1. Copyright 2006 John Wiley & Sons, Inc. Beni Asllani University of Tennessee at Chattanooga Facilities Operations Management - 6 th Edition Chapter 7 Roberta Russell & Bernard W. Taylor, III

2. Copyright 2006 John Wiley & Sons, Inc.7-2 Lecture Outline   Basic Layouts   Designing Process Layouts   Designing Service Layouts   Designing Product Layouts

3. Copyright 2006 John Wiley & Sons, Inc.7-3 Facility Layout   Minimize material-handling costs   Utilize space efficiently   Utilize labor efficiently   Eliminate bottlenecks   Facilitate communication and interaction   Reduce manufacturing cycle time   Reduce customer service time   Eliminate wasted or redundant movement   Increase capacity   Facilitate entry, exit, and placement of material, products, and people   Incorporate safety and security measures   Promote product and service quality   Encourage proper maintenance activities   Provide a visual control of activities   Provide flexibility to adapt to changing conditions Arrangement of areas within a facility to:

4. Copyright 2006 John Wiley & Sons, Inc.7-4 BASIC LAYOUTS   Process layouts group similar activities together according to process or function they perform   Product layouts arrange activities in line according to sequence of operations for a particular product or service   Fixed-position layouts are used for projects in which product cannot be moved

5. Copyright 2006 John Wiley & Sons, Inc.7-5 Process Layout in Services Women’s lingerie Women’s dresses Women’s sportswear Shoes Cosmetics and jewelry Entry and display area Housewares Children’s department Men’s department

6. Copyright 2006 John Wiley & Sons, Inc.7-6 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

7. Copyright 2006 John Wiley & Sons, Inc.7-7 A Product Layout In Out

8. Copyright 2006 John Wiley & Sons, Inc.7-8   Description   Type of process   Product   Demand   Volume   Equipment   Description   Type of process   Product   Demand   Volume   Equipment  Sequential arrangement of activities  Continuous, mass production, mainly assembly  Standardized, made to stock  Stable  High  Special purpose Process Comparison of Product and Process Layouts  Functional grouping of activities  Intermittent, job shop, batch production, mainly fabrication  Varied, made to order  Fluctuating  Low  General purpose Product

9. Copyright 2006 John Wiley & Sons, Inc.7-9   Workers   Inventory   Storage space   Material handling   Aisles   Scheduling   Layout decision   Goal   Advantage   Workers   Inventory   Storage space   Material handling   Aisles   Scheduling   Layout decision   Goal   Advantage  Limited skills  Low in-process, high finished goods  Small  Fixed path (conveyor)  Narrow  Part of balancing  Line balancing  Equalize work at each station  Efficiency Process Comparison of Product and Process Layouts  Varied skills  High in-process, low finished goods  Large  Variable path (forklift)  Wide  Dynamic  Machine location  Minimize material handling cost  Flexibility Product

10. Copyright 2006 John Wiley & Sons, Inc.7-10 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

11. Copyright 2006 John Wiley & Sons, Inc.7-11 Designing Process Layouts  Goal: 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

12. Copyright 2006 John Wiley & Sons, Inc.7-12 Designing Service Layouts   Must be both attractive and functional   Types Free flow layouts encourage browsing, increase impulse purchasing, are flexible and visually appealing Grid layouts encourage customer familiarity, are low cost, easy to clean and secure, and good for repeat customers Loop and Spine layouts both increase customer sightlines and exposure to products, while encouraging customer to circulate through the entire store

13. Copyright 2006 John Wiley & Sons, Inc.7-13 Types of Store Layouts

14. Copyright 2006 John Wiley & Sons, Inc.7-14 Designing Product Layouts   Objective Balance the assembly line   Line balancing tries to equalize the amount of work at each workstation   Precedence requirements physical restrictions on the order in which operations are performed   Cycle time maximum amount of time a product is allowed to spend at each workstation

15. Copyright 2006 John Wiley & Sons, Inc.7-15 Cycle Time Example C d = production time available desired units of output C d = (8 hours x 60 minutes / hour) (120 units) C d = = 4 minutes 480 120

16. Copyright 2006 John Wiley & Sons, Inc.7-16 Flow Time vs Cycle Time  Cycle time = max time spent at any station  Flow time = time to complete all stations 123 4 minutes Flow time = 4 + 4 + 4 = 12 minutes Cycle time = max (4, 4, 4) = 4 minutes

17. Copyright 2006 John Wiley & Sons, Inc.7-17 Efficiency of Line  i i = 1 titititi nC a E =E =E =E =  i i = 1 titititi CdCdCdCd N =N =N =N = Efficiency Minimum number of workstations where t i = completion time for element i j = number of work elements n = actual number of workstations C a = actual cycle time C d = desired cycle time

18. Copyright 2006 John Wiley & Sons, Inc.7-18 Line Balancing Procedure   Draw and label a precedence diagram   Calculate desired cycle time required for the line   Calculate theoretical minimum number of workstations   Group elements into workstations, recognizing cycle time and precedence constraints   Calculate efficiency of the line   Determine if the theoretical minimum number of workstations or an acceptable efficiency level has been reached. If not, go back to step 4.

19. Copyright 2006 John Wiley & Sons, Inc.7-19 Line Balancing: Example WORK ELEMENTPRECEDENCETIME (MIN) APress out sheet of fruit—0.1 BCut into stripsA0.2 COutline fun shapesA0.4 DRoll up and packageB, C0.3 0.10.20.4 0.3 D B C A

20. Copyright 2006 John Wiley & Sons, Inc.7-20 Line Balancing: Example (cont.) WORK ELEMENTPRECEDENCETIME (MIN) APress out sheet of fruit—0.1 BCut into stripsA0.2 COutline fun shapesA0.4 DRoll up and packageB, C0.3 C d = = = 0.4 minute 40 hours x 60 minutes / hour 6,000 units 2400 6000 N = = = 2.5  3 workstations 1.0 0.4 0.1 + 0.2 + 0.3 + 0.4 0.4

21. Copyright 2006 John Wiley & Sons, Inc.7-21 Line Balancing: Example (cont.) C d = 0.4 N = 2.5 REMAINING WORKSTATIONELEMENTTIMEELEMENTS 1A0.3B, C B0.1C, D 2C0.0D 3D0.1none 0.10.20.4 0.3 D B C A

22. Copyright 2006 John Wiley & Sons, Inc.7-22 A, B C D Work station 1 Work station 2 Work station 3 0.3 minute 0.4 minute 0.3 minute C d = 0.4 N = 2.5 E = = = 0.833 = 83.3% 0.1 + 0.2 + 0.3 + 0.4 3(0.4) 1.0 1.2 Line Balancing: Example (cont.)

23. Copyright 2006 John Wiley & Sons, Inc. Beni Asllani University of Tennessee at Chattanooga Operations Management - 6 th Edition Chapter 7 Supplement Roberta Russell & Bernard W. Taylor, III Operational Decision-Making Tools: Facility Location Models

24. Copyright 2006 John Wiley & Sons, Inc.7-24 Types of Facilities  Heavy-manufacturing facilities large, require a lot of space, and are expensive large, require a lot of space, and are expensive  Light-industry facilities smaller, cleaner plants and usually less costly smaller, cleaner plants and usually less costly  Retail and service facilities smallest and least costly smallest and least costly

25. Copyright 2006 John Wiley & Sons, Inc.7-25 Factors in Heavy Manufacturing Location  Construction costs  Land costs  Raw material and finished goods shipment modes  Proximity to raw materials  Utilities  Labor availability

26. Copyright 2006 John Wiley & Sons, Inc.7-26 Factors in Light Industry Location  Transportation costs  Proximity to markets  Frequency of delivery required by customer  Land costs  Easily accessible geographic region  Education and training capabilities

27. Copyright 2006 John Wiley & Sons, Inc.7-27 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

28. Copyright 2006 John Wiley & Sons, Inc.7-28 Regional Location Factors  Labor (availability, education, cost, and unions)  Proximity of customers  Number of customers  Construction/leasing costs  Land cost  Modes and quality of transportation  Transportation costs  Community government Local business regulations  Government services (e.g., Chamber of Commerce)

29. Copyright 2006 John Wiley & Sons, Inc.7-29 Location Analysis Techniques  Location rating factor  Center-of-gravity  Load-distance

30. Copyright 2006 John Wiley & Sons, Inc.7-30 Location Rating Factor  Identify important factors  Weight factors (0.00 - 1.00)  Subjectively score each factor (0 - 100)  Sum weighted scores

31. Copyright 2006 John Wiley & Sons, Inc.7-31 Location Factor Rating: Example Labor pool and climate Proximity to suppliers Wage rates Community environment Proximity to customers Shipping modes Air service LOCATION FACTOR.30.20.15.15.10.05.05 WEIGHT 801006075658550 Site 1 65919580909265 Site 2 90757280956590 Site 3 SCORES (0 TO 100) Weighted Score for “Labor pool and climate” for Site 1 = (0.30)(80) = 24

32. Copyright 2006 John Wiley & Sons, Inc.7-32 Location Factor Rating 24.00 20.00 9.00 11.25 6.50 4.25 2.50 77.50 Site 1 19.50 18.20 14.25 12.00 9.00 4.60 3.25 80.80 Site 2 27.00 15.00 10.80 12.00 9.50 3.25 4.50 82.05 Site 3 WEIGHTED SCORES Site 3 has the highest factor rating

33. Copyright 2006 John Wiley & Sons, Inc.7-33  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 Center-of-Gravity Technique

34. Copyright 2006 John Wiley & Sons, Inc.7-34 Center-of-Gravity Technique: Example ABCD x200100250500 y200500600300 Wt7510513560 y700 500 600 400 300 200 100 0 x 700500600400300200100 A B C D (135) (105) (75) (60) Miles Miles

35. Copyright 2006 John Wiley & Sons, Inc.7-35 Center-of-Gravity Technique: Example (cont.) x = = = 238 n  WiWi i = 1  xiWixiWi n  n WiWi  yiWiyiWi n y = = = 444 (200)(75) + (500)(105) + (600)(135) + (300)(60) 75 + 105 + 135 + 60 (200)(75) + (100)(105) + (250)(135) + (500)(60) 75 + 105 + 135 + 60

36. Copyright 2006 John Wiley & Sons, Inc.7-36 Center-of-Gravity Technique: Example (cont.) ABCD x200100250500 y200500600300 Wt7510513560 y 700 500 600 400 300 200 100 0 x 700500600400300200100 A B C D (135) (105) (75) (60) Miles Miles Center of gravity (238, 444)

37. Copyright 2006 John Wiley & Sons, Inc.7-37 Load-Distance Technique  Compute (Load x Distance) for each site  Choose site with lowest (Load x Distance)  Distance can be actual or straight-line

38. Copyright 2006 John Wiley & Sons, Inc.7-38 Load-Distance Calculations  l i d i i = 1 n LD = LD = load-distance value l i = load expressed as a weight, number of trips or units being shipped from proposed site and location i d i = distance between proposed site and location i d i = (x i - x) 2 + (y i - y) 2 (x,y) = coordinates of proposed site (x i, y i ) = coordinates of existing facility where,

39. Copyright 2006 John Wiley & Sons, Inc.7-39 Load-Distance: Example Potential Sites SiteXY 1360180 2420450 3250400 Suppliers ABCD X200100250500 Y200500600300 Wt7510513560 Compute distance from each site to each supplier = (200-360) 2 + (200-180) 2 d A = (x A - x 1 ) 2 + (y A - y 1 ) 2 Site 1 = 161.2 = (100-360) 2 + (500-180) 2 d B = (x B - x 1 ) 2 + (y B - y 1 ) 2 = 412.3 d C = 434.2 d D = 184.4

40. Copyright 2006 John Wiley & Sons, Inc.7-40 Load-Distance: Example (cont.) Site 2 d A = 333 d C = 226.7 d B = 323.9 d D = 170 Site 3 d A = 206.2 d C = 200 d B = 180.4 d D = 269.3 Compute load-distance i = 1 n  l i d i LD = Site 1 = (75)(161.2) + (105)(412.3) + (135)(434.2) + (60)(434.4) = 125,063 Site 2 = (75)(333) + (105)(323.9) + (135)(226.7) + (60)(170) = 99,791 Site 3 = (75)(206.2) + (105)(180.3) + (135)(200) + (60)(269.3) = 77,555* * Choose site 3