Chapter 10 and 11 Facilities

Objectives of Facility Layout Minimize material handling costs Utilize space efficiently Utilize labor efficiently Eliminate bottlenecks Facilitate communication and interaction between workers, between workers and their supervisors, or between workers and customers Reduce manufacturing cycle time or customer service time

Objectives of Facility Layout Eliminate waste or redundant movement Facilitate the entry, exit, and placement of material, products, or people Incorporate safety and security measures Promote product and service quality Encourage proper maintenance activities Provide a visual control of operations or activities Provide flexibility to adapt to changing conditions Increase capacity

Basic Types of Layouts Process Layout Product Layout Machines grouped by process they perform Product Layout Linear arrangement of workstations to produce a specific product Fixed Position Layout Used in projects where the product cannot be moved

Manufacturing Process Layout D G A Receiving and Shipping Assembly Painting Department Lathe Department Milling Department Drilling Department Grinding P

Manufacturing Process Layout D G A Receiving and Shipping Assembly Painting Department Lathe Department Milling Department Drilling Department Grinding P

Manufacturing Process Layout D G A Receiving and Shipping Assembly Painting Department Lathe Department Milling Department Drilling Department Grinding P

A Product Layout In Out

Comparison Of Product And Process Layouts PRODUCT LAYOUT PROCESS LAYOUT 1. Description Sequential arrangement Functional grouping of machines of machines 2. Type of Process Continuous, mass Intermittent, job shop production, mainly batch production, assembly mainly fabrication 3. Product Standardized Varied, made to stock made to order 4. Demand Stable Fluctuating 5. Volume High Low 6. Equipment Special purpose General purpose 7. Workers Limited skills Varied skills

Comparison Of Product And Process Layouts PRODUCT LAYOUT PROCESS LAYOUT 8. Inventory Low in-process, High in-process, high finished goods low finished goods 9. Storage space Small Large 10. Material Fixed path Variable path handling (conveyor) (forklift) 11. Aisles Narrow Wide 12. Scheduling Part of balancing Dynamic 13. Layout decision Line balancing Machine location 14. Goal Equalize work at Minimize material each station handling cost 15. Advantage Efficiency Flexibility

Fixed-Position Layouts Typical of projects Equipment, workers, materials, other resources brought to the site Highly skilled labor Often low fixed Typically high variable costs

Designing Process Layouts Minimize material handling costs Block Diagramming Minimize nonadjacent loads Use when quantitative data is available Relationship Diagramming Based on location preference between areas Use when quantitative data is not available

Block Diagramming Create load summary chart Calculate composite (two way) movements Develop trial layouts minimizing number of nonadjacent loads

Block Diagrams 3 2 5 1 4 (a) Initial block diagram

Block Diagrams 1 2 3 4 5 (a) Initial block diagram (b) Final block diagram

Relationship Diagramming (Murther’s Grid) Used when quantitative data is not available Muther’s grid displays preferences Denote location preferences with weighted lines

Relationship Diagramming Example Production Offices Stockroom Shipping and receiving Locker room Toolroom

Relationship Diagramming Example A Absolutely necessary E Especially important I Important O Okay U Unimportant X Undesirable A O U E X I Production Offices Stockroom Shipping and receiving Locker room Toolroom

Relationship Diagramming Example A Absolutely necessary E Especially important I Important O Okay U Unimportant X Undesirable A O U E X I Production Offices Stockroom Shipping and receiving Locker room Toolroom

Relationship Diagramming Example 1 Absolutely necessary 2 Especially important 3 Important 4 Okay 5 Unimportant 6 Undesirable 1 4 5 2 6 3 Production Offices Stockroom Shipping and receiving Locker room Toolroom

Relationship Diagramming Example 1 Absolutely necessary 2 Especially important 3 Important 4 Okay 5 Unimportant 6 Undesirable 1 4 5 2 6 3 Production Offices Stockroom Shipping and receiving Locker room Toolroom

Service Layouts Usually process layouts due to customers needs Minimize flow of customers or paperwork Retailing tries to maximize customer exposure to products Computer programs consider shelf space, demand, profitability Layouts must be aesthetically pleasing

Designing Product Layouts Product layouts or assembly lines Develop precedence diagram of tasks Jobs divided into work elements Assign work elements to workstations Try to balance the amount work of each workstation

Line Balancing Precedence diagram Cycle time Network showing order of tasks and restrictions on their performance Cycle time Maximum time product spends at any one workstation

Hybrid Layouts Cellular layouts Flexible manufacturing systems Group machines into machining cells Flexible manufacturing systems Automated machining & material handling systems Mixed-model assembly lines Produce variety of models on one line

Cellular Layouts Identify families of parts with similar flow paths Group machines into cells based on part families Arrange cells so material movement is minimized Locate large shared machines at point of use

Advantages Of Cellular Layouts Reduced material handling and transit time Reduced setup time Reduced work-in-process inventory Better use of human resources Easier to control - visibility Easier to automate

Disadvantages Of Cellular Layouts Inadequate part families Poorly balanced cells Expanded training and scheduling of workers Increased capital investment

Direction of part movement within cell Manufacturing Cell In Out Worker 1 Worker 2 Worker 3 Direction of part movement within cell S L HM VM G Final inspection Finished part Key: S = Saw L = Lathe HM = Horizontal milling machine VM = Vertical milling machine G = Grinder Paths of three workers moving within cell Material movement

Flexible Manufacturing Systems Automated machining operations Automated material handling Automated tool changers Computer controlled system Designed around size of parts processed & average processing time for parts Can process wide variety of items quickly

Mixed Model Assembly Lines Produce multiple models in any order on one assembly line Harley, Opel Issues in mixed model lines Line balancing U-shaped line Flexible workforce Model sequencing

Facility Location Models

Types Of Facilities Heavy manufacturing Light industry Auto plants, steel mills, chemical plants Light industry Small components mfg, assembly Warehouse & distribution centers Retail & service

Factors in Heavy Manufacturing Location Construction costs Land costs Raw material and finished goods shipment modes Proximity to raw materials Utilities Labor availability

Factors in Light Industry Location Construction costs Land costs Easily accessible geographic region Education & training capabilities

Factors in Warehouse Location Transportation costs Proximity to markets (Customers)

Transportation and distribution industry--based on business and employment base providing transportation, distribution, warehousing and related services. Work force--geared to existing and available logistics-related workers in the area. Road infrastructure--measures factors like available lane miles per capita, interstate highway access, miles of paved roads etc. Road density, congestion and safety--ranks the city on traffic volumes and delays as well as accident statistics and other factors affecting the smooth flow of traffic. Road condition--draws on state performance and includes condition of highways and bridges among other measures. Interstate highway--includes access to interstate highways, spending on highway construction and maintenance. Taxes and fees--provides a measure of logistics-related costs, including highway and fuel taxes and related business activity taxes. Railroad--offers a state-based rank of access to Class 1 and other rail services and miles of track. Waterborne commerce--includes ocean port capacity as well as inland waterways. Air cargo--ranks the city on its access to cargo services, including wide-body passenger service by combination carriers, international and expedited services. Source: Logistics Today, “The Logistics Quotient: Midwest

Source: Logistics Today, “The Logistics Quotient: Midwest

Layout Considerations Cross docking dock doors - how many picking techniques bulk storage safety/backup stocks product flow conveyors? Vehicle flow

Warehouse Size Considerations Customer service level layout # of products (Stock Keeping Units - SKUs) customer base size of products racks/shelving demand variability MHE requirements/aisle size regulations - CAL OSHA - earthquake; safety; fire

Factors in Retail Location Proximity to customers Ease of customer entry and exit Location is everything

Global Location Factors Government stability Government regulations Political and economic systems Economic stability and growth Exchange rates Culture Climate Export import regulations, duties and tariffs Raw material availability Number and proximity of suppliers Transportation and distribution system Labor cost and education Available technology Commercial travel Technical expertise Cross-border trade regulations Group trade agreements

Regional Location Factors Labor (availability, education, cost and unions) Proximity of customers Number of customers Construction/leasing costs Land costs Modes and quality of transportation Transportation costs Incentive packages Governmental regulations Environmental regulations Raw material availability Commercial travel Climate Infrastructure Quality of life

Regional Location Factors Community government Local business regulations Government services Business climate Community services Taxes Availability of sites Financial Services Community inducements Proximity of suppliers Education system

Site Location Factors Customer base Construction/ leasing cost Land cost Site size Transportation Utilities Zoning restrictions Traffic Safety/security Competition Area business climate Income level

Location Incentives Tax credits Wal-Mart in Wyandotte Relaxed government regulation Job training Infrastructure improvement Money

Center-of-Gravity Technique Locate facility at center of geographic area Based on weight and distance traveled Establish grid-map of area Identify coordinates and weights shipped for each location

Project Management and Operations Chapter 17 Project Management and Operations

Project Management First Essay on Project Management: 1697 – “An Essay Upon Projects” 1959 HBR Article – “The Project Manager Air Force Manual 1964

Project Management Project management is the discipline of organizing and managing resources in such a way that these resources deliver all the work required to complete a project within defined scope, quality, time and cost constraints. A project is a temporary and one-time endeavor undertaken to create a unique product or service, that brings about beneficial change or added value. This property of being a temporary and a one-time undertaking contrasts with processes, or operations, which are permanent or semi-permanent ongoing functional work to create the same product or service over and over again. (wikipedia)

Project Management In today’s global marketplace, complexity and speed are certainties. In such an environment, a good axiom for project management is, Do It, Do It Right, Do It Right Now. Creating clear direction, efficiency, timely response, and quality outcomes requires project managers who are agile -- adept at change. The associated disciplinary areas are clearly spelled out in the following PMI definition. “Project management is the application of knowledge, skills, tools, and techniques to a broad range of activities in order to meet the requirements of a particular project. Project management is comprised of five Project Management Process Groups – Initiating Processes, Planning Processes, Executing Processes, Monitoring and Controlling Processes, and Closing Processes. Source: Project Management Institute - http://www.pmi.org/info/PP_AboutProfessionOverview.asp?nav=0501

Program Management Program management is the process of managing multiple ongoing inter-dependent projects. An example would be that of designing, manufacturing and providing support infrastructure for an automobile manufacturer. This requires hundreds, or even thousands, of separate projects. (wikipedia)

Elements of Project Management Project team Individuals from different departments within company Matrix organization Team structure with members from different functional areas depending on skills needed Project manager - Leader of project team Project Charter – high level description of what is to be accomplished in a project and delegates authority to project manager to implement actions to complete project

Project Planning Statement of work Written description of goals, work & time frame of project Activities require labor, resources & time Precedence relationship shows sequential relationship of project activities

Elements of Project Planning Define project objective(s) Identify activities Establish precedence relationships Make time estimates Determine project completion time Compare project schedule objectives Determine resource requirements to meet objective

Work Breakdown Structure Hierarchical organization of work to be done on a project Project broken down into modules Modules subdivided into subcomponents, activities, and tasks Identifies individual tasks, workloads, and resource requirements

Project Control All activities identified and included Completed in proper sequence Resource needs identified Schedule adjusted Maintain schedule and budget Complete on time

A Gantt Chart Around since 1914 Popular tool for project scheduling Graph with bar for representing the time for each task Provides visual display of project schedule Also shows slack for activities Amount of time activity can be delayed without delaying project

Gantt Charts Gantt described two principles for his charts: measure activities by the amount of time needed to complete them the space on the chart can be used the represent the amount of the activity that should have been done in that time. Gantt charts were employed on major infrastructure projects including the Hoover Dam and Interstate highway system and still are an important tool in project management.

A Gantt Chart Month 0 2 4 6 8 10 | | | | | 1 3 5 7 9 Activity | | | | | Activity Design house and obtain financing Lay foundation Order and receive materials Build house Select paint Select carpet Finish work 0 2 4 6 8 10 Month 1 3 5 7 9

Example of Gantt Chart Problem

CPM/PERT Critical Path Method (CPM) DuPont & Remington-Rand (1956) Deterministic task times Project Eval. & Review Technique (PERT) US Navy, Lockheed Multiple task time estimates

PERT/CPM Program Evaluation and Review Technique (PERT): developed in conjunction with the development of the Polaris missile program for submarines – developed by the US Navy with Lockheed as the lead contractor Critical Path Method (CPM): developed through a joint venture between the DuPont Corporation and the Remington Rand Corporation – the original purpose was to monitor and evaluate plant maintenance management projects.

Project Network for a House 3 2 1 4 6 7 5 Lay foundation Design house and obtain financing Order and receive materials Dummy Finish work Select carpet Select paint Build house

Critical Path A path is a sequence of connected activities running from start to end node in network The critical path is the path with the longest duration in the network Project cannot be completed in less than the time of the critical path

The Critical Path A: 1-2-3-4-6-7 3 + 2 + 0 + 3 + 1 = 9 months 1 4 6 7 5 Lay foundation Design house and obtain financing Order and receive materials Dummy Finish work Select carpet Select paint Build house A: 1-2-3-4-6-7 3 + 2 + 0 + 3 + 1 = 9 months B: 1-2-3-4-5-6-7 3 + 2 + 0 + 1 + 1 + 1 = 8 months C: 1-2-4-6-7 3 + 1 + 3 + 1 = 8 months D: 1-2-4-5-6-7 3 + 1 + 1 + 1 + 1 = 7 months

The Critical Path 1 2 4 6 7 3 5 Activity Start Times 1 4 6 7 5 Lay foundation Design house and obtain financing Order and receive materials Dummy Finish work Select carpet Select paint Build house 1 2 4 6 7 3 5 Start at 3 months Start at 5 months Finish at 9 months Start at 8 months Activity Start Times

Early Times Why is this important? 3 2 1 4 6 7 5 Lay foundation Design house and obtain financing Order and receive materials Dummy Finish work Select carpet Select paint Build house ES - earliest time activity can start Forward pass starts at beginning of CPM/PERT network to determine ES times EF = ES + activity time ESij = maximum (EFi) EFij = ESij - tij ES12 = 0 EF12 = ES12 - t12 = 0 + 3 = 3 months Why is this important?

Late Times Who Cares? Why is this Important? LS - latest time activity can start & not delay project Backward pass starts at end of CPM/PERT network to determine LS times LF = LS + activity time LSij = LFij - tij LFij = minimum (LSj)

Activity Slack Data Activity LS ES LF EF Slacks *1-2 0 0 3 3 0 1 4 6 7 5 Lay foundation Design house and obtain financing Order and receive materials Dummy Finish work Select carpet Select paint Build house Activity LS ES LF EF Slacks *1-2 0 0 3 3 0 *2-3 3 3 5 5 0 2-4 4 3 5 4 1 *3-4 5 5 5 5 0 4-5 6 5 7 6 1 *4-6 5 5 8 8 0 5-6 7 6 8 7 1 *6-7 8 8 9 9 0 * Critical path

Activity Slack Data Activity LS ES LF EF Slacks *1-2 0 0 3 3 0 1 4 6 7 5 Lay foundation Design house and obtain financing Order and receive materials Dummy Finish work Select carpet Select paint Build house Activity LS ES LF EF Slacks *1-2 0 0 3 3 0 *2-3 3 3 5 5 0 2-4 4 3 5 4 1 *3-4 5 5 5 5 0 4-5 6 5 7 6 1 *4-6 5 5 8 8 0 5-6 7 6 8 7 1 *6-7 8 8 9 9 0 * Critical path 1 2 4 6 7 3 5 Activity Slack S = 0 S = 1

Project Crashing Crashing is reducing project time by expending additional resources Crash time is an amount of time an activity is reduced Crash cost is the cost of reducing the activity time Goal is to reduce project duration at minimum cost

Time-Cost Relationship Crashing costs increase as project duration decreases Indirect costs increase as project duration increases Reduce project length as long as crashing costs are less than indirect costs

Life Cycle Management Long term view of projects to guide decision making – solutions that provide life time success vice short term Acquisition; development; production; introduction; sustainment; disposal Links system costs to big picture; better use of resources; minimize total cost of ownership

What’s Next Chapters 5 and 7 Mid term handed out