Layout Strategy

Objectives of the Layout Strategy Develop an economical layout which will meet the requirements of: product design and volume (product strategy) process equipment and capacity (process strategy) quality of work life (human resource strategy) building and site constraints (location strategy) This may be again a good time to reinforce the point that all of an organization’s strategies must work together.

What is Facility Layout Location or arrangement of everything within & around buildings Objectives are to maximize Customer satisfaction Utilization of space, equipment, & people Efficient flow of information, material, & people Employee morale & safety In addition to discussing what facility layout is, you might also raise some of the issues that may make it problematic.

Strategic Importance of Layout Proper layout enables: Higher utilization of space, equipment,and people Improved flow of information, materials, or people Improved employee morale and safer working conditions Improved customer/client interaction Flexibility May be useful here to present a brief discussion of each benefit.

Requirements of a Good Layout An understanding of capacity and space requirements Selection of appropriate material handling equipment Decisions regarding environment and aesthetics Identification and understanding of the requirements for information flow Identification of the cost of moving between the various work areas Students should be asked if they perceive the relative importance of these requirements to be changing with the increased use of automated information technology.

Constraints on Layout Objectives Product design & volume Process equipment & capacity Quality of work life Building and site Having discussed each of these constraints in turn, you might ask students what other constraints they might expect to find in a practical situation.

Six Layout Strategies Fixed-position layout Process-oriented layout large bulky projects such as ships and buildings Process-oriented layout deals with low-volume, high-variety production (“job shop”, intermittent production) Office layout positions workers, their equipment, and spaces/offices to provide for movement of information

Six Layout Strategies - continued Retail/service layout allocates shelf space and responds to customer behavior Warehouse layout addresses trade-offs between space and material handling Product-oriented layout seeks the best personnel and machine use in repetitive or continuous production

Fixed-Position Layout Design is for stationary project Workers and equipment come to site Complicating factors Limited space at site Changing material needs Students should be able to supply examples of the use of this layout strategy.

Factors Complicating a Fixed Position Layout There is limited space at virtually all sites At different stages in the construction process, different materials are needed – therefore, different items become critical as the project develops The volume of materials needed is dynamic Students should be asked to suggest additional limitations or complications related to the fixed-positions layout

Process-Oriented Layout Design places departments with large flows of material or people together Department areas having similar processes located in close proximity e.g., All x-ray machines in same area Used with process-focused processes Students should be asked to suggest why this is not our “standard” layout - at least where the product is movable or transportable.

Emergency Room Layout Surgery Radiology E.R. beds Pharmacy Billing/exit E.R.Triage room E.R. Admissions Patient B - erratic pacemaker Patient A - broken leg Hallway Students may be asked to evaluate alternative layouts for an emergency room. Perhaps a visit to view a local emergency room might be helpful.

Steps in Developing a Process-Oriented Layout Construct a “from-to matrix” Determine space requirements for each department Develop an initial schematic diagram Determine the cost of this layout By trial-and-error (or more sophisticated means), try to improve the initial layout Prepare a detailed plan that evaluates factors in addition to transportation cost The criterion for this methodology is basically a number-of-parts (or people)-times-distance measure. Is this always useful or appropriate?

Cost of Process-Oriented Layout Now that cost can be determined, ask students (1) whether this is an appropriate criteria, and (2) how they would go about minimizing cost.

Interdepartmental Flow of Parts 1 2 3 4 5 6 50 100 20 30 10 Note that the matrix above basically measures the flow between sites, direction is immaterial. We can also develop entries for the remainder of the matrix if a different cost or route applies depending upon whether one is coming or going.

Number of Weekly Loads 100 1 2 3 50 30 20 100 50 20 10 4 5 6 50

Possible Layout 1 Assembly Department (1) Painting (2) Machine Shop (3) Receiving (4) Shipping (5) Testing (6) Room 1 Room 2 Room 3 Room 4 Room 5 Room 6 60’ 40’

Number of Weekly Loads 30 1 2 3 50 100 100 20 50 20 10 4 5 6 50

Possible Layout 2 Painting Department (2) Assembly (1) Machine Shop (3) Receiving (4) Shipping (5) Testing (6) Room 1 Room 2 Room 3 Room 4 Room 5 Room 6 60’ 40’

Computer Programs for Layout CRAFT SPACECRAFT CRAFT 3-D MULTIPLE CORELAP ALDEP COFAD FADES - expert system It is probably useful to note that these programs operate on the basis of heuristics - and do not necessarily produce the optimal answer.

Out-Patient Hospital Example CRAFT 1 2 3 4 5 6 1 2 3 4 5 6 Legend: A = xray/MRI rooms B = laboratories C = admissions D = exam rooms E = operating rooms F = recovery rooms 1 2 3 4 5 6 A B D C F E D B E C F A 1 2 3 4 5 6 Total cost: 20,100 Est. Cost Reduction .00 Iteration 0 Total cost: 14,390 Est. Cost Reduction 70. Iteration 3

Cellular Layout - Work Cells Special case of product-oriented layout - in what is ordinarily a process-oriented facility Consists of different machines brought together to make a product Temporary arrangement only Example: Assembly line set up to produce 3000 identical parts in a job shop Students should be asked to comment upon the technology required to implement the concept of work cells. Under what conditions is such a cellular arrangement possible?

Improving Layouts by Moving to the Work Cell Concept

Work Cells - Some Advantages Reduced work-in-process inventory Less floor space required Reduced raw material and finished goods inventories required Reduced direct labor costs Heightened sense of employee participation Increased utilization of equipment machinery Reduced investment in machinery and equipment Students should be reminded here to consider both the advantages and the disadvantages. They might also be asked to consider why this approach might require a larger capital investment and result in a lower machine utilization than other approaches (Green and Sadowski).

Work Cell Advantages Inventory Equipment utilization Floor space Direct labor costs Equipment utilization Employee participation Quality

Work Cell Floor Plan Office Tool Room Work Cell Saws Drills

Requirements for Cellular Production Identification of families of products - group technology codes High level of training and flexibility on the part of the employees Either staff support or flexible, imaginative employees to establish the work cells initially Test (poka-yoke) at each station in the cell Students should be asked to consider if worker union activities have an impact on the organization’s ability to use cellular production.

Work Cells, etc. Work Cell Focused Work Center Focused Factory A temporary assembly-line-oriented arrangement of machines and personnel in what is ordinarily a process-oriented facility Example: job shop with rearranged machinery and personnel to produce 30 unique control panels Focused Work A permanent assembly-line-oriented arrangement of machines and personnel in what is ordinarily a process-oriented facility Center Example: manufacturing of pipe brackets at a shipyard Focused Factory A permanent facility to produce a product or component in a product-oriented facility Example: a plant to produce window mechanisms for automobiles

Number of Product Lines and Operating Performance J(1) I(2) G(1) H(2) K(2) More focused plants E(4) A(6) F(6) C(5) B(5) Less focused 15 10 5 The more focused the plant, the larger the number of product lines for equivalent sales performance. -5 100 Sales ($M)

Office Layout Design positions people, equipment, & offices for maximum information flow Arranged by process or product Example: Payroll dept. is by process Relationship chart used Examples Insurance company Software company

Office Layout Floor Plan Accounting Manager Brand X Finance Fin. Acct. This slide could be used to initiate a discussion of layout designed around product flow as opposed to layout designed around information flow.

Retail/Service Layout Design maximizes product exposure to customers Decision variables Store flow pattern Allocation of (shelf) space to products Types Grid design Free-flow design Students should be asked for examples of features they find common to the design of retail layouts with which they are familiar.

Retail Layouts - Rules of Thumb Locate high-draw items around the periphery of the store Use prominent locations such as the first or last aisle for high-impulse and high margin items Remove crossover aisles that allow customers the opportunity to move between aisles Distribute what are known in the trade as “power items” (items that may dominate a shopping trip) to both sides of an aisle, and disperse them to increase the viewing of other items Use end aisle locations because they have a very high exposure rate Students can be asked to provide examples of instances in which these rules were implemented.

Retail/Service Layout – Grid Design Office Carts Check- out Grocery Store Meat Bread Milk Produce Frozen Foods

Retail/Service Layout - Free-Flow Design Feature Display Table Trans. Counter Apparel Store

Retail Store Shelf Space Planogram Computerized tool for shelf-space management Generated from store’s scanner data on sales Often supplied by manufacturer Example: P&G 2 ft. 5 facings VO-5 SUAVE PERT

A Good Service Layout (Servicescape) Considers Ambient conditions - background characteristics such as lighting, sound, smell, and temperature. Spatial layout and functionality - which involve customer circulation path planning Signs, Symbols, and Artifacts - characteristics of building design that carry social significance

Warehouse Layout Variety of items stored Number of items picked Design balances space (cube) utilization & handling cost Similar to process layout Items moved between dock & various storage areas Optimum layout depends on Variety of items stored Number of items picked

Warehouse Layout Floor Plan Zones Conveyor Truck Order Picker

Cross Docking Transferring goods Avoids placing goods into storage from incoming trucks at receiving docks to outgoing trucks at shipping docks Avoids placing goods into storage Requires suppliers provide effective addressing (bar codes) and packaging that provides for rapid transhipment In-coming Outgoing © 1984-1994 T/Maker Co. © 1995 Corel Corp.

Random Stocking Systems Often: Maintain a list of “open” locations Maintain accurate records of existing inventory and its locations Sequence items on orders to minimize travel time required to pick orders Combine orders to reduce picking time Assign certain items or classes of items, such as high usage items, to particular warehouse areas so that distance traveled is minimized Some of the options to be considered when developing a random stocking system

Product-Oriented Layout Facility organized around product Design minimizes line imbalance Delay between work stations Types: Fabrication line; assembly line Students should be asked to suggest the conditions under which a product-oriented layout is most appropriate.

Product-Oriented Requirements Standardized product High production volume Stable production quantities Uniform quality of raw materials & components Some answers to the previous question.

Product-Oriented Layout - Assumptions Volume is adequate for high equipment utilization Product demand is stable enough to justify high investment in specialized equipment Product is standardized or approaching a phase of its life cycle that justifies investment in specialized equipment Supplies of raw materials and components are adequate and of uniform quality to ensure they will work with specialized equipment Having discussed the individual assumptions, one should then turn to the question of what is “adequate,” or “enough,” i.e., how does one go about making these decisions.

Product-Oriented Layout Types Fabrication Line Assembly Line Builds components Uses series of machines Repetitive process Machine paced Balanced by physical redesign Assembles fabricated parts Uses workstations Repetitive process Paced by tasks Balanced by moving tasks

Product Layout Advantages Lower variable cost per unit Lower material handling costs Lower work-in-process inventories Easier training & supervision Rapid throughput

Product Layout Disadvantages Higher capital investment Special equipment Any work stoppage stops whole process Lack of flexibility Volume Product

An Assembly Line Layout

Assembly Line Types

Repetitive Layout 1 3 2 4 5 Work Office Belt Conveyor Work Station Note: 5 tasks or operations; 3 work stations Station

Assembly Line Balancing Analysis of production lines Nearly equally divides work between workstations while meeting required output Objectives Maximize efficiency Minimize number of work stations

Assembly Line Balancing The General Procedure Determine cycle time by taking the demand (or production rate) per day and dividing it into the productive time available per day Calculate the theoretical minimum number of work stations by dividing total task time by cycle time Perform the line balance and assign specific assembly tasks to each work station Students should be aware that it is best to run balanced assembly lines - if they are not, then the need for balancing should be covered before discussing the process.

Assembly Line Balancing Steps 1. Determine tasks (operations) 2. Determine sequence 3. Draw precedence diagram 4. Estimate task times 5. Calculate cycle time 6. Calculate number of work stations 7. Assign tasks 8. Calculate efficiency Students should be walked through an example in class. One of the most useful examples is typically the student registration system. Students are familiar with it, they are able to estimate task time, and they are certainly impacted by the overall process,

Assembly Line Balancing Jargon Task – an element of work on the product line Workstation – a physical location where a particular set of tasks is performed Product Line – much like a moving conveyor that passes a series of workstations in a uniform time interval: Cycle Time – the time between successive units coming off the end of the line

Assembly Line Balancing Equations Cycle time = Production time available Demand per day Minimum number of work stations  Task times Cycle time Efficiency = = * (Cycle time) (Actual number of work stations)

Heuristics for Assigning Tasks in Assembly Line Balancing Longest task time - choose task with longest operation time Most following tasks - choose task with largest number of following tasks Ranked positional weight - choose task where the sum of the times for each following task is longest Shortest task time - choose task with shortest operation time Least number of following tasks - choose task with fewest subsequent tasks

Line Balancing Example #1 Task Predecessor Seconds A - 60 B 80 C 30 D 40 E B, D F 50 G 100 H D, G 70 I E, H

Line Balancing Example #1 (cont.) Assuming: Demand of 160 units per day Operating time of 8 hours per day Compute (using longest task time): Cycle time Theoretical minimum number of workstations Assignment of tasks to workstations Efficiency of the line

Line Balancing Example #2 Task Predecessor Seconds A - 60 B 80 C 30 D 40 E B, D F 50 G 100 H D, G 70 I E, H

Line Balancing Example #2 (cont.) Assuming: Demand is unknown Operating time of 8 hours per day Compute (using most following tasks): Cycle time Theoretical minimum number of workstations Assignment of tasks to workstations Efficiency of the line