AMITY GLOBAL

BUSINESS SCHOOL Bangalore

MBA, Semester 2
Operations Management
Ms. Aarti Mehta Sharma
AMITY GLOBAL
BUSINESS SCHOOL Bangalore

Facility Layout 2
AMITY GLOBAL
BUSINESS SCHOOL Bangalore

Facilities Layout
The configuration of departments, work centers, and 3
equipment, with particular emphasis on movement of
work (customers or materials) through the system

• This could be for new plants or could be

• Improvements in layouts already in use to introduce
new methods and improvements in manufacturing
procedures.
AMITY GLOBAL
BUSINESS SCHOOL Bangalore

Importance of Layout Decisions

• Requires substantial investments of money and effort 4

• Involves long-term commitments

• Has significant impact on cost and efficiency of
operations
AMITY GLOBAL
BUSINESS SCHOOL Bangalore

Objectives of a good layout

• Provide enough production capacity
• Reduce material Handling costs 5

• Reduce Congestion
• Reduce accidents / hazards to personnel
• Utilize labor efficiently
• Provide for volume and product flexibility
• Provide ease of supervision
• Allow ease of maintenance
• Allow high machine / equipment utilisation
• The arrangement should be congruent with the flow of materials
• Sequence of equipments
• In addition to floor space, the vertical space should also be considered.
AMITY GLOBAL
BUSINESS SCHOOL Bangalore

Costs
• Cost of movement of materials from one work area to another
6
• Cost of space
• Cost of production delays, if any.
• Cost of spoilage of materials
• Cost of labor dissatisfaction and health risks
• Cost of changes, if any
• Cost of customer dissatisfaction due to poor service
AMITY GLOBAL
BUSINESS SCHOOL Bangalore

Basic Layout Types

• Product layouts
7

• Process layouts
• Fixed-Position layout
• Cellular Manufacturing
• Combination layouts
AMITY GLOBAL
BUSINESS SCHOOL Bangalore

• Product layout
– Layout that uses standardized processing operations to 8
achieve smooth, rapid, high-volume flow
• Suitable for assembling operations eg. Automobile industry
• No. of equipment large
• Volume of production large
• Variety of products is low ; Two products ---- two product
layouts
• Flow of materials
• Sequence of equipments
AMITY GLOBAL
BUSINESS SCHOOL Bangalore

Product Layout
Raw Station
Station Station
Station Station
Station
9
Finished
Station
materials 1
22 33 44 item
machining
machining Heating
Heating Painting
Painting
drilling

Material Material Material Material

and/or and/or and/or and/or

labor labor labor labor

Used for Repetitive or Continuous Processing

AMITY GLOBAL
BUSINESS SCHOOL Bangalore

10
AMITY GLOBAL
BUSINESS SCHOOL Wine mfg Bangalore

11
AMITY GLOBAL
BUSINESS SCHOOL Pizza Bangalore

12
AMITY GLOBAL
BUSINESS SCHOOL Bangalore

Advantages of Product Layout

• High rate of output
13

• Low unit cost

• Labor specialization not high
• Low material handling cost
• High utilization of labor and equipment
• Established routing and scheduling
• Routing accounting and purchasing
AMITY GLOBAL
BUSINESS SCHOOL Bangalore

Disadvantages of Product Layout

• Creates dull, repetitive jobs 14

• Poorly skilled workers may not maintain equipment or

quality of output
• Fairly inflexible to changes in volume
• Highly susceptible to shutdowns
• Needs preventive maintenance
• Individual incentive plans are impractical
AMITY GLOBAL
BUSINESS SCHOOL Bangalore

Process Layout / Job Shop production

15

• Equipment performing similar functions is grouped together

• Volume of manufacturing is low
• Variety of products ( each customer is unique)
• Example : Customised Cars
AMITY GLOBAL
BUSINESS SCHOOL Bangalore

Process Layout
Process Layout 16
(functional)

Drilling Heating Painting

Casting Machining Packaging

Used for Intermittent processing

Job Shop or Batch
AMITY GLOBAL
BUSINESS SCHOOL Bangalore

Process Layout
Milling
17

Assembly
& Test Grinding

Drilling Plating

Process Layout - work travels

to dedicated process centers
AMITY GLOBAL
BUSINESS SCHOOL Bangalore

18
AMITY GLOBAL
BUSINESS SCHOOL Bangalore

19
222 222 222
111 Drill Grind
Mill

22
444 3333

222
444

1111 2222 Assembly

33
33

44
111 333
33

44
333
33

4
111
3

333
111
Heat 111 Gear
333 Lathes
treat cutting 444
Exhibit
AMITY 8.2 GLOBAL Process Layout for a Machine Shop
BUSINESS SCHOOL Bangalore

20
AMITY GLOBAL
BUSINESS SCHOOL Bangalore

Advantages of Process Layouts

21

• Can handle a variety of processing requirements

• Not particularly vulnerable to equipment failures
• Equipment used is less costly
• Possible to use individual incentive plans
AMITY GLOBAL
BUSINESS SCHOOL Bangalore

Disadvantages of Process Layouts

• In-process inventory costs can be high 22

• Challenging routing and scheduling

• Equipment utilization rates are low
• Material handling slow and inefficient
• Complexities often reduce span of supervision
• Special attention for each product or customer
• Accounting and purchasing are more involved
AMITY GLOBAL
Fixed
BUSINESS SCHOOL Position Layout Bangalore

• The position of product is

fixed 23

• Tools, Men and materials

come to the product
• Manufacture of Large
products such as
locomotives, boilers, ships,
hospital etc
AMITY GLOBAL
BUSINESS SCHOOL Bangalore

Advantages
• Men and machines can be used for a wide variety of
24
operations producing different products
• Investment on layout is very small
• Worker identifies himself with the product and feels pride in
it.
• Cost and difficulty of transporting a bulky product is avoided
AMITY GLOBAL
BUSINESS SCHOOL Bangalore

Cellular Layouts
25

– Layout in which machines are grouped into a cell

that can process items that have similar processing
requirements
– The grouping into part families of items with similar
design or manufacturing characteristics
– A complete product or part of a product is
manufactured
AMITY GLOBAL
BUSINESS SCHOOL Bangalore

26
AMITY GLOBAL
BUSINESS SCHOOL Bangalore

•
27
AMITY GLOBAL
Process
BUSINESS Flows
SCHOOL before the Use of GT Cells
Bangalore

28
AMITY GLOBAL
Process
BUSINESS Flows
SCHOOL after the Use of GT Cells
Bangalore

29
AMITY GLOBAL
One worker cell
BUSINESS SCHOOL Bangalore

Machine
2 30
Machine
Machine 3
1

Materials in

Finished
goods out

Machine
Machine 4
5
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BUSINESS SCHOOL Bangalore

31
AMITY GLOBAL
BUSINESS SCHOOL Bangalore

Advantages
• Key enabler of increased production velocity and flexibility
• The reduction of capital requirements. 32

• Reduction of over production

• Products move through the manufacturing process one-piece
at a time, at a rate determined by customers' needs
• Shifts worker responsibilities from watching a single machine,
to managing multiple machines in a production cell.
AMITY GLOBAL
BUSINESS SCHOOL Bangalore

Service facility Layout

• Service facilities exist to bring together customers and
33
facilities ( banks, hospitals ).
• Banks are designed around customer receiving and servicing
• Hospitals are designed around technology( X ray / radiology /
pathology machines), processing of patients (receiving
patients, settling accounts ) and operation efficiency ( surgery,
gynecological, patient recovery).
• Easy entrance and parking space are an essential requirement
• Process Layout
AMITY GLOBAL
BUSINESS SCHOOL Bangalore

Arrangement of other facilities

• Receiving Department
34
- raw materials (vendor oriented services)
• Shipping Department
- finished goods are delivered to customers
End of the plant
• Store room
- raw materials, finished goods, partly finished goods and
supplies are stored
- close to the production centre
AMITY GLOBAL
BUSINESS SCHOOL Bangalore

• Inspection
- of purchased material (raw materials, parts,supplies) 35

- of work in process
- of finished groups
At every stage, every department
• Maintenance
- of machinery / building
- heating / air conditioning
- machine and equipment installation
- safety devices / fire protection
- collection and disposal of waste / garbage / refuse
AMITY GLOBAL
BUSINESS SCHOOL Bangalore

• Employee Facilities
36
- time clocks
- toilets
- drinking water
- cafeteria
- safety measures
• Other Facilities
- power generators
- water filters
- chilling plant ( close to the boiler room )
AMITY GLOBAL
BUSINESS SCHOOL Planning Bangalore

• By in house engg or planning department

• Depends upon the product 37

• Depends upon volume

• Determine process
• Determine flow of materials
• Decide upon equipment( also for material handling) and work
centres
• Determine storage requirement
AMITY GLOBAL
BUSINESS SCHOOL Bangalore

• Decide upon labor – direct / indirect

• Draw building specifications, floor plan 38

• Preparation of detailed layout planning

• Approval from Management
• Preparation of work schedule
• Construction starts
AMITY GLOBAL
BUSINESS SCHOOL Bangalore

Tools and Techniques

• Templates
• Line Balancing 39

• Analysing with Computers

• Travel chart method
• Load Distance method
• Systematic Layout Planning
AMITY GLOBAL
BUSINESS SCHOOL Load distance Bangalore

analysis method
• For comparison of alternative layouts
• Multiply actual distance moved and load (units) 40

• Try to minimize the same

Illustration
• Two layouts A and B are given
• Data consists of the facility's products, distance between
depts. and travel between depts.
• Determine the best layout
AMITY GLOBAL
BUSINESS SCHOOL Bangalore

Layout A
8 4 10 2 5 41

3 7 1 9 6
Layout B
7 1 9 6 3
4 10 2 5 8
AMITY GLOBAL
BUSINESS SCHOOL Bangalore
Dept. Dist bet dept(ft) Dept Dist bet dept
movement movement (ft)
combination combination
A B A B 42

1–5 30 30 3–9 30 20
1–7 10 10 4–5 30 30
1–9 10 10 4–7 10 10
1 - 10 10 10 4 – 10 10 10
2–5 10 10 5–6 10 10
2–6 20 20 6–9 10 10
2 – 10 10 10 7–8 20 50
3-6 40 10 8 - 10 20 30
AMITY GLOBAL
BUSINESS SCHOOL Bangalore

Products Department No. of products processed

Processing per month
Sequence 43

A 1-5-4-10 1000
B 2-6-3-9 2000
C 2-10-1- 9 3000
D 1-7-8-9 1000
E 2-5-6-9 2000
F 1-7-4-10 4000
AMITY GLOBAL
BUSINESS SCHOOL Bangalore

Product Load / pm Distance per product Load * Distance

Layout A Layout B Layout A Layout B

A 1000 70 70 70,000 70,00044

B 2000 90 50 1,80,000 1,00,000

C 3000 30 30 90,000 90,000
D 1000 50 90 50,000 90,000
E 2000 30 30 60,000 60,000
F 4000 30 30 1,20,000 1,20,000
Total 5,70,000 5,30,000
AMITY GLOBAL
BUSINESS SCHOOL Bangalore

Systematic Layout Planning

• Service facilities
45
• Material flow not critical
• Develop a “relationship chart” / Richard Muther’s
half – matrix / fish diagram
• Chart rates the relative importance of locating one
dep't close to another
• Ratings are indicated by code letters a,e,i,o,u,x
• Developed by trail and error
AMITY GLOBAL
Reasons (optional)
BUSINESS SCHOOL Bangalore

Code Reason
46
1 Type of customer
2 Ease of supervision
3 Common personnel
4 Contact necessary
5 Share same space
6 psychology
AMITY GLOBAL
BUSINESS SCHOOL Bangalore

Value Closeness Line code

47

A Absolutely Necessary
E Especially Important
I Important
O Ordinary
U Unimportant
X Undesirable
AMITY GLOBAL
BUSINESS SCHOOL Bangalore

48
AMITY GLOBAL
BUSINESS SCHOOL Bangalore

Nearness Diagram
49

Credit
Toy
Wine
Camera
Candy
AMITY GLOBAL
BUSINESS SCHOOL Bangalore

5 2 4
50

1 3
AMITY GLOBAL
Assembly
BUSINESS SCHOOL line balancing Bangalore

• Typically, sequence of tasks required to assemble a product is

dictated by its design. 51

• For many assemblies that consist of a large number of tasks,

there are a large number of ways to group tasks together into
individual workstations while still ensuring the proper
sequence of work.

• Assembly line balancing is a technique to group tasks among

workstations so that each work-station has, ideally, the same
amount of work.
AMITY GLOBAL
Assembly
BUSINESS SCHOOL line balancing Bangalore

• Example: if it took 90 seconds to assemble a pen, and the work

was divided evenly among three workstations, then each 52
workstation would be assigned 30 seconds of work content per
unit.

Basic assumptions:
• No idle time per workstations; and the output of the first
workstation immediately becomes input to the next
workstation.
• In the current example, there are no bottleneck workstations,
and the flow of pens through the line is continuous.
AMITY GLOBAL
Assembly
BUSINESS SCHOOL line balancing Bangalore

• Objective of assembly line balancing is to minimize the

imbalance among workstations while trying to achieve a 53
desired output rate.
• So either, one can minimize the number of workstations for a
given production rate or maximize the production rate for a
given number of workstations.
• Though typically carried out at the design stage of the
assembly line, line balancing is also required whenever there
is a change in product design and/or new product introduction.
AMITY GLOBAL
Assembly
BUSINESS SCHOOL line balancing Bangalore

• Input for assembly line balancing:

1. A set of tasks to be performed and the time required to 54

perform each task

2. The precedence relations among the tasks- that is, the
sequence in which tasks must be performed, and
3. The desired output rate or forecast of demand for the
assembly line.

• The first two requirements can be obtained from the product

design documents
• The third one is specified by the management.
AMITY GLOBAL
Assembly
BUSINESS SCHOOLline balancing: Example
Bangalore

• An activity consisting of three tasks: A, B and C.

 Task A is first, and takes 0.5 minutes 55

 Task B is next, and takes 0.3 minutes

 Task C is the last, and takes 0.2 minutes.

• Since, all the tasks must be performed to complete one part,

total time required to complete one part is
0.5+0.3+0.2 = 1 minute.
AMITY GLOBAL
Assembly
BUSINESS SCHOOLline balancing: Example
Bangalore

• Suppose that one worker performs all three tasks

(sequentially). 56

• Then in an 8-hour shift, the worker could produce –

480 parts/day.
AMITY GLOBAL
BUSINESS SCHOOL Line Balancing Bangalore

• Assembly line study

57
• Equally divides the work among workers
• No. of employees is minimised
• Most common is a moving conveyor that passes a series of
work stations in a uniform time interval called workstation
time cycle
• Assembly line balancing is the assigning of tasks to a series
of workstations in such a manner that each workstation has
no more than can be done in the work station time
• Idle time across all workstations is minimized
AMITY GLOBAL
BUSINESS SCHOOL Bangalore

• Precedence relationship : the order in which tasks must be

performed in the assembly process. 58

• Precedence Diagram : circles represent tasks; arrows indicate

the order of task performance
• Workstation cycle time :
= production time per day
reqd output per day (in units)
• Nt (no. of workstations) = sum of task times
cycle time
AMITY GLOBAL
BUSINESS SCHOOL Bangalore

• Assign tasks to workstation 1, 2, 3 ….

59
• Na = actual no. of workstations
• Efficiency (idle time is minimised)
= sum of task times(T)
no. of workstations(Na) × workstation cycle time
AMITY GLOBAL
BUSINESS SCHOOL Illustration Bangalore

• The Model J Wagon is to be assembled on a conveyor

belt. 500 wagons are required per day. Production
60

time per day is 420 minutes, and the assembly steps

and times for the wagon are given in the table. Find
the balance that minimizes the number of
workstations, subject to cycle time and precedence
constraints.
AMITY GLOBAL
BUSINESS SCHOOL Bangalore

61

ASSEMBLY STEPS AND TIMES

FOR MODEL J WAGON
AMITY GLOBAL
BUSINESS SCHOOL
Task Task Description
Bangalore
Tasks that
Time must precede
A 45 Position rear axle
B 11 Hand fasten four screws to nuts A 62

C 9 Tighten rear axle B

D 50 Position front axle
E 15 Tighten front axle D
F 12 Position rear wheel # 1;fasten hubcap C
G 12 Position rear wheel # 2;fasten hubcap C
H 12 Position rear wheel # 3;fasten hubcap E
I 12 Position rear wheel # 4;fasten hubcap E
J 8 Position wagon handle shaft on front axle F,G,H,I
assemby
K 9 Tighten bolt and nut J
195
AMITY GLOBAL
Precedence GraphBangalore
BUSINESS SCHOOL

F 63

• A B C
G

D E H J K

I
AMITY GLOBAL
BUSINESS SCHOOL Bangalore

64

C = production time per day = 60 s * 420 min = 50.4

output per day 500
Convert to seconds as task time is in seconds

Minimum no. of workstations required

= 195 / 50.4 = 3.87 = 4
 AMITY GLOBAL
BUSINESS SCHOOL Bangalore
Remaining
Task Task time time
Station 1 A 45 5.4 idle
65
Station 2 D 50 0.4 idle
Station 3 B 11 39.4
C 9 30.4
F 12 18.4
G 12 6.4
Station 4 E 15 35.4
H 12 23.4
I 12 11.4
J 8 3.4idle
Station 5 K 9 41.4 idle
AMITY GLOBAL
BUSINESS SCHOOL Bangalore

• Efficiency = T = 195 = 0.77 66

NaC 5 * 50.4

77 %
AMITY GLOBAL
BUSINESS SCHOOL Bangalore
Quality of a good layout
• Minimise materials handling cost
• Effective use of available area 67

• Minimisation of production delays

• Improved Quality Control / Avoidance of unnecessary and
costly changes
• Minimum Equipment Investment
• Avoidance of bottlenecks
• Better production control
• Better Supervision
• Improved utilisation of labor
• Improved Employee Morale
AMITY GLOBAL
BUSINESS SCHOOL Bangalore

2. A company wants to add a new wing to its present

manufacturing shop to manufacture certain products. The68
two alternative layouts being considered are as below :
LAYOUT A
1 2 4 5 6
3 7
LAYOUT B
2 5 6
3
1 4 7
AMITY GLOBAL
BUSINESS SCHOOL Bangalore
Trips between Distances between Departments
departments Layout A Layout B
69

1–2 24 50
1–3 24 30
1–4 38 46
2–3 44 20
2–4 30 72
3–4 44 52
4–5 50 40
5–6 50 44
5–7 50 60
6-7 40 40
AMITY GLOBAL
BUSINESS SCHOOL Bangalore

Sequence of processing is given below. Use load distance

analysis to determine best layout
Products Sequence Batch size 70

P1 1-2-3-4-5-6-7 1400
P2 1-2-4-5-6-7 200
P3 1-3-4-5-6-7 1200
P4 1-3-4-5-7 300
P5 1-4-5-6-7 200
AMITY GLOBAL
BUSINESS SCHOOL Bangalore

3. Arrange six departments 1,2,3,4,5 and 6 in the facility

outline shown below so that the nearness priorities
71

shown in the TABLE are satisfied.

AMITY GLOBAL
BUSINESS SCHOOL Bangalore

Deptt 2 3 4 5 6
72

1. Reception 500 5 200 0 10

2.X Ray 10 300 0 8
3. Surgery 100 0 400
4.Examining rooms 0 15
5.Lab 3
6. Nurses station
AMITY GLOBAL
BUSINESS SCHOOL Bangalore

73

Department 1
Department 2
Department 3
Department 4
Department 5
Department 6
AMITY GLOBAL
BUSINESS SCHOOL Bangalore

4. X Agri products is planning to set up a regional warehouse

in north eastern Maharashtra. M/s Shivajirao & Co..M/s 74
Patil Farms,M/s Aras & Brothers, and M/s Jambhekar &Co.
are its main clients in that area. The business volume with
the above four is roughly in the ratio 5:4:3:2 . The distances
of the clients from Lakshmipur, a town in that area :
Shivajirao 50 km North
Patil 100 km North east
Aras 75 km South West
Jambhekar 45 km east
Where, wrt Lakshmipur, should X Agri Poducts locate their
warehouse ?
AMITY GLOBAL
BUSINESS SCHOOL Bangalore

5. Manufacturing Engineers at Suny

Manufacturing were working on a new 75

remote controlled Monster Truck. They

hired a production consultant to help them
determine the best type of production
process to meet the forecasted demand fo
this new product. The consultant
recommended that they use an assembly
line that will produce 600 Monster Trucks
per day to meet the demand forecast.
AMITY GLOBAL
BUSINESS SCHOOL Bangalore

The workers of the plant work 8 hours per 76

day. The task information for the new

Monster Truck is given in the table :
AMITY GLOBAL
BUSINESS SCHOOL Bangalore
Task Task Time(in secs) Preceding Tasks
A 28
B 13
77
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
Total 236
AMITY GLOBAL
BUSINESS SCHOOL Bangalore

• Draw the precedence diagram

78

• What is the reqd cycle time ?

• Calculate Nt and Na
AMITY GLOBAL
BUSINESS SCHOOL Bangalore

• C= 60 * 480 / 600 = 48 s
79

• Nt= 236 /48 = 4.92 = 5

• Na = 6