Layout Strategy

Introduction What – Layout Decisions Where – For efficiency or customer appeal Why – Improve Profitability

What is Layout? Placement of machines Offices Service centers Efficient flow of materials, people, information

Layout Achieves Higher utilization of space, equipment, people Improved flow of information, materials, people Improved morale and safe working conditions Improved customer / client interaction Flexibility

Good Layout Requires Material handling equipment Capacity and space requirements Environment and aesthetics Flows of Information Cost of moving between work areas

Fixed Position Layout Project remains in one place Workers and equipment come to the work area Limited space At different stages, different materials needed Volume of materials needed is dynamic

New Innovations Move some construction off-site Modular construction – ie shipbuilding Group technology – group components

Process-Oriented Layout Low volume High variety Similar machines grouped together Product moves from one department to another Advantage: flexibility Disadvantage: set-up and movement

Material Handling Costs Arrange departments to minimize material handling

Work cells Temporary Product-oriented arrangement Reduced work-in-process inventory Less floor space Reduced raw material and finished goods inventory Reduced labour More employee participation Increased use of equipment Reduced investment in machinery

Work cells require Identified families of products Highly trained and flexible employees Support to get up and running

Focused Work Centre Product oriented arrangement

Office Layout Moving information instead of materials Work cell concept still valid Technology allows increasing layout flexibility Virtual companies – hoteling

Retail Layout Profitability related to customer exposure to products High-draw items around periphery Prominent locations for high-impulse and high-margin Disperse “power items” around store End-aisle locations have high exposure Convey mission by position lead-off department

Warehouse and Storage Layout Find optimum cost between material handling and storage space Variety of items stored and number of items picked per order Shipping and receiving areas

Cross-Docking Avoid placing in storage Ship what is received Reduce distribution costs Speed restocking Requires tight scheduling Requires accurate product information

Random Stocking Locate stock wherever there is space

Customizing Warehouse adds value to product by customizing it for customer Modification Repair Labeling Packaging

Repetitive Product-Oriented Layout High volume Low variety Expensive! Volume adequate for high equipment utilization Product demand stable Product standardized Adequate supplies of raw materials

Product Layouts Fabrication line Assembly line Time spent at each stage in the line must be balanced

Advantages Low variable cost per unit Low material handling cost Reduced work-in-process inventory Easier training and supervision Rapid throughput

Disadvantages High investment – requires high volume Work stoppage stops entire operation Low flexibility

Assembly-Line Balancing Cycle time = Production time available per day / units per day Minimum Workstations = Sum of task times / Cycle time Efficiency = Sum of task times / (actual workstations x assigned cycle time)