1. Facility Planning Definition and Objectives Engineering Design Process
Important Factors to Evaluate Facility Plans
Evaluation of Alternative Facility Plans
- Pairwise Comparison Technique - Factor Analysis Technique
- Prioritization Matrix
Material Handling Checklist
Principles of Material Handling
Objectives of Facility Layout
Traditional Facility Layout Procedures
- Naddler’s Ideal System Approach - Immer’s Basic Steps
- Apple’s Plant Layout Procedure - Reed’s Plant Layout Procedure
- Muther’s Systematic Layout Planning
Information Gathering
- Information about Product - Information about Process
- Information about Schedule

2. Definition of Facility Planning
Facility Planning determines how an activity’s tangible fixed assets best support achieving the activity’s objectives.
Examples:
a. In manufacturing, the objective is to support production.
b. In an airport, the objective is to support the passenger airplane interface.
c. In a hospital, the objective is to provide medical care to patients.

3. Hierarchy of Facility Planning
Facility Location
Structural Design
Facility Planning
Facility Design
Layout Design
Handling System Design
Location: is the placement of a facility with respect to customers, suppliers, and other facilities with which it interfaces.
Structure: consists of the building and services (e.g., gas, water, power, heat, light, air, sewage).
Layout: consists of all equipment, machinery, and furnishings within the structure.
Handling System: consists of the mechanism by which all interactions required by the layout are satisfied (e.g., materials, personnel, information, and equipment handling systems).

4. Significance of Facility Planning
1. Since 1955, approximately 8% of the gross national product (GNP) is spent in new facilities in the U.S. :
2. It is estimated that 20 to 50 % of operating costs within manufacturing are attributed to material handling. It is generally agreed that effective facilities planning can reduce material handling costs by 10 to 30 %.
Industry
Manufacturing
Public Utilities
Commercial
Communication
• • •
Total
GNP %
3.2
1.6
1.5
1.0
8.0

5. Strategic Facilities Planning Issues
1. Number, location, and sizes of warehouses and/or distribution centers.
2. Centralized versus decentralized storage supplies, raw materials, work-in-process, and finished goods for single- and multi-building sites, as well as single- and multi-site companies.
3. Acquisition of existing facilities versus design of model factories and distribution centers of the future.
4. Flexibility required because of market and technological uncertainties.
5. Interface between storage and manufacturing.
6. Level of vertical integration, including "subcontract versus manufacture" decisions.
7. Control systems, including materials control and equipment control.
8. Movement of materials between buildings, between sites.
9. Changes in customers' and suppliers' technology as well as firm's own manufacturing technology and materials handling, storage, and control technology.
10. Design-to-cost goals for facilities.

6. Facility Planning Objectives
1. Support the organization's mission through improved material handling, materials control, and good housekeeping.
2. Effectively utilize people, equipment, space, and energy.
3. Minimize capital investment.
4. Be flexible and promote ease of maintenance.
5. Provide for employee safety and job satisfaction.

7. Engineering Design Process
Typically, design problems do not have well-defined, unique, optimum solutions. We are interested in obtaining a satisfactory solution.
General Procedure for Solving Engineering Design Problems
1. Formulate the problem.
2. Analyze the problem.
3. Search for alternative solutions.
4. Evaluate the design alternatives.
5. Select the preferred design.
6. Implement the design.

8. Application of the Engineering Design Process to Facility Planning
1. Define (or redefine) the objective of the facility:
Specify quantitatively the products to be produced or service to be provided.
2. Specify the primary and support activities to be performed in accomplishing the objective:
Requirements for primary activities include operations, equipment, personnel, and material flows.
3. Determine the interrelationships among all activities:
Both qualitative and quantitative relationships should be defined.
4. Determine the space requirements for all activities:
These are determined considering the equipment, materials, and personnel requirements.
5. Generate alternative facility plans:
Including alternative facility locations and alternative designs for the facility.
6. Evaluate alternative facility plans:
Determine the important factors (see list of factors). For each candidate plan, evaluate if and how those factors will affect the facility and its operations.

9. Application of the Engineering Design Process to Facility Planning (cont.)
7. Select a facility plan:
Cost may not be the only major consideration.
Use the information in step 6 to determine a plan (pairwise comparison is a good ranking procedure).
8. Implement the facility plan:
Considerable amount of planning must precede the construction of a facility or the layout of an area.
9. Maintain and adapt the facility plan:
The facility plan must be modified as new requirements are placed, e.g., new energy saving measures, changes in product design may require different flow pattern or handling equipment, etc.
10. Redefine the objective of the facility:
Similar to step 1.
Changes in product design and/or quantities may require changes into the layout plan.

10. Important Factors to Evaluate Facility Plans
In developing well-thought facilities design alternatives it is important to look into issues such as:
a) Layout characteristics
- total distance traveled
- manufacturing floor visibility
- overall aesthetics of the layout
- ease of adding future business
b) Material handling requirements
- use for the current material handling equipment
- investment requirements on new equipment
- space and people requirements

11. Important Factors to Evaluate Facility Plans (cont.)
c) Unit load implied
- impact on WIP levels
- space requirements
- impact on material handling equipment
d) Storage strategies
- space and people requirements
- human factors risks
e) Overall building impact
- estimated cost of the alternatives
- opportunities for new business

12. Pairwise Comparison Technique
It is a good ranking procedure. All combinations of two candidate plans are ranked for each factor.
If n = number of candidate plans, and m = number of factors, the total number of comparison is mn(n-1)/2.
It is a good procedure in testing for inconsistencies, e.g.,
A > B, B > C, and C > A.
If there are not inconsistencies and, for example, four candidate plans (A, B, C, and D), the pairwise comparison may produce the following results:
A < B B < C C > D
A < C B > D
A > D
Next, a factor analysis technique can be used to determine the facility plan, i.e., assign a weight to each factor, and compute the total weight for each candidate plan.

13. Factor Analysis Technique
The facility plan scoring method is a very popular, subjective-decision making tool that is relatively easy to use. It consists of these steps:
Step 1. List all factors that are important - that have an impact on the facility plan decision.
Step 2. Assign an appropriate weight (typically between 0 and 1) to each factor based on the relative importance of each.
Step 3. Assign a score (typically between 0 and 100) to each facility plan with respect to each factor identified in Step 1.
Step 4. Compute the weighted score for each factor for each facility plan by multiplying its weight by the corresponding score.
Step 5. Compute the sum of the weighted scores for each facility plan and choose a facility plan based on these scores.

14. Example 1
A payroll processing company has recently won several major contracts in the Midwest region of the United States and Central Canada and wants to open a new, large facility to serve these areas. Because customer service is so important, the company wants to be as near its “customers” as possible. A preliminary investigation has shown that Minneapolis, Winnipeg, and Springfield, Illinois are the three most desirable locations, and the payroll company has to select one of these. A subsequent thorough investigation of each location with respect to eight important factors generated the raw scores and weights. Using the location scoring method, determine the best location for the new payroll processing facility.

15. Factors and weights for three locations
Example 1 (cont.)
Factors and weights for three locations
Score
Weight
0.25
0.15
0.10
0.08
0.07
Factor
Proximity to customer
Land and construction prices
Wage rates
Property taxes
Business taxes
Commercial travel
Insurance costs
Office services
Minneapolis 95 60 70 80 90
Winnipeg 90 60 45 65 95
Springfield 65 90 60 70 85 75 80

16. Weighted scores for three locations
Example 1 Solution
Weighted scores for three locations
Weighted Score
Factor
Proximity to customer
Land and construction prices
Wage rates
Property taxes
Business taxes
Commercial travel
Insurance costs
Office services
Sum of weighted scores
Minneapolis
23.75
9.00
10.50
7.00
8.00
5.60
6.30
78.15
Winnipeg
22.50
9.00
6.75
6.50
7.60
6.30
76.65
Springfield
16.25
13.50
9.00
7.00
8.50
7.50
4.80
5.60
72.15

17. Prioritization Matrix
The prioritization matrix can be used to judge the relative importance of each criterion as compared to each other. Table 1 represents the prioritization of the criteria for the facilities design example. The criteria are labeled to help in building a table with weights:
A. Total distance traveled G. Space requirements
B. Manufacturing floor visibility H. People requirements
C. Overall aesthetics of the layout I. Impact on WIP levels
D. Ease of adding future business J. Human factor risks
E. Use of material handling equipment K. Estimated cost of alternative
F. Investment in new material handling equipment
The weights typically used to compare the importance of each pair of criteria are:
1 = equally important
5 = significantly more important 1/5 = significantly less important
10 = extremely more important 1/10 = extremely less important

18. Prioritization Matrix (cont.)
Note that the values in cells (i, j) and (j, i) are reciprocals. The resulting relative importance is presented in the last column in parenthesis. The most important criterion for facilities design selection is the impact on WIP levels (weight = 18.3), followed by the estimated cost of the solution (weight = 13.5).
This same methodology can be employed to compare all facilities design alternatives in each weighted criterion. For example, suppose five layout alternatives are generated; namely, P, Q,. R, S, and T. Table 2 represents the ranking of the layout alternatives based on the impact of WIP levels criterion.
If we construct a similar table for the remaining ten criteria, we will be able to evaluate each layout alternative in the eleven criteria to identify the best layout. The format of this final table is presented in Table 3. The last column is computed as in Tables 1 and 2. The row totals (represented by ) are added to obtain the grand total, after which the percentages (%P, …, %T) are determined. These percentages tell us the relative goodness of each layout alternative. These results should be presented to plant management to facilitate final decisions regarding the layout.

19. Table 1: Prioritization Matrix for the Evaluation of Facilities Design AlternativesJ K
Column Total
A B C D E F G H I J K Row totals (%)
(9.9)
1/ /5 1/5 1/10 1/5 1/5 1/10 1/5 1/ (2.4)
1/10 1/5 1 1/10 1/10 1/10 1/5 1/5 1/10 1/10 1/ (0.7)
1/ /5 1/5 1/5 1/5 1/10 1/5 1/ (5.4)
/ / (10.7)
(12.7)
/5 1/ /5 1/5 1/ (7.1)
/5 1/ /10 1/5 1/ (7.1)
(18.3)
1/ (12.2)
/5 1/ (13.5)
Criteria

20. Table 2: Prioritization of Layout Alternatives Based on WIP LevelsQ R S T
Column Total
P Q R S T Row totals (%)
/10 1/ (9.9)
1/5 1 1/5 1/10 1/ (2.2)
(30.0)
/10 1 1/ (29.0)
5 10 1/ (28.9)
Layout
WIP
Levels

21. Table 3: Ranking of Layouts by All CriteriaP Q R S T
Column
A B C D E F G H I J K Row totals (%)
.099  .183 =  (%P)
.022  .183 =  (%Q)
.300  .183 =  (%R)
.290  .183 =  (%S)
.289  .183 =  (%T)
Grand Total
Criteria

22. Material Handling Checklist
Is the material handling equipment more than 10 years old?
Do you use a wide variety of makes and models which require a high spare parts inventory?
Are equipment breakdowns the result of poor preventive maintenance?
Do the lift trucks go too far for servicing?
Are there excessive employee accidents due to manual handling of materials?
Are materials weighing more than 50 pounds handled manually?
Are there many handling tasks that require 2 or more employees?
Are skilled employees wasting time handling materials?
Does material become congested at any point?
Is production work delayed due to poorly scheduled delivery and removal of materials?
Is high storage space being wasted?
Are high demurrage charges experienced?

23. Material Handling Checklist (cont.)
Is material being damaged during handling?
Do shop trucks operate empty more than 20% of the time?
Does the plant have an excessive number of rehandling points?
Is power equipment used on jobs that could be handled by gravity?
Are too many pieces of equipment being used because their scope of activity is continued?
Are many handling operations unnecessary?
Are single pieces being handled where unit loads could be used?
Are floors and ramps dirty and in need of repair?
Is handling equipment being overloaded?
Is there unnecessary transfer of material from one container to another?
Are inadequate storage areas hampering efficient scheduling of movement?
Is it difficult to analyze the system because there is no detailed flow chart?
Are indirect labor costs too high?

24. Questions to be Resolved in Developing a Material Handling Plan
1. Should automated storage/retrieval systems (AR/RS), computer controlled narrow aisle trucks, manually operated trucks, or some combination be used for palletized storage/retrieval?
2. Should miniloads, automated carousels, manually operated carousels, operator aboard storage/retrieval machines, or come combination be used for storage/retrieval of small parts?
3. Should automated guided vehicles, tow lines, pallet conveyors, tractor-trailer trains, pallet trucks, or some combination be used to deliver loads to/from palletized storage?
4. Should fixed path, variable paths, or some combination be used for material handling to/from/within manufacturing?
5. Should centralized or distributed storage of work-in-process be used? How should it be stored, moved, protected, and controlled?

25. Questions to be Resolved in Developing a Material Handling Plan (cont
6. Should transporter-conveyors, light duty roller conveyors, or carts be used to transport kits and parts to/from assembly stations? Should kitting be performed at all? If so, what issue quantities should be used?
7. Should modular workstations, modular handling systems, and/or modular storage units be used in manufacturing and assembly?
8. Should real-time inventory control be used to shop floor control and storage of raw material/work-in-process/finished goods? What data entry technology is appropriate?
9. Should block stacking, deep-lane storage, mobile rack, double-deep rack, drive-in/drive-through rack, selective rack, or some combination be used for pallet storage?
10. Should automatic loading/unloading of trailers be planned for receiving and shipping? If so, when, where, and for what materials?

26. Top 10 Principles of Material Handling
Principle 1. Planning Principle
All material handling should be the result of a deliberate plan where the needs, performance objectives and functional specification of the proposed methods are completely defined at the outset. The plan should be developed in consultation between the planner(s) and all who will use and benefit from the equipment to be employed.
Principle 2. Standardization Principle
Material handling methods, equipment, controls and software should be standar-dized within the limits of achieving overall performance objectives and without sacrificing needed flexibility, modularity, and throughput. Standardization means less variety and customization in the methods and equipment employed.
Principle 3. Work Principle
Material handling work should be minimized without sacrificing productivity or the level of service required of the operation.

27. Top 10 Principles of Material Handling (cont.)
Principle 4. Ergonomic Principle
Human capabilities and limitations must be recognized and respected in the design of material handling tasks and equipment to ensure safe and effective operations. Ergonomics is the science that seeks to adapt work or working conditions to suit the abilities of the worker.
Principle 5. Unit Load Principle
Unit loads shall be appropriately sized and configured in a way which achieves the material flow and inventory objectives at each stage in the supply chain. A unit load is one that can be stored or moved as a single entity at one time, such as pallet, container or tote, regardless of the number of individual items that make up the load.
Principle 6. Space Utilization Principle
Effective and efficient use must be made of all available space. Space in material handling is three dimensional and therefore is counted as cubic space.

28. Top 10 Principles of Material Handling (cont.)
Principle 7. System Principle
Material movement and storage activities should be fully integrated to form a coordinated, operational system that spans receiving, inspection, storage, production, assembly, packaging, unitizing, order selection, shipping, transportation and the handling of returns.
Principle 8. Automation Principle
Material handling operations should be mechanized and/or automated where feasible to improve operational efficiency, increase responsiveness, improve consistency and predictability, decrease operating costs, and eliminate repetitive or potentially unsafe manual labor.
Principle 9. Environmental Principle
Environmental impact and energy consumption should be considered as criteria when designing or selecting alternative equipment and material handling systems.

29. Top 10 Principles of Material Handling (cont.)
Principle 10. Life Cycle Cost Principle
A thorough economic analysis should account for the entire life cycle of all material handling equipment and resulting system. Life cycle costs include all cash flows that occur between the time the first dollar is spent to plan or procure a new piece of equipment, or to put in place a new method, until that method and/or equipment is totally replaced. Life cycle costs include capital investment, installation, setup and equipment programming, training, system testing and acceptance, operating (labor, utilities, etc.), maintenance and repair, reuse value, and ultimate disposal.

30. Facility Layout A Layout problem may be to
determine the location for a new machine,
develop a new layout for an existing production plant,
develop a layout for a new production plant,
etc.
A Layout problem may arises due to
changes in the design of a product,
addition or deletion of a product,
change in the demand of a product,
changes in the design of the process,
addition or deletion of a process,
replacement of equipment,

31. Objectives of Facility Layout
Minimize investment in equipment.
Minimize production time.
Minimize material handling cost.
Maximize utilization of space.
Maintain flexibility of arrangement and operation.
Provide safety and comfort to employees.

32. Sequential Approach vs Integrated Approach
Material Handling System Design
Product Design
Process Design
Facility Layout
Production Planning

33. Sequential Approach vs Integrated Approach
Impressive results in cost, quality, productivity, sales, customer satisfaction, delivery time, inventory levels, space + handling requirements, building size, etc.
Concurrent Engineering
Terms of product, process, scheduling and facility design planners work with marketing, purchasing, etc. Personnel address the design process in an integrated way.
Product Design
Process Design
Schedule Design
Layout Design +
Material Handling System Design

34. Facility Layout Procedures
Naddler’s Ideal System Approach (1961)
Immer’s Basic Steps (1950)
Apple’s Plant Layout Procedure (1977)
Reed’s Plant Layout Procedure (1961)
Muther’s Systematic Layout Planning (1961)

35. Naddler’s Ideal System Approach
The ideal system approach is based on the following hierarchical approach toward design:
1. Aim for the “theoretical ideal system.”
2. Conceptualize the “ultimate ideal
system.”
3. Design the “technologically workable
ideal system.”
4. Install the “recommended system.”
Theoretical ideal system
Ultimate ideal system
Technologically workable system
Recommended system
Present system

36. Immer’s Basic Steps
Immer described the analysis of a layout problem as follows: “This analysis should be composed of three simple steps, which can be applied to any type of layout problem. These steps are:
1. Put the problem on the paper.
2. Show lines of flow.
3. Convert flow lines to machine lines.”

37. Apple’s Plant Layout Procedure
Apple recommended that the following detailed sequence of steps be used in designing a plant layout.
1. Procure the basic data Determine storage requirements
2. Analyze the basic data Plan service and auxiliary activities.
3. Design the productive process Determine space requirements.
4. Plan the material flow pattern Allocate activities to total space.
5. Consider the general material handling plan Consider building type
6. Calculate equipment requirements Consider master layouts.
7. Plan individual work stations Evaluate, adjust and check the layout.
8. Select specific material handling equipment Obtain approval.
9. Coordinate groups of related operations Install the layout.
10. Design activity relationships Follow up on implementation of the layout.

38. Reed’s Plant Layout Procedure
In “planning for and preparing the layout,” Reed recommended that the following steps be taken in his “systematic plan of attach”:
1. Analyze the product to be produced.
2. Determine the process required to manufacture the product.
3. Prepare layout planning charts.
4. Determine work stations.
5. Analyze storage area requirements.
6. Establish minimum aisle widths.
7. Establish office requirements.
8. Consider personnel facilities and services.
9. Survey plant services.
10. Provide for future expansion.

39. Systematic Layout Planning Procedure
(Muther 1961)

40. Information Gathering
Information about product, process and schedule is required.
The major effect of product design decisions is felt by the process designer, i.e., the material used to make a part will influence processing decisions.
Design for automation programs have been developed that consider the impact of the design of the product on the assembly process. Their primary thrusts are (1) dimensional reduction, (2) parts elimination, and (3) parts standardization.For (1), the cost of assembly is reduced if it occurs in a single dimension. The complexity of programming a robot increases geometrically with the number of assembly dimensions.For (2), if more complex parts can be produced, the number of parts can be reduced.
Schedule design decisions tell us how much to produce and when to produce. From the market forecast, the production demand is determined and decisions about the production rate are made.

41. Information Gathering
Information about product :
- Photographs about the product
- “Exploded” drawings
- Engineering drawings of individual parts
- Parts list
- Bill of materials (structure of product)
- Assembly chart

42. Information Gathering
Information about process :
- Route sheet (equipment and operation times)
- Precedence Diagram (prerequisite assembly steps before new
assembly step)
- Operation process chart (processing operations, assembly
operations, and inspections)

43. Information Gathering
Information about schedule :
- Production rate
- Product mix
- Market forecast (it is better to work with tomorrow’s data than
today’s data)
- Gantt charts

44. Gantt Project Planning Chart
Gantt project planning chart indicates the weekly operation schedule, the estimated amount of time a particular operation will take, and the actual amount of time that the particular operation has taken. The following chart shows that the project is 1 week behind schedule.

45. Intermittent Production
Schedule Design
Schedule design decisions tell us how much to produce and when to produce.
Production schedules can be given in Gantt charts.
Market Forecast
Number of Machines
Production Demand
Production Rate
Product Mix +
Production Rate
Continuos or
Intermittent Production