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This is a long chapter with lots of tools. The Hints and Tips will help you with these tools. Proper layout of equipment and workstations contribute greatly to organizational strategy, capacity, process efficiency, flexibility, and cost. In addition, layout improves the operating conditions for both employees and customers. The competitive environment requires dynamic design of layouts. A variety of techniques helps to achieve such flexibility. The textbook identifies seven types of layouts. Each contributes to the success of a particular industry. One needs to consider material handling equipment, capacity and space requirements, the environment and aesthetics of space, flows of information, and the cost of moving among work areas. The office layout emphasizes the flow of information among workers to complete the tasks to which they are assigned. The relationship chart indicates the appropriate location of people and things. Still, many different questions involving people and organizational goals or culture need answers. The retail layout focuses on the ability to expose customers to products. The better the exposure, the more likely the organization can produce greater sales and profitability. An important objective of retail layout decisions is to maximize profitability per square foot of floor space or linear foot of shelf space. Many mathematical techniques and analytical tools can help identify the best layouts. Managers also must concern themselves with the servicescape so to not adversely affect customers and employees. Ambient conditions, spatial layout, and other characteristics have social significance. Warehouse layouts find the optimum trade-off between handling cost and the costs associated with providing the space. Material handling costs include those related to the transaction. Finding and moving an item is expensive. Management tries to minimize the cost through better storage logic and picking routines. Fixed-Position layouts apply to projects such as building a ship, highway, bridge, or house. People and material travel to the site and perform the work. To ease congestion and move materials, appropriate manufacturing or assembly layouts construct components offsite and deliver them as needed. Project management helps to schedule these steps. Process-oriented layouts include flexible equipment and staff that can produce a variety of products and services. As a result, the organization can more easily cater to customer needs than a dedicated or specialized process can. Each product or service may follow a different route through the layout. The challenge is to design the layout to minimize movement (a non-value activity), scheduling changes, setups, and unique material handling. All of these add costs to the end-product or service. When planning, the cost to move something from one location to another is often assumed as equal and incorporates a variety of reasons why resources are consumed. The textbook demonstrates a simple trial and error
Work cells require the identification of product families. Think of a team or a theater group. Volume satisfies utilization requirements. and the total throughput demanded of the system. The minimum number of workstations needed to build at the required rates is determined by dividing the total time necessary to build a unit divided by the cycle time. As an example. Define work cell and the requirements of a work cell . the organization will change the work cell. and the required capacity exists. that we can divide task time equally. there is little idle time. To build ten wheelbarrows per day means a unit is completed every 48 minutes. and supplies are adequate. Focused work centers and focused factories use the work cell concept to produce families of similar products (components) that have a large and stable demand. selfcontained assignment of equipment and resources.141 Chapter 9 technique. Explain how to achieve a good process-oriented facility layout 6. specialized groups (offense or defense. Line balancing techniques help to solve either problem. Demand is stable. The imbalance produces idle time. Fabrication lines build components. however. In both cases. Picture one worker having responsibility for two-thirds of time required to complete the wheelbarrow. The final layout to consider applies to product-oriented production that builds or supply high-volume. Define the objectives of retail layout 3. As needed. but divide the work between two assemblers and they can build ten. Identify when fixed-position layouts are appropriate 5. The Hints and Tips section. operations managers will determine the number of workstations required and how many tasks are completed at each station. Assembly lines put the fabricated parts together. The product or service is standardized. To build 10 wheelbarrows would require 2 workstations at a minimum. Work cells reorganize people and machines into a common location that can focus on tasks efficiently. low-variety products. The second worker must wait until the other person hands off the component before starting. cross-docking. Workers or machines may stand idle waiting for a part to arrive. Staffing and balancing the work cell requires knowing the capacity of the cell and the total time necessary to build one unit. and a quality/specification test at each station. Planning for layouts that are more elaborate usually requires the assistance of computer programs. organization must “balance” the workstations. This assumes. explains the procedure further. Discuss important issues in office layout 2. high level of training. chorus or orchestra) work together. time required to complete a task. Using the a list of the production tasks organized by sequence. while the other worker only has one-third. Product-oriented layouts follow repetitive procedures and include fabrication or assembly. The Hints and Tips section gives an annotated example. Before the final product is finished (the game or the play). Discuss modern warehouse management and terms such as ASRS. Thus building five wheelbarrows per eight-hour day determines a cycle time of 96 minutes per wheelbarrow. Knowing the desired throughput (number of units per time period) for an assembly line determines the cycle time (the amount of time between completion of each unit). and random stocking 4. Grouping or locating similar products or components together minimizes travel and enhances information flow. Why? One of two problems can occur. one person may build five wheelbarrows per day. When a line is balanced. or a queue develops because a particular workstation is too slow to keep up with demand. below. Learning Objectives 1.
Key attributes 1. high-variety production (also called “job shop” or intermittent production) 6. Higher utilization of space. Fixed-position layout: Addresses the layout requirements of large. equipment. materials. Work-cell layout: Arranges machinery and equipment to focus on production of a single product or group of related products 7.Layout Strategies 142 7. bulky projects such as ships and buildings 5. Layout should achieve 1. their equipment. Improved employee morale and safer working conditions 4. Material handling equipment 2. Differentiation 6. Affects 1. Must determine the following 1. Warehouse layout: Addresses trade-offs between space and material handling 4. Flexibility (whatever the layout is now. it will need to change) II. Retail layout: Allocates shelf space and responds to customer behavior 3. Process-oriented layout: Deals with low-volume. Improved customer/client interaction 5. Office layout: Positions workers. Define product-oriented layout 8. Capacity 2. Response time B. Process 3. The Strategic Importance of Layout Decisions A. Explain how to balance production flow in a repetitive or product-oriented facility Skills to Develop • • • • • • • See the efficiency associated with better layout Specify layout criteria Identify how a customer reacts to layout design Compute costs associated with layout design Design work cells Assess unbalanced lines Identify methods to improve cycle time Annotated Chapter Outline I. or people 3. Flexibility 4. and spaces/offices to provide for movement of information 2. Improved flow of information. and people 2. Cost 5. Product-oriented layout: Seeks the best personnel and machine utilization in repetitive or continuous production B. Capacity and space requirements . Types of Layout A.
Spatial layout and functionality which involve customer circulation and aisle characteristics c. symbols. and depreciation 3. High or low file cabinets c. Can slotting fees help with profitability a. Convey the mission of the store by selecting the position of the lead-off department. Locate high draw items around the periphery of the store. Maximize profitability per square foot or lineal foot of shelf space 2. Flows of information 5. and movement of information Also must consider tasks Analysis 1. people. Evaluate 1. Environment and aesthetics 4. sound. smell. Cost of moving between various work areas Office Layout Provide for comfort. Signs. Teamwork 3. 2. A. Status a. Working conditions 2. C. Electronic and conventional communication 2. Slotting fees are charged for the best space in a retail store b. Physical surrounding in which service is delivered a. storage. . Use end-aisle locations because of their exposure rate 5. B. Ambient conditions such as lighting. Distribute power items – those that dominate the customer’s visit – to both sides of an aisle and disburse to increase viewing of other items 4. V. C.143 Chapter 9 3. supervision. Separation needs 3. A. IV. C. safety. insurance. A. and artifacts which are characteristics of design that carry social significance Warehousing and Storage Layouts Find optimum trade-off between handling cost and the costs associate with warehouse space Maximize the utilization of the warehouse volume – known as the “cube” Material handling costs produced by the transaction 1. Minimize damage and spoilage III. Use of entrance and other rooms in the facility Retail Layout Exposure of products to the customer increase sales and profits 1. Use the relationship chart Universal considerations 1. outgoing transport 2. D. Use prominent location for high-impulse and high-margin items 3. and temperature b. Used by stores with strong buying power Servicescapes 1. Private or open cubicles b. Equipment. B. Authority 4. B. Incoming transport.
Project management is important VII. Automatic identification systems using bar codes allow accurate and rapid item identification 2.Layout Strategies 144 D. Manufacturing facilities move material right from delivery dock to the assembly line 3. Different sequence of steps for production D. Low-volume. Random Stocking 1. Customized labeling and packaging 4. Maintaining accurate records of existing inventory and its locations c. Focus on different needs demanded by customers 1. Problems 1. Scheduling 3. Maintaining a list of open locations b. Distribution centers will receive labeled and presorted loads then reroute immediately 4. Minimizes distance travelled G. Assigning certain items or classes of items. Build a variety of products or deliver a variety of services C. Fixed-Position Layout A. Process-Oriented Layout A. Includes a. With good systems. Combining orders to reduce picking time e. Evaluate using the cost of moving materials from one department to another 2. Computer assisted placement and picking E. Limited space 2. stocking/sorting. Modular construction 5. Customizing 1. All of these add no value to the customer F. high-variety a. Warehouses can house assembly facilities for last minute customizing 2. Cross-Docking 1. and order-selection activity a. Performed adjacent to major airports VI. Minimize distance and the number load movements . Allows for multiple configurations of product 3. Automated storage and retrieval systems (ASRS) 1. such as high-usage items to particular areas i. items are stored anywhere in the warehouse a. Do not need to reserve space 3. Avoids placing materials or supplies by processing as received 2. Makes efficient use of open bays or slots c. Use of offsite production locations that are more product-oriented a. Project remains in one place B. Avoids formal receiving. Can be retrieved easily b. Flexible equipment and staff B. Volume of materials changes rapidly 4. Sequencing items to minimize the travel time required to pick orders d. Objective is to minimize costs without sacrificing quality or customer satisfaction 1.
145 Chapter 9 E. Computer Software for Process-Oriented Layouts .
with its own equipment and resources i. Reduced investment in machinery and equipment B. Reduced work-in-process inventory b. Total work time available/units required i. U-shape manages space efficiently C. Rare call to other locations for assistance e. Determine the number of operators required i. Identification of families of products b. Requirements of Work Cells 1. Total operation time required for one unit/takt time c. Often reconfigured 3. flexibility. Increased equipment and machinery utilization g. Heightened sense of employee participation f. The Focused Work Center and the Focused Factory 1. Cross training D. Determine “takt time” which is the frequency between units necessary to meet orders a. Work Cells A. Imbalance occurs if one employee is performing longer tasks than others i. Work cells reorganize people and machines so that they focus on a single product or group of related products 1. Reduced direct labor cost e. Include a. Work area can be balanced e. Cell flexibility overcomes modest imbalance problems a. Use of group technology codes c. Less floor space required c. Advantage over assembly lines a. and empowerment of employees d. Reduced raw material and finished goods inventories d. Few workers c. A high level of training. Test products at each cell station 2. Time per day/units required b.Layout Strategies 146 VIII. Communications enhanced f. Being self-contained. Workers have better reach throughout the work area d. Benefits a. Material or people may have to wait 2. Inspection immediate b. Volume should warrant this type of arrangement 2. Extensions of work cell management systems . Staffing and Balancing Work Cells 1.
Organized around products or families of product with similar high-volume. Steps a. Management’s goal a. Equals the minimum number of workstations d. Information needed a. Break into two workstations performing the same task . Know the tools. Supplies of raw materials and components are adequate and of uniform quality 5. Avoid idle time iii. Keep sequence logic ii. Divide the time to produce the product by the cycle time i. Inverse of throughput b. Rapid throughput 9. Create a smooth. Fabrication lines make product components 6. Product demand is stable enough to justify high investment in specialized equipment 3. If a task is longer than the desired cycle time aa. High volume required to match the investment made b. and work methods b. Precedence relationship among the activities 2. Repetitive and Product-Oriented Layout A. Reduced work-in-process inventories d. Product is standardized or approaching a life cycle phase that justifies investment in specialized equipment 4. Assembly lines put components together 7. Time requirements for each step in the process c. low-variety characteristics 1. Easier training and supervision e. Advantages a. Disadvantages a. Minimize imbalance 8. Take the steps to produce the product and assign them to the workstations i. Lack of flexibility B. Divide demand or production rate per day into the time available per day i. Low variable cost per unit b. Low material handling costs c. continuing flow with minimal idle time b. Volume is adequate for high equipment utilization 2. Work stoppage at any point ties up the whole operation c.147 Chapter 9 IX. Assembly-Line Balancing 1. Sum the time of all tasks necessary to produce a product (equals the minimum time necessary to build a product c. How much is to be made during a time period? d. Equals cycle time ii. equipment.
Based on initial schematic and routing information.Layout Strategies 148 iv. the cycle time must produce so many goods per time period. Wish to minimize travel or movement time. but also design creativity. Layouts require not only cost analysis. the workstations should finish a unit in exactly the amount of the total task time 4. aa. Computers handle large scale line balancing requirements Hints and Tips 1. the larger the denominator ii. what are the total material handling costs for this layout? How could you improve this initial layout? . 3. aa. to simplify the problem. then the system is not balanced. Example: Process Layout Walters Company management wants to arrange the six departments of its factory in a way that will minimize interdepartmental material handling costs. that each department is 20 x 20 and that the building is 60 feet long by 40 feet wide. 3. aa. Heuristics for assigning tasks to a workstation Longest task time Most following tasks Greatest following time Shortest task (allows grouping with other tasks) Least number of following tasks aa. The more a line is imbalanced. aa. They make an initial assumption. or 120 items per hour. Ideally. If workstations are not working according to the desired cycle time. A cycle time of 90 minutes will produce 2 units every 3 hours. given below. Successful line balancing means combining work or adding additional workstations. Idle time occurs. To obtain a certain production volume. Assembly line balancing requires visualizing workstations that finish before the next workstation does (or before the prior station). Efficiency a. especially when dealing directly with the customer. Divide the total task time by the (actual number of stations times the largest assigned cycle time) i. 2. A cycle time of 30 seconds will produce 2 items per minute.
the greater the cost per load. These might include labor.149 Chapter 9 Move From Department Assembly Assembly Assembly Painting Painting Painting Machine Shop Machine Shop Receiving Location 1 1 1 2 2 2 3 3 4 To Department Painting Machine Shop Testing Machine Shop Receiving Shipping Receiving Testing Shipping Ranking # of of Loads Volume Location of loads 2 2 50 1 3 100 4 6 20 3 3 30 2 4 50 5 5 10 4 4 20 1 6 100 2 5 50 Initial Material Handling Cost From Department Assembly Assembly Assembly Painting Painting Painting Machine Shop Machine Shop Receiving Location 1 1 1 2 2 2 3 3 4 To Load Department Painting Machine Shop Testing Machine Shop Receiving Shipping Receiving Testing Shipping Cost Per Trip* Handling Cost (Load x Cost) $ 50 $ 200 $ 40 $ 30 $ 50 $ 10 $ 40 $ 100 $ 50 570 Location 2 50 $ 1 3 100 $ 2 6 20 $ 2 3 30 $ 1 4 50 $ 1 5 10 $ 1 4 20 $ 2 6 100 $ 1 5 50 $ 1 Total Material Handling Cost * Cost per trip includes a variety of items that would consume resources. Note that the greater the distance traveled. energy. time. . or depreciation.
and testing department. assembly department. This is why examining the locations with the greatest volume of loads is a good place to start. we can reduce the cost of handling by moving the machine shop closer to assembly so long as we do not increase the distance from the machine shop to testing. This is not necessarily easy. Continue with this process until finding the lowest cost layout. Switching the position of assembly and paint. While the machine shop and testing are already as close as possible. in that there are 720 distinct layouts (6! = 6x5x4x3x2x1 = 720) possible layouts. thus less cost. . Note that these are the machine shop. There are fewer loads. we would seek to move departments with the highest loads closest to one another.Layout Strategies 150 Seeking to reduce the total material handling costs. we now have the following layout: Which incurs the following material handling costs: From Department Assembly Assembly Assembly Painting Painting Painting Machine Shop Machine Shop Receiving To Location Department 1 Painting 1 Machine Shop 1 Testing 2 Machine Shop 2 Receiving 2 Shipping 3 Receiving 3 Testing 4 Shipping Load Cost Per Handling Trip* Cost $ 50 $ 100 $ 20 $ 60 $ 50 $ 10 $ 40 $ 100 $ 50 480 Location 2 50 $ 1 3 100 $ 1 6 20 $ 1 3 30 $ 2 4 50 $ 1 5 10 $ 1 4 20 $ 2 6 100 $ 1 5 50 $ 1 Total Material Handling Cost * Note that now receiving and painting shops have the furthest to travel from the machine shop.
Draw the precedence diagram. adding to 66) Determine the Cycle Time Cycle Time = Production Time Available Per Day Units Required Per Day 480 minutes = 12 minutes per unit 40 units Note: Assumption is 8 hours and 60 minutes of work per hour Cycle Time = Note: Time in between the completion of units . and sequence requirements for the component as provided below. D F E G. assembly times. determine the efficiency of this production line. Task A B C D E F G H I All tasks Performance Time (min) 10 11 5 4 12 3 7 11 3 66 minutes Task Must Follow -A B B A C. all tasks together take 66 minutes to produce one wing component).151 Chapter 9 Example: Line Balancing Boeing wants to develop a precedence diagram for an electrostatic wing component that requires a total assembly time of 66 minutes (Note: this is an important fact. H Precedence Diagram (note: minutes per task. and based on demand of 40 units per day and 480 productive minutes available per day. balance the production line. Staff gathered tasks. Finally.
Layout Strategies 152 Determine the Minimum Number of Workstations ∑ Minimum Number of Workstations= n i =1 Time for Task i Cycle Time 66 minutes Minimum Number of Workstations = = 5. Group the Stations Note: the grouping combines tasks. Station #2 has to wait one minute before station #4 is finished.7% ( 6 ) × ( 12 ) ∑ Task Times Efficiency = . A similar problem exists for stations #5 and #6. The only way to do so is to separate duties. However. The waiting time contributes to inefficiency in the system. look at station #1. slightly more than the ideal time. However. or two minutes less than needed. each workstation does its work and hands off to the next workstation. The task takes ten minutes. This means that the person and/or machine. must wait two minutes before station #3 is finished and one minute before station #2 is finished. Work is being accomplished simultaneously. They have to wait to receive components from #4 and #3. There seems to be no other way to organize the system.5 or 6 stations 12 minutes Picture that we must have a unit completed every 12 minutes. Once the assembly line is active. also note that 6 x 12 stations means that the total time an assembly is in the system is 72 minutes. Calculate Efficiency Efficiency = ( Actual Number of Workstations ) × ( Largest Assigned Cycle Time ) 66 = 91. but it takes 66 minutes to make one. There are now 6 stations.
Answer Cycle time = Production time available 8 hrs *60 minutes/hr 480 = = = 12 minutes/cycle Units required 40 units 40 Work time required Cycle time Cycle time 38 minutes = = 3. E F G Determine the cycle time and the appropriate number of workstations to produce the 40 units per day. One layout – not necessarily optimal . and predecessor activities are given below. Task Time (Minutes) A 2 B 2 C 8 D 6 E 3 F 10 G 4 H 3 Total 38 minutes Predecessor(s) A C B D. times. Tasks.17 station 12 minutes/cycle i Minimum number of workstations = ∑t = 3.153 Chapter 9 Sample Problem A firm must produce 40 units/day during an 8-hour workday.17 workstations must be rounded up to 4 as 3 workstations would not be able to produce the required output.
Layout Strategies 154 Key Terms Assembly line: an approach that puts fabricated parts together at a series of workstations. product-oriented facility for building components Fixed-position layout: addresses the layout requirements of large. repair. and spaces/offices to provide for comfort. stationary projects such as ships and buildings Focused factory: a facility designed to produce similar products or components Focused work center: a permanent or semi-permanent product-oriented arrangement of machines and personnel Heuristic: problem solving using procedures and rules rather than mathematical optimization Job lots: groups or batches of parts processed together Office layout: grouping workers. labeling. bulky. high variety goods (also known as “job shop” or intermittent production) Random stocking: used in warehousing to locate stock wherever there is an open location Retail layout: an approach that addresses flow. its destination. and responds to customer behavior Servicescape: the physical surroundings in which a service takes place. and movement of information Process-oriented layout: groups like machines and equipment together for production of low volume. and how they affect customers and employees Slotting fees: fees manufacturers pay to get shelf space for their products Takt time: pace of production to meet customer demand Warehouse layout: a design that attempts to minimize total cost by addressing trade-offs between space and material handling . used in repetitive processes Assembly-line balancing: obtaining output at each workstation on a production line so that delay is minimized CRAFT: a computer program that systematically examines alternative departmental rearrangements to reduce total material handling costs Cross-docking: avoiding the placement of materials or supplies in storage by processing them as they are received for shipment. and routing of the product to the designated outbound vehicle Customizing: using warehousing to add value to a product through component modification. requires an information system that provides inbound product identification. and packaging Cycle time: the maximum time that a product is allowed at each workstation Fabrication line: a machine-paced. safety. allocates shelf space. their equipment.
155 Chapter 9 Work cell: an arrangement of machinery and personnel to focus on production of a single product or family of related products Formulas Cost Minimization in a Process Layout Minimize Cost = ∑∑ X ij Cij i =1 j =1 n n Where: n = total number of work centers or departments i. j = individual departments X ij = number of loads moved from department i to department j Cij = cost to mode a load from department i to department j Takt Time Takt Time = Total Work Time Available Units Required Total Operation Time Required Takt Time Workers Required = Assembly-Line Balancing Cycle Time = Production Time Available Per Day Units Required Per Day n i =1 ∑ Minimum Number of Workstations= Efficiency = Time for Task i Cycle Time ( Actual Number of Workstations ) × ( Largest Assigned Cycle Time ) ∑ Task Times .
2 Self-Study Quizzes Virtual Company Tours Additional Case Studies Additional Homework Problems Active Models .Layout Strategies 156 Supplementary Materials On Our Companion Web site www.xls Ch09Ex4.Arnold Palmer Hospital Video 9. Assistance with the end of chapter problems.xls Ch09Ex4.2.xls Active Models 9. virtual office hours help is available on .Laying out Arnold Palmer Hospital's New Facility Video Case.1.pearsonglobaleditions.1 Solved Problem 9.Facility Layout at Wheeled Coach On POM for Windows Excel OM Excel OM data files Ch09Ex1.Facility Layout at Wheeled Coach Ambulances Video Case.Process Layout Videos Virtual Office Hours Solved Problem 9.com/ heizer POM for Windows Excel OM Excel OM data files Ch09Ex1.1.xls On the DVD Video 9.
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