Chapter Two

Systems Design and Capacity

 Introduction
 All operations managers are designers, because design is
the process of satisfying people’s requirements through
shaping or configuring goods, services and processes.
 This chapter looks at how managers can manage the
design of the goods and services they produce and the
processes that produce them.
 At the most strategic level ‘design’ means shaping the
networks of operations that supply goods and services. At
a more operational level it means the arrangements of the
processes, technology and people that constitute
operations processes.
Part- 1
 What Is Design?
 Design is the process of structuring of
components parts /activities of products so that
as a unit it can provide value for the customer.
☞Self check question

Design is strategic or a tactical issue?

Explain.
 Objectives of design
 To be competent (by offering new products or
services).
 To reduce cost and increase profit.
 To design products/services that have customer
appeal
 To increase quality and level of customer
satisfaction
 1. Product Design
 Product design defines a product’s characteristics, such as
its appearance, the materials it is made of, its dimensions
and tolerances, and its performance standards.
 Product is designed in terms of size, color, shape, content
and other related dimensions.
 Product design is prerequisite for production, along with a
forecast of production volume.
 Product Design

• Good design satisfies customers,

communicates the purpose of the product or
service to its market and brings financial
rewards to the business.
• The objective of good design, whether of
products or services, is to satisfy customers by
meeting their actual or anticipated needs and
expectations.

7
 Strategies for New-Product Introduction
There are three fundamental ways to view the
new product introduction:
 Market pull: Sell what the Market
wants(Design a product according to customer
needs and then, try to adapt our processes)
 Technology push philosophy: Sell only what
we can make(Design products according to
the limits of our processes)
 Inter functional philosophy: inter functional
and interactive process of customers,
marketing, finance, engineering and other
related functional areas.
 Product development
process
 Idea generations: Ideas for new products can rise
from a variety of sources such as Customer,
Competitors, R&D and New technology
 Screening: is to eliminate ideas that do not appear to
have a high potential for success by conducting
feasibility study such as market, financial and
technical
 Initial product design: It is the translation of ideas in
to products
 Prototype construction: a prototype may be made by
hand from some artificial materials such as plastics,
mud, clay, wood etc.
 Prototype testing: it is aimed at verifying marketing
and technical performance.
 Final product design: it is tested further to ensure
final product performance and go for full scale
operations.
Product development process
 Product design
techniques
 Factors to be considered while designing the product
 Robust design
 Modular design
 Computer-aided design (CAD)
 Computer-aided manufacturing (CAM)
 Virtual reality technology
 Value analysis
 Environmentally friendly design
 Robust Design
 Robust Design: Design that results in
products or services that can function
over a broad range of conditions
 Robust product or process perform
correctly even in the presences of inner
and outer noise factors
 Modular Design
 A modular design is an approach for product designing
which is used to produce a complete product by
integrating or combining smaller parts that are
independent of each other.
 With the modular design approach, a complex product
(for example, a car) can be broken down or divided into
smaller and simpler components that are independently
designed and manufactured.
 Each of these individual components is then integrated
(or assembled) together to form the final product.
 Computer Aided Design (CAD)
 Using computers to design
products and prepare
engineering
documentation
 Shorter development
cycles, improved accuracy,
lower cost
 Information and designs
can be deployed
worldwide
 Computer-Aided Manufacturing (CAM)
 Utilizing specialized computers and
program to control manufacturing
equipment
 It is used to design production process
and control machine tools and material
flow through programmable automation.
 Benefits of CAD/CAM
1. Product quality
2. Shorter design time
3. Production cost reductions
4. Database availability
5. New range of capabilities
 Virtual Reality Technology
 Computer technology used to develop an
interactive, 3-D model of a product from the basic
CAD data
 Allows people to ‘see’ the finished design before
a physical model is built
 Very effective in large-scale designs such as plant
layout
 Value Analysis
 Focuses on design improvement during
production
 Seeks improvements leading either to a better
product or a product which can be produced
more economically
 Ethics and Environmentally Friendly
Designs
It is possible to enhance productivity, drive
down costs, and preserve resources
The Ethical Approach
1. View product design from a systems
perspective
2. Consider the entire life cycle of the product
Goals for Ethical and Environmentally Friendly
Designs
1. Develop safe and more environmentally sound
products
2. Minimize waste of raw materials and energy
3. Reduce environmental liabilities
4. Increase cost-effectiveness of complying with
environmental regulations
5. Be recognized as a good corporate citizen
 Guidelines for Environmentally Friendly
Designs
1. Make products recyclable
2. Use recycled materials
3. Use less harmful ingredients
4. Use lighter components
5. Use less energy
6. Use less material
 2. Service Design
 Service is an intangible product which is
produced and consumed at the same time.
 It is the specifications of how the service
should be delivered.
 Service typically includes direct interaction with
the customer
 Cost and quality are still determined at the
design stage
 Delay customization
 Modularization
 Reduce customer interaction, often through
automation
 Service Strategy
 Treatment of the customer
 Speed and convenience of service delivery
 Price
 Variety
 Quality of the tangible goods
 Unique skills that constitute the service offering
 Factors to be considered while designing services
 Customer contact: It can be high or low
 Service recovery: is the ability to quickly
compensate for the failure and restore if
possible.
 Cycle of Service: is delivered in a cycle of
services beginning with the point of initial
customer contact and proceeding until the
entire service is completed.
 Service guarantee: It will help the service
provider to build confidences of the customers
towards their service quality level.
What do we mean by Quality?
 Dimensions of Service Quality
1. Tangibles
 The physical appearance of
the facilities, staff, buildings
etc..
 Does the equipment appears
modern?
 How clean is the company ?
 How visually attractive the
company appears the
customer?
 Dimensions of Service Quality
2. Reliability
 Ability to perform the
promised service
dependably and accurately
 Indicating the actual capacity
of fully meeting expectation.
 The ability to complete the
same level of service:
o On time
o Consistently
o Error free, every time
 Dimensions of Service Quality
3.Responsiveness
 Willingness to help and
provide prompt service to
the customer.
 I want it:

 Providing a healthy environment

for employees–employer
relationships and also complying
with timetables and deadlines.
 Dimensions of Service Quality
4. Assurance
 Ability to convey trust and
confidence
 Some of the features of
assurance are:
• Competence
• Effective communication
• Credibility and secularity
• Courtesy of employees
– Politeness
– Respect
– Confidentiality, and
– Friendliness
 Dimensions of Service Quality
5. Empathy
 Ability to be approachable.
“I know exactly how you feel”
 Caring
 Individualized attention the
company provides its customers.
o Is the customer service
representative approachable?
o Does the customer service
representative seem sensitive?
o Is the customer service
representative trying to understand
the needs?
 3. Process Design
 Product design dictates what to produce
whereas process design implies how to
produce.
 A major decision for an operations
manager is finding the best way to
produce so as not to waste our planets
resource.
 Process flow design, focuses on
determining how raw materials, parts,
subassemblies, or people flow as they
move through the plant.
 Process Selection
 Its refers to the way an organization
chooses to produce its goods or proved
its services.
 Process selection requires a thorough
understanding of materials and their
properties, existing technology, and the
desired property of the final product.
 Process selection occurs when new
products or services are being planned.
However it will also occur periodically due
to technological or demand changes.
 Consideration Selecting the Process
 Make or buy decision: the first step in process
planning is to consider whether to make or buy
some or all of a product or to sub contract some
or all of the service.
 In make or buy decision, a number of factors are
usually considered such as:
 Availability of capacity (i.e. equipment,
skills and time)
 Availability of Expertise
 Quality considerations
 The nature of demand i.e. high or low
 Cost of production
 Types of Process
 A process, by the type of product flow, is classified into two broad categories:
intermittent operations and repetitive operations:
 Intermittent(dis-continuous) operations: used to produce a variety of
products with different processing requirements in lower volumes. can be
divided into project processes and batch processes.
o Project processes is used to produce a unique product such as a
work of art, a concert, a building and the like. Each unit of these
products is produced as single units. It is difficult to automate a
project because they are only done once.
o Batch processes are used to produce small quantities of products in
groups or batches based on customer orders or product
specifications. For example in a hospital, there is a blood bank, an X-
Ray department, a pathological laboratory and so on. The flow
through these departments depends of the exact needs of the
patients.
 Types of process
 A process, by the type of product flow, is classified into two broad
categories: intermittent operations and repetitive operations:
 Repetitive operations: are used to produce one or a few
standardized products in high volume. Repetitive operations can be
divided into line processes and continuous processes.
o Line processes are designed to produce a large volume
of a standardized product for mass production. With line
processes the product that is produced is made in high
volume with little or no customization.
o Continuous processes operate continually to produce a
very high volume of a fully standardized product. In
continuous processes moves without stopping through
the facility. Examples include petroleum refineries;
electric generation, liquid and powder detergent .
 Types of process
 Process classification based on the ‘type of
customer order’:
 Make- to- order process: product is
designed and produced entirely to
customer’s specification
 Make- to- stock : The customers take the
product from the stock if the price is
acceptable.
MTS and MTO Comparison
 Process Selection Decision
 Line flow and make to stock. Example oil
refinery & flour milling
 Line flow and make to order. Example
automobile assembly & electric utility
 Intermittent flow & make to stock. Example
furniture & fast food
 Intermittent and make to order. Example
restaurant & hospital
 Project and make to stock. Example
speculation home & commercial paintings
 Project & make to order. Example buildings &
ships.
 Factors that influence process selection
 Capital requirement: Continuous flow
requires more capital
 Market conditions: continuous flow which
produce high volume products
 Labor: intermittent and project flow
require skilled labor.
 Flexibility: intermittent and project flows
can be easily adjusted
Part- 2
 4. Strategic Capacity Planning
 Capacity is ‘the ability of hold, receive,
store or accommodate’.
 Capacity is the maximum output that can
be produced over a given period of time.
 Capacity is the amount of resource inputs
available relative to output requirement
over a particular period of time.
 Factors affecting Capacity
 The external factor includes: government
regulations (e.g. working hours, safety,
pollution etc.), union agreement, and suppliers
capabilities.
 The internal factor includes: product and
service design, personnel and jobs( worker
training, motivation learning job content and
methods), plant lay out and process flow,
equipment capabilities and maintenance,
materials management, quality control system,
product mix decision, and management
capabilities.
 Capacity Strategy
 There are three major strategies for adding
capacity:
 Proactive: management anticipates future
growth and builds the facility
 Neutral: This is the balanced strategy i.e.
additional capacity becomes available when
demand is about 50% of total capacity.
 Reactive: when a reactive strategy is adopted,
the plant capacity is not added until all of the
planned output from the facility can be sold.
Measures of Capacity
Measures of capacity
Example 2: The Sara James Bakery has a plant for processing
breakfast rolls. The facility has an efficiency of 90%, and the effective
capacity is 80%. Three process lines are used to produce the rolls. The
line operate 7 days a week and three 8 hours shift per day. Each line
was designed to process 120 standard rolls per hour. What is designed
capacity? Rated capacity?
Given Required
Number of lines = 3 Designed capacity?
Number of hours = 7 days x 24 hours per day Rated capacity?
= 168hours
Number of rolls per hours = 120
Effective capacity = 80%
Efficiency capacity = 90%
Solution
Designed capacity = Number of lines x Number of hours x Number of
rolls per hours
= 3 x 168 x 120
= 60,480
Rated capacity = Design capacity X Effective capacity X Efficiency
capacity
= 60,480 x 0.8 x 0.9 = 43,545.6
Example 3: Bakery Example
•Actual production last week = 148,000 rolls
•Effective capacity = 175,000 rolls per week
•Design capacity = 1,200 rolls per hour
•Bakery operates 7 days/week, 3 with line of processing
and - Eight hour shifts
Design Capacity = ?
Utilization = ?
Efficiency = ?
Capacity cushion?
 Capacity Planning Decision
 The objective of capacity planning is to specify
which level of capacity will meet market demand
in cost efficient way.
 Capacity planning is generally viewed in three
time duration:
 Long range:- Greater than one year when
productive resources take a long time to acquire
or dispose of.
 Intermediate range: - monthly or quarterly plans
for the next 6 to 18 months.
 Short range: - less than one month. This is tied
into the daily or weekly scheduling process
 Steps to make sound Capacity
Decisions

No. of machines = processing and set up hours required for year’s demand,
Summed over all products
Required
Hrs available from one machine per year ,after 𝑑𝑒𝑑𝑢𝑐𝑡𝑖𝑛𝑔 desired cushion
 Steps to make sound capacity
decisions
Step 2: Identify gaps :
 A capacity gap is any differences (positive or negatives) between
projected demand and current capacity.
 Identifying gaps requires use of the correct capacity measures.
 Complications arise when multiple operations and several resource
inputs are involved.
Example: Grandmother’s chicken restaurant is experiencing a boom in business.
The owner expects to serve a total of 80,000 meals this year. Although the chicken
is operating at 100% capacity, the dining room can handle a total of 105,000 diners
per year. Based on the following forecasted demand for the next 5 years, determine
the capacity gap.

Year Meals Capacity Gap Demand Capacity

1 90,000 90,000 - 80000=10,000 capacity is positive
2 100000 100,000 - 80000= 20000 capacity is positive
3 110000 110,000 – 80,000=30,000 110,000- 105,000 =5000
4 120,000 120,000 -80,000 = 40000 120,000-105,000=15,00
5 130000 130,000-80,000 = 50,000 130,000 -105,000 =25,000
For the first two years the capacity of dining room (105,000) is greater than demand. Capacity
gaps exist for the last three years as shown above.
 Steps to make sound capacity
decisions
Step 3: Develop alternatives:
 After determining capacity gap, the next logical step is to develop
alternative plans to cope with projected gaps.
 One alternative is to do nothing and simply lose orders from any
demand that exceeds current capacity.
 Other alternative are various timing and sizing options for adding new
capacity.
 Additional possibilities includes: expanding at a different locations and
using short term options such as overtime, temporary workers, and
subcontracting.
Step 4: Evaluate the alternatives:
 The managers evaluate each alternative, both quantitatively and
qualitatively.
Step 5: Make Decision:
 Finally, based on the evaluation results, the manager must make the
choice.
 Tools for Capacity Planning
 Waiting line models:
 It is the arrival time between jobs or customers vary and the
processing time may vary from one customer to the next.
Example an airport ticket counter, a machine center , or a
central computer.
 It is use probability distribution to provide estimate average
customer delay time, average length of waiting lines, and
utilization of the work center.
 Simulation:
 It can identify the process’s bottlenecks and appropriate
capacity cushion even for complex process with random
demand patterns with predictable flows in demand during a
typical day.
 Decision trees:
 It is a systematic model of the sequence of steps in a problem
and the conditions and consequences of each step.
Part- 3
 5. Facility Location and Layout
 Facility location:
 Facility location decisions are, strategic, long term and non-repetitive
in nature.
 Without sound and careful location planning in the beginning itself,
the new facility may pose continuous operating disadvantages, for
the future operations.

 When does a location decision arise?

 A new facility is to be established.
 When expansions are restricted by a poor site
 When the growing volume of the business
 when new economic, social, legal or political factors are emerged
 Location option
 Managers generally consider four options in
location planning.
 Expand an existing facility
 Add new location while retaining existing ones
 shut down at one location and move to another
 Finally, the organizations have the option of doing nothing.
 Location Decision Hierarchy
 Global- international:
 Decision makers who are considering expanding in to a
new country must consider:
 International trade issues (currency exchange risk, balance of
trade, quotas, tariffs etc.)
 Market access issues( such as free trade agreement, consumer
sentiment towards imported goods)
 labor issues( availability, wages , skill and training, and
regulations)
 Political concerns (stability of current regime, risk of asset
nationalization, local owner ship laws etc.)
 Cultural issues (compatibility of business practices and products
with local culture)
 Legal issues(environmental regulations, accounting &reporting
requirements etc)
 Location Decision Hierarchy
 Regional considerations:
 Decision makers who are considering expanding in to a new region
must consider:
 Supply issues: availability of material inputs
 Proximity to market: select the region which is near to the major
market
 Transportation facility
 Climate: select the region with favorable climate
 Community considerations:
 Choice of community depends on the following factors:
 Community attitudes: with positive attitudes towards the
company.
 Community government and financial incentives: Local
government may be evaluated in terms of financial incentives
they offer, taxation polices, peace and securities etc.
 Community facilities: is concerned with the availability of schools,
churches, medical facilities, residential housings, recreational
opportunities, highways etc.
 Location Decision Hierarchy
 Site considerations:
 The followings are the basic factors that influence site selection:
 Size and cost of the site: while selecting exact site, consider the
size of the site and its cost
 Drainage and soil condition: poor drainage leads to
accumulations of water around the plant which may be harmful
for some organization.
 Land development cost: cost related to excavation, grading,
filling, construction of road, sidings, etc.
 Utilities: selection of site is influenced by cost of acquiring and
using utilities like electricity, natural gas, water as well as
disposal facilities.
 Access concerns: select the site which is easily accessible for
customers, suppliers, utilities and other concerned bodies.
 Methods of Evaluating Potential Locations
1. Factor Rating Method:
 It is useful for evaluating a given alternative and comparing
alternatives.
 It can help decision makers to avoid placing too much emphasis
on the wrong factors.
 Multiple factor rating system can be used to compare the
attractiveness of several locations on the basis of more than
one criterion.
 Factor rating system approach requiring only six steps:
 Identify the specific criteria/factors to be considered in selecting a
site.
 Assign a weight to each factors, Typically weight sum to 1
 Select a common scale for rating each factor (for example 1-100)
 Rate (score) each potential location on each of the factors.
 Multiply each factor’s score by the weight assigned to that factor
 Sum up the weighted scores for all of the factors and select that
Example: To illustrate the factor rating system, consider the following
fire extinguisher site selection problem. Three potential sites have
been identified. Management has decided to use the following criteria
and has assigned the following weights to each of the based up on
their relative importance. The three locations are then related on each
of these factors and a total score for each location is calculated as
follows: Location rating 1 to 100
  Where 1 is bad and 100 is good Weighted score
Factor/criteria Weight Site A Site B Site C Site A Site B Site C
Convenience for customer 0.2 60 70 65 12 14 13
Safety 0.1 75 85 60 7.5 8.5 6
Land cost 0.25 50 60 80 12.5 15 20
Availability of workers 0.05 90 70 75 4.5 3.5 3.75
Forecasted sales volume 0.15 80 90 85 12 13.5 12.75
Crime statistics 0.1 60 50 65 6 5 6.5
Cost of living 0.15 70 55 70 10.5 8.25 10.5
Total 1.00       65.00 67.75 72.5

Site ‘C’ is better because it has the higher composite score.

 Methods of Evaluating Potential Locations
2. Location Break Even Analysis:
 It is useful to draw location break even charts which could aid in
deciding which location would be optimal.
Example: The location of a tractor factory in site A will result in certain
annual fixed costs, variable costs and revenue. The figure would be different
for site B and C. The fixed cost, variable cost and price per unit for the three
sites are given below. Which location is best?
Site FC variable cost/unit
A 10,000 60
B 30,000 40
C 90,000 20
 Solution
i. Graphical method
Compute TC for two different output levels (say 0 units and 5000 units).
Case1. TC at zero output level
If Q=0, then TC=FC
Case2. TC (in $) at 5000 output level
Site FC Total variable cost Total cost (FC+TVC)
A 10,000 60X5000=300,000 310,000
B 30,000 40X5000 =200,000 230,000
C 90,000 20X5000=100,000 190,000
Annual cost Site A. TC= 310,000

Site B. TC= 230,000

Site C. TC= 190,000

90
30
10 Range1 Range 2 Range 3
0 1 3 Quantity (in ‘000’s)
 Cont’d
 Using break even analysis, determine the break even quantity.
Range1. Equate the cost equation of site A&B, that is:
10,000+60Q =30,000+40Q, then Q=1000 units
Range 2.Equate the cost equation of site B&C that is:
30,000+40Q = 90,000+20Q, then Q=3000 units
Range3. At range 3, Q> 3000
Thus, if output is less than 1000 unit, location A is best. If output is between 1000 &
3000 units, site B is best. For output level greater than 3000 units, site C is best.
 Cont’d
ii. Profit Analysis Method:
 Given the above example, which site is best for expected demand of 2000
units if price per unit is 75, 68 &80 for site A, B, &C respectively?
Solution
Calculate the total profit for each site at 2000 output level and select the site with
the highest profit. Profit = TR-TC. Accordingly,
Profit for site A= (75X2000) - [10,000 + (60X 2000)], Profit = $20,000
Profit for site B= (68X2000) - [30,000 + (40 X 2000)], then profit = $26000
Profit for site C= (80 X 2000) - [90,000 + (20X 2000)], then, profit=$30,000
Thus, site C is the best location.
 Methods of Evaluating Potential Locations
3. Centre of Gravity Method:
 Is a quantitative method for determining the optimal site for a facility
based up on minimizing total distribution cost.
 The first step in the center of gravity method is to locate each of the
existing retail operations on the X and Y coordinate grid map.
 The purpose of the gird map is to establish relative distance between
the sites.
 The center of gravity or the site for distribution facility is then found by
calculating the X and Y coordinate that result in minimizing the
distribution costs among all facilities.
 To determine the site the following formula can be used.
 dixVi diyVi
Cx = Cy =
Vi Vi
Where, Cx is X coordinate of the center of gravity
CY = Y Coordinate of the center of gravity
Dix = X Coordinate of the ith location
Diy = Y Coordinates of the ith location
Vi = volume of goods transported to the ith location
 Cont’d
Example: A refining company needs to locate an intermediates ware house
facilities between its processing plant in place M and its major distributors B,
C, D & E. The following shows the coordinate map for both the plants and
distributors.
500
*E (25,450)
400 D *(350,400)
C *(450,350)
300
*(308,217) center of gravity
200
B *(400,150)
100
M *(325, 75)
0 100 200 300 400 500
More over shipping volume from plant M to major distributor are given as follows
Location M B C D E
Gallon of gasoline
Per month (000,000) 1500 250 450 350 450
Cont’d
 Facility Layout
 Facility layout refers to an optimum arrangement of
different facilities including man, machine, equipment,
materials, etc.
 Facility lay out is a decision about the physical
arrangement of anything that consumes spaces
 The objectives of facility lay out is to allow workers and
equipments to operate most effectively through
appropriate arrangement of resources.
 The facilities layout is a strategic decision, if a layout
once implemented cannot be easily changed and costs
of such changes are substantial.
 A poor layout will result in continuous losses in terms of
higher efforts for material handling, more scrape and
rework, poor space utilization etc.
 Reasons for Layout Decisions
 The most common reasons for redesign of lay out
include:
 Inefficient operations (e.g. high cost,
bottlenecks/unbalanced process, excessive material
handling costs, unnecessary workers movement,
poor space utilization etc.).
 Accidents or safety hazards (high interference from
machine such as excessive noise, vibration,
fumes/smoke and heats and the like that emitted from
machine).
 Changes in the design of products or services
 Introduction of new products or businesses or
changes in the volume of out put
 Changes in methods or equipments
 Types of Layout
1. Product Layouts:
☞ It is equipments are arranged based on the sequence of
operation, and products are move in a continuous path from one
department to the next.
☞ Continuous flow (mass production) processing arrangements
are usually organized by product layout.
Advantages Disadvantages
 Faster processing rates due to  One breakdown in a machine can cause
mechanized fixed path an entire line to shut down
 Low unit cost due to high volume  The jobs on production lines may provide
 Routing and scheduling are little satisfaction to workers due to the
established in the initial design of the high level of division of labor and the
system monotony tasks
 Less unproductive time due to  Difficult to avoid machine interference
changes in processes and/or materials like excessive noise, vibration etc.
 Labor specialization reduces training  The system is fairly inflexible in response
costs and time to changes in product design
 Low resource utilization for low volume
products or services
 Types of Layout
2. Process layout:
☞ It is designed to process items or provide services that involve a
variety of processing requirements.
☞ Process lay out group departments/workstations according to
functions or type of activities performed.
☞ Process layout consists of functional groupings of machines or
labors that do similar works.
Advantages Disadvantages
 Because of its flexibility, process layout is  Handling and transportation costs are
less vulnerable to changes in product mix high ,since products must be moved
or design. frequently between departments
 Diversity of jobs offer more satisfaction to  Routing and scheduling is continual
workers challenges
 Resources are relatively general purpose  higher supervisory costs than with
and less capital intensive. product layout
 Systems are not vulnerable to equipment  Processing rates tends to be slower
failure  Productive time is lost in changing from
 It is easy to avoid machine interference one product or services to another.
 Types of Layout
3. Fixed Positional Layout:
☞ The item being worked on remains stationary, and workers,
materials, and equipments are moved about as needed.
☞ The construction of large items, such as heavy machine tools,
airplanes, buildings, power plants, dams and the like is usually
accomplished in a fixed place
☞ Because of the many divers activity carried out on large projects
and because of the wide range of skills required, special efforts
are needed to coordinate the activities, and the span of control
can be quite narrow.
☞ Fixed position layouts are widely used for farming, firefighting,
road building, home building, remodeling and repair, and drilling
for oil.
 Designing Product Layout
 Line Balancing :
☞ Line balancing is a procedure that can be used to optimize the
assignment of tasks to work centers.
☞ The goal of line balancing is to obtain task groupings that
represent approximately equal time requirements.
☞ This minimize the idle time along the line and results in a high
utilization of labor and equipment.
☞ Idle time occurs if task times are not equal among workstations;
some stations are capable of producing at higher rate than
others.
☞ Lines that are perfectly balanced will have a smooth flow of
work as activities along the line are synchronized to achieve
maximum utilization of labor and equipment.
 Cont’d
 Terminologies in line balancing:
☞ Desired output: the rate of output that is expected to be attained
during operating time
☞ Operating time: total available time during specific period that used
for operation
☞ Cycle time: is the maximum time allowed for work on a unit at each
work station
☞ Task: is an element of work.
☞ Task length: the amount of time required to complete a single task
☞ Precedence relationship: orders in which the tasks must be
performed in the process
☞ Assignment rule: is rule by which individual tasks are going to be
assigned to the work station
☞ Work station: a physical location where a particular set of tasks is
performed
☞ Work center: a physical location where two or more identical work
stations are located
☞ Productive time per hour: the number of minutes in each hour that
a work stations is working on the average.
 Cont’d
 An assignment rule is a heuristic that establishes the
bases for choosing an elemental task for assignment to
a work station.
 There are five rules:
☞ Longest task first: assigning the task with the longest
time first
☞ Shortest task first: assigning the task with the shortest
time first
☞ Most number following: assigning the tasks with the
largest number of followers first
☞ Least number following: assigning the tasks with the
least number subsequent tasks first
☞ Ranked positional weight: assign the tasks whose sum
of task times of each following task is longest.
Cont’d
 Example

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
 Cont’d

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
 Cont’d

Performance Task Must Follow 480 (8*60) 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 CycleB 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
H 11 E n
Minimum A ∑ TimeB for taskFi G
I 3 G, H 4
number of = i = 1 3
Total time 66 workstations Cycle Dtime
12 11 I
= 66 / 12
E H
= 5.5 or 6 stations
Figure 9.13
 Cont’d
480 available
mins per day
Performance Task Must Follow
Time Task Listed 40 units required
Task (minutes) Below Cycle time = 12 mins
A 10 — Minimum
B 11 A workstations = 5.5 or 6
Station 5 B
C 52
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 4 I
I 3 12 G, H 11
Station 6
Total
Stationtime 66
1 E H
Station Station
3 5

© 2006 Prentice Hall, Inc. 9 – 82

 Cont’d

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 workstations = 5.5 or 6
D 4 B
E 12 A
F 3 C, D
G 7 F
H 11 E ∑ Task times
Efficiency
I = 3
(actual number G,
of H
workstations) x (largest cycle time)
Total time 66minutes / (6 stations) x (12 minutes)
= 66
= 91.7%
Balanced delay = 100% - 91.7% = 8.3%
• Idle time = number of work station x cycle time - summation task time
Idle time = ( 12x6 ) – 66
Idle time = 6

84
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