1. Introduction to Facility Planning

2. Competitive Global Marketplace
Today’s world is much more competitive than the world in which our parents and grandparents worked.
“Open-market” countries depend heavily upon imported manufactured goods.
Through early 1960’s
1960’s - Present

3. Competitive Global Marketplace Example
LP Gas Hose - Canada
Regulator - Italy
Brass Fittings - USA
All components assembled in USA . . .
Then shipped to China for assembly into gas grills which are then shipped back to the USA for retail sale!

4. Market Driven Competitiveness
Survival of the fittest!
Every morning in Africa, a gazelle wakes up. It knows it must run faster than the fastest lion or it will be killed. Every morning a lion wakes up. It knows it must outrun the slowest gazelle or it will starve to death.
It doesn’t matter whether you are a lion or a gazelle—when the sun comes up, you had better be running.

5. Competitive Business Challenges
What makes some companies’ products seem to have a cost advantage over others?
Better manufacturing processes
Desire to continuously improve
Streamlined plant layout

6. Cycle Time
“One of the most noteworthy accomplishments in keeping the price of Ford products low is the gradual shortening of the production cycle. The longer an article is in the process of manufacture and the more it is moved about, the greater is its ultimate cost.”
Henry Ford, 1926

7. Cycle Time
One factor contributing to this lengthy production cycle is the facility layout. Manufacturing facilities design and material handling affect the productivity and profitability of a company more than almost any other corporate decision.

8. Brief History of Plant Layout
Companies of the past utilized a draftsperson to complete the plant layout.
The general belief was that there was a void of expertise in facility layout design.
Problems could be overcome with an extra forklift or conveyor length.

9. Plant Layout Ship QC Raw Stock Rec QC Screw Machine Shear Stamp Lathe
Drill
Assembly
Brake
Mill
Weld
Grind
Finish
Parts Stock

10. Impact of Poor Plant Layout
High material handling costs
Cycle and lead time delays
High WIP inventories
Lower quality
Product damage
Safety and morale problems
Poor equipment utilization
Congested aisles
Wasted floor space

11. How Can We Improve? Lean Manufacturing and Cellular Flow Before:
6 Assemblers Batch Assembly C/T 4.5 days

12. How Can We Improve? Lean Manufacturing and Cellular Flow After:
6 Assemblers Flow / Pull C/T 53 minutes

13. Facility Improvement Pitfalls
Poorly planned layout
Lack of employee involvement
Lack of management commitment
Budgetary constraints leading to a “piecemeal” approach
Focus on the almighty ROI versus the future of the business
Short term management focus

14. Facilities Planning Definition
Analysis
Concept
Design
Implementation
 For producing of products and services

15. Manufacturing Savings
Where can we save costs in manufacturing?
Reduce or Eliminate-
Work-in-process inventories (WIP)
Non-value added activities
Material handling costs
Processing time
Product defects

16. Manufacturing Savings
The largest components of factory labor and the cost of materials purchased and used in a factory are:
Internal transportation costs
Material handling costs
Storage costs
This includes both our manufacturing plants and those of our suppliers!

17. Facilities Layout Goals
Goals should include:
Minimize unit cost. Minimize project cost.
Optimize quality.
Promote the effective use of (a) people, (b) space, (c) equipment, and (d) energy.
Provide for (a) employee convenience, (b) employee safety, and (c) employee comfort.
Control project cost.
Achieve the production start date.
Build flexibility into the plan.
Reduce or eliminate excessive inventory.
Achieve miscellaneous goals.

18. Five Types of Facility Design Projects
New Facility – fewer restrictions and constraints on the layout since it is new
New Product – integration of a new product into the existing process and layout
Design Changes – incorporate the impact of design changes into the manufacturing process
Cost Reduction – redesign the existing layout to facilitate cost reduction programs and ideas
Retrofit – similar to a new facility layout except with the constraints present

19. Continuous Improvement Doctrine (CID)
The continuous improvement doctrine (CID) mandates that a company will commit to continuous, ongoing improvement plans for production processes, materials handling, and plant layout. They further recognize that these items are essential to achieve competitive advantage. The CID plan will be developed and maintained on an ongoing basis. #1