1. Layout Strategies 9
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2. Outline The Strategic Importance of Layout Decisions Types of Layout:
1. Office Layout
2. Retail Layout
3. Warehousing and Storage Layouts
4. Process-Oriented Layout
5. Fixed-Position Layout
6. Work Cells
7. Product-Oriented Layout
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3. Learning Objectives Define important issues in 7 types of layouts.
When you complete this chapter, you should be able to:
Define important issues in 7 types of layouts.
Learn how to balance production flow in a product-oriented facility
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4. Innovations at McDonald’s
Indoor seating (1950s)
Drive-through window (1970s)
Adding breakfast to the menu (1980s)
Adding play areas (late 1980s)
Redesign of the kitchens (1990s)
Self-service kiosk (2004)
Now three separate dining sections
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5. Innovations at McDonald’s
Indoor seating (1950s)
Drive-through window (1970s)
Adding breakfast to the menu (1980s)
Adding play areas (late 1980s)
Redesign of the kitchens (1990s)
Self-service kiosk (2004)
Now three separate dining sections
Six out of the seven are layout decisions!
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6. McDonald’s New Layout
Redesigning all 30,000 outlets around the world to have three separate dining areas:
Linger zone with comfortable chairs and Wi-Fi connections
Grab and go zone with tall counters
Flexible zone for kids and families (tables and chairs are movable)
Facility layout is a source of competitive advantage
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7. Strategic Importance of Layout Decisions
Developing an effective and efficient layout that will meet the firm’s competitive requirements
will contribute a lot to the profitabilitity of the firm
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8. Objectives in Layout Design
Higher utilization of space, equipment, and people
Improved flow of information, materials, or people
Improved employee morale and safer working conditions
Improved customer/client interaction
Flexibility
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9. A good Layout Requires Determining the Following
Material handling equipment (manual hand trucks, conveyors, cranes, AGVs)
Cost of moving material between work areas
Capacity and space requirements
Environment and aesthetics (windows, height and walls of the offices to facilitate air flow, to reduce noise etc.)
Information flow (open offices versus dividers)
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10. Types of Layout Office layout Retail layout Warehouse layout
Fixed-position layout
Process-oriented layout
Work-cell layout
Product-oriented layout
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11. 1. Office Layout
Grouping of employees, their equipment, and spaces to provide comfort, safety, and movement of information
Movement of information is main distinction
It is affected a lot by technological changes
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12. Relationship Chart: A tool to use in Office Layout Decisions
Figure 9.1
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13. 2. Retail Layout
Retail layouts (as are found in stores, and restaurants) are based on the idea that sales and profitability vary directly with customer exposure to products
Objective is to maximize profitability per square foot of floor space by exposing the customers to as many products as possible
Sales and profitability vary directly with customer exposure
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14. Store Layout
Figure 9.2
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15. Retail Slotting Due to: Limited shelf space
An increasing number of new products
Manufacturers pay fees to retailers (up to $2500) to get the retailers to display (slot) their product
Small companies complain about unfair competition
Wal-Mart is one of the few major retailers that does not demand slotting fees.
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16. Planogram
A planogram is a computerized marketing tool used in retail stores.
It is a diagram that shows where a product should be placed on a shelf and how many faces that product should hold. Often supplied by the manufacturerer
5 facings
Shampoo
Conditioner
2 ft.
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17. Servicescapes
The physical surroundings in which a service takes place, and how they affect customers and employees
Ambient conditions - background music, lighting, smell, and temperature (Leather chairs at Starbucks, Cinnamon smell at Tarchy)
Layout/Functionality – The wide aisles at METRO, Carpeted areas of a department store that encourage shoppers to slow down and browse)
Signs, symbols, and artifacts – Guitars on Hard Rock Cafes’s Walls.
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18. 3. Warehousing and Storage Layouts
Objective is to optimize trade-offs between handling costs and costs associated with warehouse space
Maximize the total “cube” of the warehouse – utilize its full volume while maintaining low material handling costs
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19. Automated Storage and Retrieval Systems (ASRSs)
ASRSs can significantly improve warehouse productivity.
Random stocking Vs Dedicated Stocking: Typically requires Automatic Identification Systems (AISs) and effective information systems.
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20. Cross-Docking Wal-Mart uses this
Materials are moved directly from receiving to shipping and are not placed in storage in the warehouse
Requires tight scheduling and accurate product identification
The global retail giant,
Wal-Mart uses this
strategy to gain a huge competitive
advantage over it’s competitors.
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21. Customizing
Value-added activities are performed at the warehouse (warehouse assembly jobs are common nowadays)
Enable low cost and rapid response strategies (Warehouses adjacent to major Airports)
Assembly of components
Loading software
Repairs
Customized labeling and packaging
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22. 4. Fixed-Position Layout
Product remains in one place, workers and equipment come to site
Preferred where the size of the job is bulky and heavy. Example of such type of layout is locomotives, ships, wagon building, aircraft manufacturing, etc.
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23. 5. Process-Oriented Layout
Similar machines and equipment are grouped together
Flexible and capable of handling a wide variety of products or services
Scheduling can be difficult and setup, material handling, and labor costs can be high
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24. Process-Oriented Layout
Surgery
Radiology
ER triage room
ER Beds
Pharmacy
Emergency room admissions
Billing/exit
Laboratories
Patient A - broken leg
Patient B - erratic heart pacemaker
Figure 9.3
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25. Manufacturing Process LayoutD G A
Receiving and
Shipping
Assembly
Painting Department
Lathe Department
Milling
Department
Drilling Department
Grinding P

26. Process-Oriented Layout
Arrange work centers so as to minimize the costs of material handling
Basic cost elements are
Number of loads (or people) moving between centers
Distance loads (or people) move between centers
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27. Process-Oriented Layout
Minimize cost = ∑ ∑ Xij Cij n
i = 1
j = 1
where n = total number of work centers or departments
i, j = individual departments
Xij = number of loads moved from department i to department j
Cij = cost to move a load between department i and department j
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28. Process Layout Example
Area 1 Area 2 Area 3
Area 4 Area 5 Area 6
60’
40’
Assembly Painting Machine Shop
Department Department Department
(1) (2) (3)
Receiving Shipping Testing
Department Department Department
(4) (5) (6)
Figure 9.5
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29. From-to Matrix Number of loads per week Assembly (1) Painting (2)
Department Assembly Painting Machine Receiving Shipping Testing
(1) (2) Shop (3) (4) (5) (6)
Assembly (1)
Painting (2)
Machine Shop (3)
Receiving (4)
Shipping (5)
Testing (6)
Number of loads per week
50 0
Figure 9.4
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30. Process Layout Example
Interdepartmental Flow Graph
100 50 20 10 30
Machine Shop (3)
Testing
(6)
Shipping
(5)
Receiving
(4)
Assembly
(1)
Painting
(2)
Figure 9.6
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31. Process Layout Example
The cost of moving one load between adjacent departments is estimated to be $1.
Moving a load between nonadjecent departments costs $2.
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32. Process Layout Example
Cost = ∑ ∑ Xij Cij n
i = 1
j = 1
Cost = $50 + $200 + $40
(1 and 2) (1 and 3) (1 and 6)
+ $30 + $50 + $10
(2 and 3) (2 and 4) (2 and 5)
+ $40 + $100 + $50
(3 and 4) (3 and 6) (4 and 5)
= $570
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33. Process Layout Example
Revised Interdepartmental Flow Graph 30 50 20 10
100
Machine Shop (3)
Testing
(6)
Shipping
(5)
Receiving
(4)
Painting
(2)
Assembly
(1)
Figure 9.7
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34. Process Layout Example
Cost = ∑ ∑ Xij Cij n
i = 1
j = 1
Cost = $50 + $100 + $20
(1 and 2) (1 and 3) (1 and 6)
+ $60 + $50 + $10
(2 and 3) (2 and 4) (2 and 5)
+ $40 + $100 + $50
(3 and 4) (3 and 6) (4 and 5)
= $480
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35. Process Layout Example
Area 1 Area 2 Area 3
Area 4 Area 5 Area 6
60’
40’
Painting Assembly Machine Shop
Department Department Department
(2) (1) (3)
Receiving Shipping Testing
Department Department Department
(4) (5) (6)
Figure 9.8
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36. Computer Software Graphical approach only works for small problems
Computer programs are available to solve bigger problems
CRAFT
ALDEP
CORELAP
Factory Flow
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37. 6. Work Cells
Reorganizes people and machines into groups to focus on single products or product groups (PART FAMILIES)
Group technology is a philosophy wherein similar products are grouped together
Processes required to make these similar parts are arranged as Work Cells
Similarity can be either in shape, size or in manufacturing process
Production Volume must justify forming the cells
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38. Part families Part families with similarity in manufacturing process
Part families with similarity in shape

39. Original Process LayoutB
Raw materials
Assembly 1 2 3 4 5 6 7 8 9 10 11 12

40. Part Routing Matrix Machines Parts 1 2 3 4 5 6 7 8 9 10 11 12
A x x x x x
B x x x x
C x x x
D x x x x x
E x x x
F x x x
G x x x x
H x x x
Figure 5.8

41. Reordered Routing Matrix
Machines
Parts
A x x x x x
D x x x x x
F x x x
C x x x
G x x x x
B x x x x
H x x x
E x x x

42. Revised Cellular Layout3 6 9
Assembly 1 2 4 8 10 5 7 11 12
A B C
Raw materials
Cell 1
Cell 2
Cell 3

43. Advantages of Work Cells
Reduced work-in-process inventory
Less floor space required
Reduced direct labor, and setup cost
More employee participation
Increased use of equipment and machinery
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44. Staffing and Balancing Work Cells
Determine the takt time (Also called cycle time)
Takt time =
Total work time available per day
Required output per day (in units)
Determine the number of operators required
Workers required =
Total operation time required
Takt time
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45. Staffing Work Cells Example
Required output: 600 Auto Mirrors
per day
Total work time: 8 hours per day
Total operation time
per mirror =140 seconds
Standard time required
Operations
Assemble
Paint
Test
Label
Pack for
shipment 60 50 40 30 20 10
Takt time?
# of workers required?
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46. Staffing Work Cells Example
600 Mirrors per day required
Mirror production scheduled for 8 hours per day
From a work balance chart total operation time
= 140 seconds
Takt time = (8 hrs x 60 mins) / 600 units
= .8 mins = 48 seconds
Workers required =
Total operation time required
Takt time
= 140 / 48 = 2.91
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47. Focused Work Center and Focused Factory
Focused Work Center (Plant within the plant)
Production moves from a general-purpose, process-oriented facility to a product-oriented large work cell producing a family of similar products. Example: Only bumpers and dashboards are produced in Toyota’s Texas Plant.
Focused Factory (manufacturing/service)
A focused work cell in a separate facility
Examples are: Silhouette, A world leading international frame manufacturer based in Austria. Children Hospital, Maternity Hospital
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48. 7. Repetitive and Product-Oriented Layout
Organized around products or families of similar high-volume, low-variety products
Volume is adequate for high equipment utilization
Product demand is stable enough to justify high investment in specialized equipment
Product is standardized
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49. Product-Oriented Layouts
Fabrication line
Builds components on a series of machines
Machine-paced
Require mechanical or engineering changes to balance
Assembly line
Puts fabricated parts together at a series of workstations
Paced by work tasks
Balanced by moving tasks
Both types of lines must be balanced so that the time to perform the work at each station is the same
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50. Product-Oriented Layouts
Low variable cost per unit
Low material handling costs
Reduced work-in-process inventories
Easier training and supervision
Rapid throughput
Advantages
High production volume is required to be justifiable
Work stoppage at any point ties up the whole operation
Lack of flexibility in product or production rates
Disadvantages
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51. Production/Assembly Line
Raw materials
or customer
Finished item
Station 2 3 4
Materials
and/or labor
Used for Repetitive or Continuous Processing
Example: automobile assembly lines, cafeteria serving line 1
In manufacturing environments

52. U-Shaped Production Line1 2 3 4 5 6 7 8 9 10 In
Out
Workers
Advantages:
… is more compact; its length is half the length of a straight line.
Communication among workers is increased because workers are clustered.
Compared to a straight line, flexibility in work assignments is increased because workers can handle more stations.
Materials entering point is the same as finished product leaving point, minimize material handling

53. McDonald’s Assembly Line
Figure 9.12
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54. Disassembly Lines
Disassembly is being considered in new product designs
“Green” issues and recycling standards are important consideration
Automotive disassembly is the 16th largest industry in the US
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55. Assembly-Line Balancing
Line Balancing is the process of assigning tasks to workstations in such a way that the workstations have approximately equal time requirements.
Starts with the precedence relationships
Determine cycle time
Calculate theoretical minimum number of workstations
Balance the line by assigning specific tasks to workstations
Compute efficiency
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56. Line Balancing
Goal is to minimize idle time along the line, which leads to high utilization of labor and equipment
Perfect balance is often impossible to achieve

57. Cycle Time Cycle time is the maximum time allowed
at each workstation to complete its set
of tasks on a unit.
The primary determinant is what the line’s cycle time will be.
Cycle time also establishes the output rate of a line. For instance, if the cycle time is two minutes, units will come off the end of the line at the rate of one every two minutes.

58. Example 1: Cycle Times With 5 workstations, CT = 1.0 minute.
Cycle time of a system = longest processing time in a workstation.

59. Example 1: Cycle Times With 1 workstation, CT = 2.5 minutes.
Cycle time of workstation = total processing time in of tasks.
With 3 workstations, can CT = 1.0 minute?
0.5 min.
1.0 min.
0.7 min.
0.1 min.
0.2 min.
Workstation 1
Workstation 2
Workstation 3

60. Output Capacity OT Output capacity = CT OT = operating time per day
CT = cycle time
Example: 8 hours per day
OT = 8 x 60 = 480 minutes per day
Cycle Time = CT = 1.0 min
Output = OT/CT = 480/1.0 = 480 units per day (Maximum Capacity)
Cycle Time = CT = 2.5 min
Output = OT/CT = 480/2.5 = 192 units per day

61. Cycle Time Determined by Desired OutputOT D
CT = cycle time =
D = Desired output rate
Example: 8 hours per day
OT = 8 x 60 = 480 minutes per day
D = 480 units per day
CT = OT/D = 480/480 = 1.0 Minute

62. Theoretical Minimum Number of Stations Required
Nmin = CT å t =
sum of task times
Nmin = theoretical Minimum Number of
Workstations Required
Example: 8 hours per day, desired output rate is 480 units per day
CT = OT/D = 480/480 = 1.0 Minute
Nmin = ∑t /CT = 2.5/1.0 = 2.5 stations
≈ 3 stations

63. Wing Component Example
Performance
Time Immediate
Task (minutes) Predecessors
A 10 —
B 11 A
C 5 B
D 4 B
E 12 A
F 3 C, D
G 7 F
H 11 E
I 3 G, H
Total time 66
This means that tasks B and E cannot be done until task A has been completed
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64. Wing Component Example
Performance
Time Immediate
Task (minutes)
A 10 —
B 11 A
C 5 B
D 4 B
E 12 A
F 3 C, D
G 7 F
H 11 E
I 3 G, H
Total time 66
Predecessors 10 11 12 5 4 3 7 C D F A B E G I H
Figure 9.13
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65. Wing Component Example
480 available mins per day
40 units required
Performance Task Must Follow
Time Task Listed
Task (minutes) Below
A 10 —
B 11 A
C 5 B
D 4 B
E 12 A
F 3 C, D
G 7 F
H 11 E
I 3 G, H
Total time 66
Cycle time =
Production time available per day
Units required per day
= 480 / 40
= 12 minutes per unit I G F C D H B E A 10 11 12 5 4 3 7
Figure 9.13
Minimum number of workstations =
∑ Time for task i
Cycle time n
i = 1
= 66 / 12
= 5.5 or 6 stations
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66. Wing Component Example
Line-Balancing Heuristics
1. Longest task time
Choose the available task with the longest task time
2. Most following tasks
Choose the available task with the largest number of following tasks
3. Ranked positional weight
Choose the available task for which the sum of following task times is the longest
4. Shortest task time
Choose the available task with the shortest task time
5. Least number of following tasks
Choose the available task with the least number of following tasks
480 available mins per day
40 units required
Cycle time = 12 mins
Minimum workstations
= 5.5 or 6
Performance Task Must Follow
Time Task Listed
Task (minutes) Below
A 10 —
B 11 A
C 5 B
D 4 B
E 12 A
F 3 C, D
G 7 F
H 11 E
I 3 G, H
Total time 66 I G F C D H B E A 10 11 12 5 4 3 7
Figure 9.13
Table 9.4
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67. Wing Component Example
480 available mins per day
40 units required
Cycle time = 12 mins
Minimum workstations
= 5.5 or 6
Performance Task Must Follow
Time Task Listed
Task (minutes) Below
A 10 —
B 11 A
C 5 B
D 4 B
E 12 A
F 3 C, D
G 7 F
H 11 E
I 3 G, H
Total time 66 I G F H C D B E A 10 11 12 5 4 3 7
Station 2
Station 3
Station 1
Station 6
Station 4
Station 5
Figure 9.14
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68. Wing Component Example
480 available mins per day
40 units required
Cycle time = 12 mins
Minimum workstations
= 5.5 or 6
Performance Task Must Follow
Time Task Listed
Task (minutes) Below
A 10 —
B 11 A
C 5 B
D 4 B
E 12 A
F 3 C, D
G 7 F
H 11 E
I 3 G, H
Total time 66
Efficiency =
∑ Task times
(Actual number of workstations) x (Largest cycle time)
= 66 minutes / (6 stations) x (12 minutes)
= 91.7%
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