Introduction to Facility Planning

Competitive Global Marketplace Today’s world is much more competitive than the world in which our parents and grandparents worked. “Open-market” countries depend heavily upon imported manufactured goods. Through early 1960’s 1960’s - Present

Competitive Global Marketplace Example LP Gas Hose - Canada Regulator - Italy Brass Fittings - USA All components assembled in USA . . . Then shipped to China for assembly into gas grills which are then shipped back to the USA for retail sale!

Market Driven Competitiveness Survival of the fittest! Every morning in Africa, a gazelle wakes up. It knows it must run faster than the fastest lion or it will be killed. Every morning a lion wakes up. It knows it must outrun the slowest gazelle or it will starve to death. It doesn’t matter whether you are a lion or a gazelle—when the sun comes up, you had better be running.

Competitive Business Challenges What makes some companies’ products seem to have a cost advantage over others? Better manufacturing processes Desire to continuously improve Streamlined plant layout

Cycle Time “One of the most noteworthy accomplishments in keeping the price of Ford products low is the gradual shortening of the production cycle. The longer an article is in the process of manufacture and the more it is moved about, the greater is its ultimate cost.” Henry Ford, 1926

Cycle Time One factor contributing to this lengthy production cycle is the facility layout. Manufacturing facilities design and material handling affect the productivity and profitability of a company more than almost any other corporate decision.

Brief History of Plant Layout Companies of the past utilized a draftsperson to complete the plant layout. The general belief was that there was a void of expertise in facility layout design. Problems could be overcome with an extra forklift or conveyor length.

Plant Layout Ship QC Raw Stock Rec QC Screw Machine Shear Stamp Lathe Drill Assembly Brake Mill Weld Grind Finish Parts Stock

Impact of Poor Plant Layout High material handling costs Cycle and lead time delays High WIP inventories Lower quality Product damage Safety and morale problems Poor equipment utilization Congested aisles Wasted floor space

How Can We Improve? Lean Manufacturing and Cellular Flow Before: 6 Assemblers Batch Assembly C/T 4.5 days

How Can We Improve? Lean Manufacturing and Cellular Flow After: 6 Assemblers Flow / Pull C/T 53 minutes

Facility Improvement Pitfalls Poorly planned layout Lack of employee involvement Lack of management commitment Budgetary constraints leading to a “piecemeal” approach Focus on the almighty ROI versus the future of the business Short term management focus

Facilities Planning Definition Analysis Concept Design Implementation  For producing of products and services

Manufacturing Savings Where can we save costs in manufacturing? Reduce or Eliminate- Work-in-process inventories (WIP) Non-value added activities Material handling costs Processing time Product defects

Manufacturing Savings The largest components of factory labor and the cost of materials purchased and used in a factory are: Internal transportation costs Material handling costs Storage costs This includes both our manufacturing plants and those of our suppliers!

Facilities Layout Goals Goals should include: Minimize unit cost. Minimize project cost. Optimize quality. Promote the effective use of (a) people, (b) space, (c) equipment, and (d) energy. Provide for (a) employee convenience, (b) employee safety, and (c) employee comfort. Control project cost. Achieve the production start date. Build flexibility into the plan. Reduce or eliminate excessive inventory. Achieve miscellaneous goals.

Five Types of Facility Design Projects New Facility – fewer restrictions and constraints on the layout since it is new New Product – integration of a new product into the existing process and layout Design Changes – incorporate the impact of design changes into the manufacturing process Cost Reduction – redesign the existing layout to facilitate cost reduction programs and ideas Retrofit – similar to a new facility layout except with the constraints present

Continuous Improvement Doctrine (CID) The continuous improvement doctrine (CID) mandates that a company will commit to continuous, ongoing improvement plans for production processes, materials handling, and plant layout. They further recognize that these items are essential to achieve competitive advantage. The CID plan will be developed and maintained on an ongoing basis. #1