Chapter 10, 11, 17 Class 3 Webster Summer 2011

Facilities

Objectives of Facility Layout Minimize material handling costs Minimize material handling costs Utilize space efficiently Utilize space efficiently Utilize labor efficiently Utilize labor efficiently Eliminate bottlenecks Eliminate bottlenecks Facilitate communication and interaction between workers, between workers and their supervisors, or between workers and customers 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 Eliminate waste or redundant movement Facilitate the entry, exit, and placement of material, products, or people Facilitate the entry, exit, and placement of material, products, or people Incorporate safety and security measures Incorporate safety and security measures Promote product and service quality Promote product and service quality Encourage proper maintenance activities Encourage proper maintenance activities Provide a visual control of operations or activities Provide a visual control of operations or activities Provide flexibility to adapt to changing conditions Provide flexibility to adapt to changing conditions Increase capacity Increase capacity

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

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

A Product Layout In Out

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

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

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

Block Diagrams (a) Initial block diagram

Block Diagrams (a) Initial block diagram (b) Final block diagram

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

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

Relationship Diagramming Example A A A O O O O O U U U U E X I Production Offices Stockroom Shipping and receiving Locker room Toolroom AAbsolutely necessary EEspecially important IImportant OOkay UUnimportant XUndesirable

Relationship Diagramming Example A A A O O O O O U U U U E X I Production Offices Stockroom Shipping and receiving Locker room Toolroom AAbsolutely necessary EEspecially important IImportant OOkay UUnimportant XUndesirable

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

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

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

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

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

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

Cellular Layouts 1.Identify families of parts with similar flow paths 2.Group machines into cells based on part families 3.Arrange cells so material movement is minimized 4.Locate large shared machines at point of use

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

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

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

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

Facility Location Models

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

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

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

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

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

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

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

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

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

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

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

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 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 -

Elements of Project Management Project team Project team Individuals from different departments within company Individuals from different departments within company Matrix organization Matrix organization Team structure with members from different functional areas depending on skills needed Team structure with members from different functional areas depending on skills needed Project manager - Leader of project team 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 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 Statement of work Written description of goals, work & time frame of project Written description of goals, work & time frame of project Activities require labor, resources & time Activities require labor, resources & time Precedence relationship shows sequential relationship of project activities Precedence relationship shows sequential relationship of project activities

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

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

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

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

Gantt Charts 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. Gantt described two principles for his charts: 1.measure activities by the amount of time needed to complete them 2.the space on the chart can be used the represent the amount of the activity that should have been done in that time.

A Gantt Chart |||||||||| Activity Design house and obtain financing Lay foundation Order and receive materials Build house Select paint Select carpet Finish work MonthMonth Figure 6.2

Example of Gantt Chart Problem

CPM/PERT Critical Path Method (CPM) Critical Path Method (CPM) DuPont & Remington-Rand (1956) DuPont & Remington-Rand (1956) Deterministic task times Deterministic task times Project Eval. & Review Technique (PERT) Project Eval. & Review Technique (PERT) US Navy, Lockheed US Navy, Lockheed Multiple task time estimates 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 Lay foundation Design house and obtain financing Order and receive materials Dummy Finish work Select carpet Select paint Build house Figure 6.4

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

The Critical Path A: = 9 months B: = 8 months C: = 8 months D: = 7 months Lay foundation Design house and obtain financing Order and receive materials Dummy Finish work Select carpet Select paint Build house

The Critical Path Lay foundation Design house and obtain financing Order and receive materials Dummy Finish work Select carpet Select paint Build house Start at 3 months Start at 5 months 1 Finish at 9 months Start at 8 months Figure 6.6 Activity Start Times

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

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

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 Chap 9, Chap 12 (Capacity and Aggregate Planning, Inventory Management)