Facility Layout

Chapter 2
Product, Process and
Schedule Design

Tran Van Ly
Industrial Engineering and Management
International University
22/03/17 1
Email: tvly@hcmiu.edu.vn
 Lecture outline
1. Introduction
2. Product design
3. Process design
4. Schedule design
5. Facilities design
6. Summary

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 I. Introduction
• This chapter focuses on the product, process and schedule design (PP&S) functions as they
relate to facilities planning.
• Alternative facilities plans can be generated are the following:
1. What is to be produced?
2. How are the products to be produced?
3. When are the products to be produced?
4. How much of each product will be produced?
5. For how long will the products be produced?
6. Where are the products to be produced?

- The first five questions are obtained from PP&S.

- The 6th question is answered by:
 Facilities location, or
 Schedule design,
(If having existing factories)

Fig 2_1: Relationship between product, process, and

schedule (PP &S) design and facilities planning

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 II. Product Design
• Product design involves both:
– the determination of which products are to be produced
– the detailed design of individual products

Fig 2_2 describes in

designing the layout and
handling system.

Fig 2_2: Exploded assembly drawing. 4

• Photographs and drawings allow the planner to visualize how the product is
assembled, provide a reference for part numbers and promote clearer
communications during oral presentations

Fig 2_3: Exploded parts photograph 5

The drawings should provide
part specifications and
dimensions in sufficient detail
to allow part fabrication.
(see figures 2-4 and 2-5) Fig 2_4: Component part drawing of a plunger.

Fig 2_5: Component part drawing of a seat 6

 III. Process Design
 Determination of how the product is to be produced
◦ Who should do the processing? (Which part of the
products should be made?)
◦ How the part will be produced?
◦ Which equipment will be used? (for the parts which
will be made in-house)
◦ How long will it take to perform the operation?

 Production methods are the most fundamental factor

affecting the physical layout

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 Process Design

 Within the process design, we need to consider following

issues:

1. Process identification
- Make-or-buy analysis
- Parts identification

2. Process selection
- How the product will be made
(operations, equipment, raw
material, etc.)

3. Process sequencing
- How components are put together
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 Process Design – 1. Process identification
Make-or-buy decisions
The scope of the facility depends on the level of
vertical integration

How are the make-or-buy decisions made?

◦ Can the item be purchased?
◦ Should we go for subcontracting?
- Supplier
- Contractor
◦ Can we make the item?
◦ Is it cheaper for us to make than to
buy?
◦ Is the capital available so that we can
make it?

 Managerial decisions requiring input from

finance, industrial engineering, marketing,
process engineering, purchasing, human
resources, etc.
Fig 2_6: The make-or-buy decision process 9
• The input to the facility planner
is a listing of the items to be

made/purchased.

 Parts list – component parts

of a product:

1. part numbers Fig 2_7: Parts list for an air flow regulator.

2. part name

3. number of parts per

product

4. drawing references

 Bill of materials - structured

parts list:
Fig 2_8: BOM for an air flow regulator 10
Fig 2_9: BOM for an air flow regulator

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 Process Design – 2. Process Selection

How the products will be made

6-step procedure:
1. Define elementary operations
2. Identify alternative processes for each operations
3. Analyze alternative processes
4. Standardize processes
5. Evaluate alternative processes
6. Select processes

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 Table 2_1: Route sheet data requirements

• Route
sheet -
output of
process
selection,
it identifies
processes,
equipment
and raw
materials

Fig 2_10: Route sheet for one component of the air flow regulator 13
 Process Design – 3. Process Sequencing

The method of assembling the product

• Assembly chart – shows how the components

are combined

• Operation process chart – gives an overview of

the flow within the facility

◦ A combination of route sheets and

assembly charts

• Precedence diagram – establishes precedence

relationships

Fig 2_11: Assembly chart for an air flow regulator

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• Route sheet provides

information on

production methods

• Assembly chart

determines how

components are put

together

• Operation process chart

is a combination of route
Fig 2_12: Operation process chart for the air flow regulator
sheet and assembly chart 15
Fig 2_13: Precedence diagram for the air flow regulator
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 IV. Schedule Design
• Schedule design provides answers to questions involving:
◦ Production quantity - lot size decisions
◦ When to produce - production scheduling
◦ How long to produce

• Schedule design decisions impact machine selection, number of machines,

number of shifts, number of employees, space requirements, storage
equipment, material handling equipment, personnel requirements, storage
policies, unit load design, building size, etc.

• We design facilities for major parts and operations

• What do we need to know to start designing our facilities

◦ Number of products demanded by the market
◦ Number of products to be produced
◦ Number of machines required
◦ Number of employees required
◦ Sequence of operations
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◦ Relationships between departments
 Schedule design - Marketing information
• Objective – market estimate
• Data from marketing:
 Production volumes
 Trends
 Future demands
Table 2_2: Minimum market information required for facilities planning

Ideal
Information
Provided by
Marketing

Table 2_3: Market analysis indicating the stochastic nature of future requirements for facilities planning 18
Qualitative
Information
from
Marketing

Table 2_4: Valuable information that should be obtained from Marketing and used by a facilities planner

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• 85% of the production volume is
Volume-variety chart – Pareto law
attributed to 15% of the production
line Volume-variety chart – Pareto law

• Therefore when facilities are

designed, top 15% of the items that
are produced should be considered
the most.
Fig 2_14: Volume-variety chart
for a facility when Pareto’s law
is applicable
More general items Items that are produced

produced everyday: maybe by special orders

Mass production area etc.: Job shop area

Volume-variety chart – Pareto law does not apply

•If no products dominate the

production flow, a general job shop
facility is suggested.

Fig 2_15: Volume-variety chart for a facility 20

where Pareto’s law is not applicable
 Schedule design – Process Requirements

Specification of process requirements has three phases:

1. Determination of the quantity to be manufactured for

each component

2. Identification of each equipment required by each

operation

3. Overall equipment requirements

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 Process requirements – Quantity determination

Scrap Estimates
◦ Determination of the quantity to be manufactured for each
component
For high volume production
The estimation of scrap

Reject Allowance Problem

◦ Determination the number of additional units to allow when the number
of items to produce are very few and rejects randomly occur
For low volume production
The cost of scrap is very high

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 1. Calculation of production requirements

• dk: the percentage of defective items

produced on kth operation.
• Ok: the desired output without defects
• Ik: the production input

Eq 2_1

Eq 2_2

• For products with n sequential operations, the expected number of units to start into
production at the first operation is shown (On: the required production volume for the final
product):
Eq 2_3

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Example 1: (page 51-52)
Calculating production requirements for a serial process with three operations

A product has a market estimate of 97,000 components and requires 3 processing

steps (tunning, milling and drilling) having defective estimates of d1 = 0.04, d2 = 0.01
and d3 = 0.03

Table 2_5: Summary of production requirements for Ex .1

 2. Calculations with rework.

I2: the number of defective items from the first operation

Fig 2_16: Process chart for operations with rework

Thus

Since

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Example 2: (Please see page 53-54)
Calculating production requirements for assembled products

The final products are 02 assemblies requiring 03 components (see data in fig 2-17).
Using the eq. 2_3 in calculating components requirements for assembled products.
The calculations required are also shown in this figure.

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Fig 2_17: Component requirements for assembles and subassemblies for Ex. 2
 3. Reject Allowance Problem.

  x: Number of good units

  p(x): Probability of producing exactly x good units
  Q: Quantity of production
  C(Q, x): Cost of producing Q units
  R(Q, x): Revenue from producing Q units
  P(Q, x): Profit from producing Q units P(Q, x) = R(Q, x) - C(Q, x)
E[P(Q)]: Expected profit when Q units are produced

E[P(Q)]

How do we actually decide Q?

The goal is having exactly x units of good items. No more, no less!

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 Eq 2_4

To maximize expected profit, Q can be determined

by enumerating over various values of Q
For most cost and revenue formulations the
equation is a concave function
X and Q are discrete variables, therefore p(X) is a discrete
probability function
If b is the number of defects then probability of each number
of defects may be different: P(b=1), P(b=2) etc

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 Example 3: (Please see page 55-56)
Calculating production quantities that will maximize profit

The revenue and cost functions can be given: Table 2.6: Probability distributiuons for the number of good castings (x) out of Q

Therefore the expected profit can be given:

The expected profit expression can be shown to

reduce to:

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Table 2_7: Profit from producing Q castings, with exactly x being good

Table 2_08: Expected profit from producting Q castings

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4. Estimation of number of machines required.
– The following deterministic model can be used to estimate the
machine fraction required:
Eq 2_5

F: number of machines required per shift

S: standard time (minutes) per unit produced
Q: number of units to be produced per shift
E: actual performance, expressed as a percentage of standard
time
H: amount of time (minutes) available per machine
R: reliability of machine, expressed as percent uptime

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Example 4: (Please see page 59)

Calculating the number of machines required

S = 2.8 minutes per part; Q = 200 units per shift; H = 480 minutes/shift; E = 0.95 and
R = 0.08

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5. Specifying total machine requirements.

Example 5: (Please see page 59)

Determining number of machines required based on machine fraction calculations

Table 2_09: Total equipment requirement specification example

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6. Machine assignment problem.
a: concurrent activity time (e.g: loading
and unloading a machine)
b: independent operator activity time (e.g:
walking, inspecting, packing)
t: independent machine activity time (e.g:
automatic machining time)
n’: ideal number of identical machines to
assign an operator
m: number of identical machines assigned
an operator
Tc: repeating cycle time
Io = idle operator time during a repeating
cycle
Im = idle time for each machine during a
repeating cycle Fig 2_18: Multiple activity chart for example 6 (2.7)
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Example 6: (Please see page 60-62)
Analyzing the assignment of operators to multiple machines

An ideal assignment: Eq 2_06

Eq 2_07

Eq 2_08

Eq 2_09

Co = cost per operator-hour; Cm = cost per machine-hour;  = Co / Cm

TC(m) = cost per unit produced based on an assignment of m machines per operator
Eq 2_10

Let  : the ratio of TC(n) to TC(n+1)

Eq 2_12

Eq 2_11
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If  <1: then TC(n) < TC(n+1), and n machines should be assigned;
If  >1: then TC(n + 1) < TC(n), and n + 1 machines should be assigned;
If  =1: then either n or n + 1 machines should be assigned.
E.x:
Suppose C0 = $15/ hour, Cm = $50/ hour.
Therefore,  = 0.30 and  = 0929.
Since  < 1, two machines should be assigned to an operator (example in
fig. 2-18: 3 machines).

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Fig 2_19: Assignment of 03 machines to 01 operator
 V. Facilities Design
• Once the product, process and schedule design decisions have
been made, the facilities planner needs to organize the
information and generate and evaluate layout, handling,
storage and unit load design alternatives.

• The 07 management and planning tools are the affinity

diagram, the interrealtionship diagraph, the tree diagram, the
matrix diagram, the contigency diagram, the activity network
diagram and the prioritization matrix.

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1. Affinity diagram

Fig 2_20: Affinity diagram example for reducing manufacturing leadtime

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2. Interrelationship diagraph
3. Assign raw
1. Form product 2. Assign families
materials to
families to manufacturing cells
their point of use

4. Keep receiving &

shipping close to
production
Fig 2_21 Interrelationship graph for facilities design

3. Tree diagram

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Fig 2_22 Tree diagram for formation of product families
4. Matrix diagram
Table 2_10

Note: L: Team leader

C: Team Coordinator
P: Team Participant

5. Contingency diagram
The contingency diagram, also known as the process decision program
chart, maps conceivable events and contingencies that might occur during
implementation. It is particularly useful when the project being planned
consists of unfamiliar tasks.
The benefit of preventing or responding effectively to contingencies makes it
worthwhile to look at these possibilities during the planning phase.

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6. Activity network diagram

Fig 2_23: Activity network diagram example for a production line expansion facilities design project.

Table 2_11: Weekly timetable for team work sessions

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 7. Prioritization Matrix
Table 2_12: Prioritization Matrix for the Evaluation of Facilites Design Alternatives

Table 2_13 Prioritization of Layout Alternatives based on WIP levels

Table 2_14: Ranking of Layouts by all Criteria

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Fig 2_24 Logical application sequence of the seven management and planning tools 43
 Fig 2_25 How the seven management and planning tools facilitate the planning of a facilities design project

Fig 2_26 A facilities design team using the

seven management and planning tools. 44
 VI. Summary
• Product, process and schedule design decisions
can have a significant impact on both the
investment cost for a facility and the cost
effective performance of the activities assigned
to the facility.

• The decisions made concerning product design,

process planning, production schedules and
facilities planning must be jointly determined in
order to obtain an integrated production system
that achieves the firm’s business objectives.
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