
room
Surgery

Laboratories

Radiology ER Beds Pharmacy Billing/exit

7 - 25
u Like machines and equipment are
grouped together
u Flexible and capable of handling a
wide variety of products or
services
u Scheduling can be difficult and
setup, material handling, and
labor costs can be high

7 - 26
u Arrange work centers so as to
minimize the costs of material
handling
u Basic cost elements are
u Number of loads (or people)
moving between centers
u Distance loads (or people) move
between centers

7 - 27
 n n

Minimize cost = ∑ ∑ Xij Cij

i=1 j=1

where n = total number of work centers or

departments
i, j = individual departments
Xij = number of loads moved from
department i to department j
Cij = cost to move a load between
department i and department j

7 - 28
Arrange six departments in a factory to
minimize the material handling costs.
Each department is 20 x 20 feet and the
building is 60 feet long and 40 feet wide.
1. Construct a “from-to matrix”
2. Determine the space requirements
3. Develop an initial schematic diagram
4. Determine the cost of this layout
5. Try to improve the layout
6. Prepare a detailed plan
7 - 29
 Number of loads per week
Department Assembly Painting Machine Receiving Shipping Testing
(1) (2) Shop (3) (4) (5) (6)

Assembly (1) 50 100 0 0 20

Painting (2) 30 50 10 0

Machine Shop (3) 20 0 100

Receiving (4) 50 0

Shipping (5) 0

Testing (6)

7 - 30
 Area 1 Area 2 Area 3

Assembly Painting Machine Shop

Department Department Department
(1) (2) (3)

40’

Receiving Shipping Testing

Department Department Department
(4) (5) (6)

Area 4 Area
60’5 Area 6
7 - 31
Interdepartmental Flow Graph
100

Assembly 50 Painting 30 Machine

(1) (2) Shop (3)
20 20
10
50 100

Receiving Shipping Testing

(4) (5) (6)
50

Figure 9.6
7 - 32
 n n

Cost = ∑ ∑ Xij Cij

i=1 j=1

Cost = $50 + $200 + $40

(1 and 2) (1 and 3) (1 and 6)
+ $30 + $50 + $10
(2 and 3) (2 and 4) (2 and 5)
+ $40 + $100 + $50
(3 and 4) (3 and 6) (4 and 5)

= $570

7 - 33
Revised Interdepartmental Flow Graph
30

Painting 50 Assembly 100 Machine

(2) (1) Shop (3)

10
20 20 100
50

Receiving Shipping Testing

(4) (5) (6)
50

Figure 9.7
7 - 34
 n n

Cost = ∑ ∑ Xij Cij

i=1 j=1

Cost = $50 + $100 + $20

(1 and 2) (1 and 3) (1 and 6)
+ $60 + $50 + $10
(2 and 3) (2 and 4) (2 and 5)
+ $40 + $100 + $50
(3 and 4) (3 and 6) (4 and 5)

= $480

7 - 35
 Area 1 Area 2 Area 3

Painting Assembly Machine Shop

Department Department Department
(2) (1) (3)

40’

Receiving Shipping Testing

Department Department Department
(4) (5) (6)

Area 4 Area
60’5 Area 6
7 - 36
u Reorganizes people and machines
into groups to focus on single
product or product groups
u Group technology identifies
products that have similar
characteristics for particular cells
u Volume must justify cells
u Cells can be reconfigured as
designs or volume changes
7 - 37
Current layout - workers
in small closed areas.

Improved layout - cross-trained

workers can assist each other.
May be able to add a third worker
as additional output is needed.

7 - 38
Current layout - straight
lines make it hard to balance
tasks because work may not
be divided evenly
Improved layout - in U
shape, workers have better
access. Four cross-trained
workers were reduced.

U-shaped line may reduce employee movement

and space requirements while enhancing
communication, reducing the number of
workers, and facilitating inspection

7 - 39
1. Reduced work-in-process inventory
2. Less floor space required
3. Reduced raw material and finished
goods inventory
4. Reduced direct labor
5. Heightened sense of employee
participation
6. Increased use of equipment and
machinery
7. Reduced investment in machinery and
equipment
7 - 40
1. Identification of families of products
2. A high level of training, flexibility
and empowerment of employees
3. Being self-contained, with its own
equipment and resources
4. Test (poka-yoke) at each station in
the cell

7 - 41
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 life cycle that justifies investment
4. Supplies of raw materials and components are
adequate and of uniform quality
7 - 42
u Fabrication line
u Builds components on a series of machines
u Machine-paced
u Require mechanical or engineering changes
to balance
u Assembly line
u Puts fabricated parts together at a series of
workstations
u Paced by work tasks
u Balanced by moving tasks
Both types of lines must be balanced so that the
time to perform the work at each station is the same
7 - 43
1. Low variable cost per unit
2. Low material handling costs
3. Reduced work-in-process inventories
4. Easier training and supervision
5. Rapid throughput

1. High volume is required

2. Work stoppage at any point ties up the
whole operation
3. Lack of flexibility in product or production
rates
7 - 44
Figure 9.12

7 - 45
u Objective is to minimize the imbalance
between machines or personnel while
meeting required output
u Starts with the precedence
relationships
u Determine cycle time
u Calculate theoretical minimum number
of workstations
u Balance the line by assigning specific
tasks to workstations

7 - 46
 Performance Task Must Follow
Time Task Listed
Task (minutes) Below
A 10 —
B 11 A This means that
C 5 B tasks B and E
cannot be done
D 4 B until task A has
E 12 A been completed
F 3 C, D
G 7 F
H 11 E
I 3 G, H
Total time 66

7 - 47
 Performance Task Must Follow
Time Task Listed
Task (minutes) Below
A 10 —
B 11 A
C 5 B
D 4 B
E 12 A
F 3 C, D 5

G 7 F 10 11
C
3 7
H 11 E
A B F G
I 3 G, H 4
3
Total time 66 12
D
11 I
E H

Figure 9.13
7 - 48
 Performance Task Must Follow 480 available
Time Task Listed mins per day
Task (minutes) Below 40 units required
A 10 —
B 11 A Production time
C 5 B available per day
D 4 Cycle
B time = Units required per day
E 12 A = 480 / 40
F 3 C, D 5
= 12 minutes per unit
G 7 F 10 11
C
3 7
n
H 11 E
A ∑ Time
B for taskFi G
I 3 Minimum
G, H i=1 4
number of = 3
Total time 66 workstations Cycle
12
Dtime
11 I
= 66 / 12
E H
= 5.5 or 6 stations
Figure 9.13
7 - 49
 Performance Task Must Follow 480 available
Time Task Listed mins per day
Task (minutes) Below 40 units required
A 10 — Cycle time = 12 mins
B 11 A Minimum
Station 5 B = 5.5 or 6
C 52 workstations
D 4 C B
E 10 11
12 A 3 7
F A B3 C, D F G
4 3
G 7 F
H 11 D E Station 3 I
Station 3
I 3 12 G, H 11
Station 6 6
Total
Stationtime 66 Station
1 E H
Station Station
4 5 Figure 9.14
7 - 50
 Performance Task Must Follow 480 available
Time Task Listed mins per day
Task (minutes) Below 40 units required
A 10 — Cycle time = 12 mins
B 11 A Minimum
C 5 B = 5.5 or 6
workstations
D 4 B
E 12 A
F 3 C, D
G 7 F ∑ Task times
Efficiency =
H (Actual number ofEworkstations) x (Largest cycle time)
11
I 3 G, H
= 66 minutes / (6 stations) x (12 minutes)
Total time 66
= 91.7%

7 - 51
1. Office layout: Positions workers,
their equipment, and spaces/offices
to provide for movement of
information
2. Retail layout: Allocates shelf space
and responds to customer behavior
3. Warehouse layout: Addresses trade-
offs between space and material
handling
7 - 52
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)

7 - 53
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
utilizations in repetitive or
continuous production

7 - 54