1. Chapter 10, 11, 17
Class 3
Webster FA2 2010

2. Facilities

3. 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

4. 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

5. 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

6. Manufacturing Process LayoutD G A
Receiving and
Shipping
Assembly
Painting Department
Lathe Department
Milling
Department
Drilling Department
Grinding P

7. Manufacturing Process LayoutD G A
Receiving and
Shipping
Assembly
Painting Department
Lathe Department
Milling
Department
Drilling Department
Grinding P

8. Manufacturing Process LayoutD G A
Receiving and
Shipping
Assembly
Painting Department
Lathe Department
Milling
Department
Drilling Department
Grinding P

9. A Product Layout In
Out

10. 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

11. 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

12. 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

13. 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

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

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

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

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

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

21. 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

22. 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

23. 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

24. 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

26. 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

27. 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

28. 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

29. 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

30. 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

31. 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

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

33. 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

34. 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

35. 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

36. Facility Location Models

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

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

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

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

42. 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

43. Source: Logistics Today, “The Logistics Quotient: Midwest

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

45. 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

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

47. 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

48. 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

49. 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

50. 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

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

52. 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

55. Project Management and Operations

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

57. 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)

58. 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 -

59. 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)

60. 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

61. 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

62. 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

63. 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

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

65. 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

66. 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.

67. A Gantt Chart Month 0 2 4 6 8 10 | | | | | 1 3 5 7 9 Figure 6.2
| | | | |
Activity
Design house and obtain financing
Lay foundation
Order and receive materials
Build house
Select paint
Select carpet
Finish work
Month
Figure 6.2

68. Example of Gantt Chart Problem

70. 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

71. 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.

72. Project Network for a House3 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
Figure 6.4

73. 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

74. The Critical Path A: 1-2-3-4-6-7 3 + 2 + 0 + 3 + 1 = 9 months1 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: = 9 months
B: = 8 months
C: = 8 months
D: = 7 months

75. The Critical Path 1 2 4 6 7 3 5 Activity Start Times1 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
Figure 6.6

76. 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 = = 3 months
Why is this important?

77. 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)

78. Activity Slack Data Activity LS ES LF EF Slacks *1-2 0 0 3 3 01 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 * * * * *
* Critical path

79. Activity Slack Data Activity LS ES LF EF Slacks *1-2 0 0 3 3 01 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 * * * * *
* Critical path 1 2 4 6 7 3 5
Figure 6.10
Activity Slack
S = 0
S = 1

80. 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

81. 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

82. 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

83. What’s Next
Mid Term
Chap 9, Chap 12 (Capacity and Aggregate Planning, Inventory Management) (Discussion Questions will be posted to website