© Wiley Chapter 10 – Facility Layout Operations Management by R. Dan Reid & Nada R. Sanders 4th Edition © Wiley 2010

© Wiley Learning Objectives Define layout planning and explain its importance Identify and describe different types of layouts Compare process layouts & product layouts Describe the steps involved in designing a process layout

© Wiley Learning Objectives – con’t Describe the steps involved in designing a product layout Explain the advantages of hybrid layouts Define the meaning of group technology (cell) layouts

© Wiley What Is Layout Planning? Layout planning is deciding the best physical arrangement of all resources within a facility Facility resource arrangement can significantly affect productivity Two broad categories of operations: Intermittent processing systems – low volume of many different products Continuous processing systems – high volume of a few standardized products

© Wiley Types of Layouts Four basic layout types consisting of: Process layouts - Group similar resources together Product layouts - Designed to produce a specific product efficiently Hybrid layouts - Combine aspects of both process and product layouts Fixed-Position layouts - Product is two large to move; e.g. a building

© Wiley Process Layouts Process layout unique characteristics include: Resources used are general purpose Facilities are less capital intensive Facilities are more labor intensive Resources have greater flexibility Processing rates are slower Material handling costs are higher

© Wiley Process Layouts – con’t  Scheduling resources & work flow is more complex  Space requirements are higher

© Wiley Product Layouts Product layout unique characteristics are: Resources are specialized Facilities are capital intensive Processing rates are faster Material handling costs are lower Space requirements for inventory storage are lower Flexibility is low relative to the market

© Wiley Process vs. Product Layouts Here are the characteristic differences between a process and product layout.

© Wiley Hybrid Layouts Combine elements of both product & process layouts Maintain some of the efficiencies of product layouts Maintain some of the flexibility of process layouts Examples: Group technology & manufacturing cells Grocery stores

© Wiley Fixed-Position Layout Used when product is large Product is difficult or impossible to move, i.e. very large or fixed All resources must be brought to the site Scheduling of crews and resources is a challenge

© Wiley Designing Process Layouts Step 1: Gather information: Space needed, space available, identify closeness measures Step 2: Develop alternative block plans: Using trial-and-error or decision support tools Step 3: Develop a detailed layout: Consider exact sizes/shapes of departments and work centers including aisles and stairways Tools like drawings, 3-D models, and CAD software are available to facilitate this process

© Wiley Special Cases of Process Layouts A number of unique process layouts require special attention. We will look at two of these: Warehouse layouts Office Layouts

© Wiley Warehouse Layouts Warehouse Layout Considerations: Primary decision is where to locate each department relative to the dock Departments can be organized to minimize “ld” totals Departments of unequal size require modification of the typical ld calculations to include a calculation of the “ratio of trips to area needed” The usage of “Crossdocking” modifies the traditional warehouse layouts; more docks, less storage space, and less order picking

© Wiley Office Layouts Office Layout Considerations: Almost half of US workforce works in an office environment Human interaction and communication are the primary factors in designing office layouts Layouts need to account for physical environment and psychological needs of the organization One key layout trade-off is between proximity and privacy Open concept offices promote understanding & trust Flexible layouts incorporating “office landscaping” help to solve the privacy issue in open office environments

© Wiley Designing Product Layouts Designing product layouts requires consideration of: Sequence of tasks to be performed by each workstation Logical order Speed considerations – line balancing

© Wiley Designing Product Layouts – con’t Step 1: Identify tasks & immediate predecessors Step 2: Determine output rate Step 3: Determine cycle time Step 4: Compute the Theoretical Minimum number of Stations Step 5: Assign tasks to workstations (balance the line) Step 6: Compute efficiency, idle time & balance delay

© Wiley Step 1: Identify Tasks & Immediate Predecessors

© Wiley Layout Calculations Step 2: Determine output rate Vicki needs to produce 60 pizzas per hour Step 3: Determine cycle time The amount of time each workstation is allowed to complete its tasks Limited by the bottleneck task (the longest task in a process):

© Wiley Layout Calculations con’t Step 4 : Compute the theoretical minimum number of stations TM = number of stations needed to achieve 100% efficiency (every second is used) Always round up (no partial workstations) Serves as a lower bound for our analysis

© Wiley Layout Calculations con’t Step 5 : Assign tasks to workstations Start at the first station & choose the longest eligible task following precedence relationships Continue adding the longest eligible task that fits without going over the desired cycle time When no additional tasks can be added within the desired cycle time, begin assigning tasks to the next workstation until finished

© Wiley Last Layout Calculation Step 6 : Compute efficiency and balance delay Efficiency (%) is the ratio of total productive time divided by total time Balance delay (%) is the amount by which the line falls short of 100%

© Wiley Other Product Layout Considerations Shape of the line (S, U, O, L): Share resources, enhance communication & visibility, impact location of loading & unloading Paced versus Un-paced lines Paced lines use an automatically enforced cycle time Number of Product Models produced Single Mixed-model lines

© Wiley Group Technology (CELL) Layouts One of the most popular hybrid layouts uses Group Technology (GT) and a cellular layout GT has the advantage of bringing the efficiencies of a product layout to a process layout environment

© Wiley Process Flows before the Use of GT Cells

© Wiley Process Flows after the Use of GT Cells

© Wiley Facility Layout Across the Organization Layout planning is organizationally important for an efficient operations Marketing is affected by layout especially when clients come to the site Human resources is affected as layout impacts people Finance is involved as layout changes can be costly endeavors

© Wiley Facility Layout within OM: How it all fits together Layout decisions are directly related to issues of product design and process selection (Ch 3). Job design, as process layouts tend to require greater worker skills than do product layouts (Ch 11). Degree of automation, as product layouts tend to be more capital intensive and use more automation compared to process layouts (Ch 3). Layout decisions are also affected by implementation of just-in-time (JIT) systems, which dictate a line flow and the use of group technology (GT) cells (Ch 7). As layout decisions specify the flow of goods through the facility, they impact all other aspects of operations management.

© Wiley Chapter 10 Highlights Layout planning is deciding on the best physical arrangement of all resources that consumes space within a facility. Proper layout planning is highly important for the efficient running of a business. Otherwise, there can be much wasted time and energy, as well as confusion. There are four basic types of layouts: process, product, hybrid, and fixed position. Process layouts group resources based on similar processes. Product layouts arrange resources in straight-line fashion. Hybrid layouts combine elements of both process and product layouts. Fixed-position layouts occur when the product is larger and cannot be moved.

© Wiley Chapter 10 Highlights – con’t Process layouts provide much flexibility and allow for the production of many products with differing characteristics. Product layouts, on the other hand, provide greater efficiency when producing one type of product. The steps for designing process layouts are (1) gather information about space needs, space availability, and closeness requirements of departments; (2) developing a block plan or schematic of the layout; and (3) developing a detailed layout.

© Wiley Chapter 10 Highlights – con’t The steps for designing an product layout are (1) identify tasks that need to be performed and their immediate predecessors; (2) determine output rate; (3) determine cycle time; (4) computing the theoretical minimum number of work stations, (5) assigning tasks to workstations; and (6) computing efficiency and balance delay. Hybrids layouts have advantages over other layout types because they combine elements of both process and product layouts to increase efficiency.

© Wiley Chapter 10 Highlights – con’t An example of hybrid layouts is group technology or cell layouts. Group technology is the process of crating groupings of products based on similar processing requirements. Cells are created for each grouping of products, resulting in a more orderly flow of products through the facility.

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