OPERATIONS

MANAGEMENT
FACILITY LAYOUT

LAYOUT DECISIONS
The objective of layout strategy
is to develop a cost-effective
layout that will meet a firms
competitive needs

Layout Design
Considerations
Higher utilization of space, equipment,
and people
Improved flow of information, materials,
or people
Improved employee morale and safer
working conditions
Flexibility
Least cost of moving material
Improved customer/client interaction

Types of Layout : Non Manufacturing

1. Office layout
2. Retail layout
3. Warehouse layout

Types of Layout : Manufacturing

4. Fixed-position layout
5. Process-oriented layout
6. Cellular layout
7. Product layout
. Hybrid layout

Materials Handling
Minimize the cost of processing,
transporting, and storing materials
throughout the production system.
Materials :

Raw material
Purchased components
Work-in-progress
Finished goods
Packaging material
Maintenance, repair, and operating supplies

Materials Handling
Materials-handling system :
Receives material
Stores material in inventories
Moves material between processing
points
Deposits the finished products into
vehicles for delivery to customers

Materials Handling
Material-Handling Principles
Move directly (no
zigzagging/backtracking)
Minimize human effort required
Move heavy/bulky items the shortest
distances
Minimize number of times same item is
moved
MH systems should be flexible
Mobile equipment should carry full loads

Materials Handling
Material-Handling Equipment
Automatic transfer devices
Containers/pallets/hand carts
Conveyors
Cranes
Elevators
Pipelines
Turntables

FIXED POSITION LAYOUT

Activities are carried out at the final
location of the Job
Product does not move out of this
location
All materials travel to the job
Build a house
Build a ship in a dry dock
Final assembly of large industrial
equipments

FIXED POSITION LAYOUT

Highly specialized resources required to be
brought to work on the product
Difficulty in coordinating with widely
dispersed resources
Lack of efficiency : Prefabricated in Product
layouts
Potential for cost overruns & quality
problems

PROCESS LAYOUT
Functional layouts
Equipments are arranged in groups
based on what they do.
Health club , Hospitals , Printing
presses
Flexible , Customized product
Functional excellence

PROCESS LAYOUTS

Less cost effective

Slow response time
Identification with the final product
Employees more loyal to dept than
product
Focus is on technical Excellence

Process-Oriented Layout
Patient A - broken leg
ER
triage
room

Emergency room admissions

Patient B -erratic
heart
pacemaker

Surgery

Laboratories

Radiology

ER Beds

Pharmacy

Billing/exit

CELLULAR LAYOUTS
Product layouts ( cells ) within a
process layout.
General purpose resources dedicated
to a group of products
Efficiency of product layout without
compromising flexibility
Can handle a variety of products
depending on the number of cells.

HYBRID LAYOUTS
Combination of Product, Process &
Cellular layouts.

Manufacture of components and

assembly

PRODUCT LAYOUTS
Activities/Workstations are arranged
in sequence of process need.
Dedicated to one product
Assembly line operations
Automation of production &
materials handling
Ensures maximum utilization of
people & equipment

PRODUCT LAYOUTS
Standardized products, High quality
& low cost
Limited or no flexibility
Costly to introduce new products
When alternate products are
introduced in the market, changes
will take longer

McDonalds Assembly Line

New Trends in Manufacturing

Layouts
Designed for quality
Designed for flexibility new products
Cellular layout within larger process
layouts
Automated material handling
More open work areas with fewer walls,
partitions, or other obstacles
Less space provided for storage of
inventories throughout the layout

New Trends in Manufacturing

Layouts
More open work areas with fewer
walls, partitions, or other obstacles
Smaller and more compact factory
layouts
Less space provided for storage of
inventories throughout the layout

OFFICE LAYOUT
Grouping of workers, their equipment,
and spaces to provide comfort, safety,
and movement of information
Proximity requirement & Movement of
information are major considerations
Typically in state of flux due to frequent
technological changes

OFFICE LAYOUT
Locate Employees requiring frequent contact close
to one another
RELATIONSHIPS :Closeness desired between
various activities or functional areas
SPACE : Amount , kind & shape
ADJUSTMENTS : Activity area in to a layout
plan

PROXIMITY QUOTIENT
A Adjacency is Absolutely
necessary
E Adjacency is Especially important
I - Adjacency is Important
O Ordinary closeness is OK
U Proximity is Unimportant
X Proximity is Undesirable

PROXIMITY QUOTIENT

RETAIL LAYOUT
Objective is to maximize profitability per square foot of
floor space
Sales and profitability vary directly with customer exposure
Expose customer to high-margin items
Locate high-draw items around the periphery of the store
Use prominent locations for high-impulse and high-margin
items
Distribute power items to both sides of an aisle and
disperse them to increase viewing of other items
Use Proximity quotient

Warehousing and Storage Layouts

Objective : Balance low-cost storage
with low-cost material handling
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
Proximity quotient

Warehousing and Storage

Layouts
Material Handling Costs
All costs associated with the
transaction

Incoming transport
Storage
Finding and moving material
Outgoing transport
Equipment, people, material, supervision, insurance,
depreciation

Minimize damage and spoilage

Warehousing and Storage Layouts

All costs associated with the transaction

Incoming transport
Storage
Finding and moving material
Outgoing transport
Equipment, people, material,
supervision, insurance, depreciation
Minimize damage and spoilage

Layout Strategies
Office

Retail

Warehouse
(storage)

Strategy
Locate workers
requiring frequent
contact close to
one another

Expose customer
to high-margin
items

Balance low-cost
storage with lowcost material
handling

Layout Strategies
Project

Job Shop

(fixed position)

(process oriented)

Strategies
Move material to the
limited storage areas
around the site

Manage varied material

flow for each product

Layout Strategies
Work Cells
Repetitive/ Continuous
(product families)

(product oriented)

Problems/Issues
Identify a product
family, build teams,
cross train team
members

Equalize the task time

at each workstation

PLANNING PROCESS 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

Process-Oriented Layout
n

Minimize cost = Xij

i = 1j = 1
Cij
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

Process Layout Example

Arrange six departments in a factory
to minimize the material handling
costs. Each department is 20 x 20 feet
and the building is 60 feet long and 40
feet wide.

PLANNING PROCESS LAYOUT

1. Construct a from-to matrix
2. Determine the space requirements
3. Develop an initial schematic
diagram
4. Determine the cost of this layout
5. Try to improve the layout
6. Prepare a detailed plan

Process Layout
Number of loads per week
Department Assembly Painting
(1)
(2)
Assembly (1)
Painting (2)
Machine Shop (3)
Receiving (4)
Shipping (5)
Testing (6)

50

Machine Receiving
Shop (3)
(4)

Shipping
(5)

Testing
(6)

100

20

30

50

10

20

100

50

0
0

Process Layout Example

Area 1

Area 2

Area 3

40

Area 4

Area 5
60

Area 6

BIGGER PROBLEMS
Computer solutions
- Simulation software
- 3D visualization software

Planning Cellular Manufacturing

Layouts
Cell Formation Decision
Which machines are assigned to
manufacturing cells
Which parts will be produced in each cell

Planning Cellular Manufacturing

Layouts
Parts to be Made in Cells
Demand for the parts must be high
enough and stable enough that
moderate batch sizes of the parts can
be produced periodically.
Parts must be capable of being grouped
into parts families.

PRODUCT LAYOUT

Planning Product Layouts

Line Balancing Method
1. Determine the tasks involved in completing 1
unit
2. Determine the order in which tasks must be
done
3. Draw a precedence diagram
4. Estimate task times
5. Calculate the cycle time
6. Calculate the minimum number of workstations
7. Use a heuristic to assign tasks to workstations

LINE BALANCING
Heuristic methods, based on simple
rules, have been developed to
provide good (not optimal) solutions
to line balancing problems
Heuristic methods include:
Incremental utilization (IU) method
Longest-task-time (LTT) method

Incremental Utilization
Method
Add tasks to a workstation in order of
task precedence one at a time until
utilization is 100% or is observed to
fall
Repeat the procedure at the next
workstation for the remaining tasks

Example: Armstrong Pumps

Armstrong produces bicycle tire pumps on a

production line. The time to perform the 6
tasks in producing a pump and their immediate
predecessor tasks are shown on the next slide.
Ten pumps per hour must be produced and 45
minutes per hour are productive.
Use the incremental utilization heuristic to
combine the tasks into workstations in order to
minimize idle time.

Example: Armstrong Pumps

Tasks that
Immediately

Time to
Perform

Task
Precede
A -5.4
B A
3.2
C -1.5
D
B,C
ED
17.1
FE
12.8
Total = 42.8

Task (min.)

2.8

Network (Precedence)
Diagram
A

CYCLE TIME

= 45/10 = 4.5
minutes per
pump

Example: Armstrong Pumps

Minimum Number of Workstations
Minimum
Number of
(Total Task Time)(Demand per Hour)
Workstations

Productive Time per Hour

= [(42.8)(10)]/45 = 9.51
workstations

Incremental Utilization

UTILIZATION

Minimum Number of Workstations

Utilization =
Actual Number of Workstations
= 9.51/10 = .951 = 95.1%

Rebalancing a Production
Line
Changes that can lead to production
lines being out of balance or having
insufficient/excess capacity are:
Changes in demand
Machine modifications
Variations in employee learning and
training

ASSIGNMENT
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

Working time 480

minutes/day
Demand : 40 units /Day