PLANT LAYOUT

INTRODUCTION
Location particular place or position
Facility location - place for facility
Facility Layout
A facility layout is an arrangement of everything needed for
production of goods or delivery of services. A facility is an entity that
facilitates the performance of any job. It may be a machine tool, a
work centre, a manufacturing cell, a machine shop, a department, a
warehouse, etc. (Heragu, 1997).
A layout needs a location
INTRODUCTION
Decisions for selection of locations are strategic, long term, and non-
repetitive
Improper choice of a location can lead to operational disadvantages
Location decisions are based on
Technology
Capacity
Financial position
Man power
Internal Factors
Social Structure
Economy
Political
External Factors
INTRODUCTION
Determining the optimal location for one or more new facilities to
serve a set of customers.
Manufacturing facility
Storage facility
Software industry
Services
Location planning may also involve deciding the location of each
specific piece of machinery and equipment in a particular area of a
facility (Tompkins, J. A., et al., Facility Planning, Second Edition ,
John Wiley & Sons, NY, 1996 )
INTRODUCTION
When does a facility location (plant location) decision arise?
When a new facility is to be located
A poor site restricts the facility or plant operations and subsequent
expansions, thereby necessitating setting up the facility at a new site.
Growing volume of a business makes it advisable to establish
additional facilities in new territories.
New economic, social, legal or political factors could suggest a
change of the location of the existing plant.
INTRODUCTION
The reasons for a re-layout are based on 3 types of changes:
Changes in production volumes.
Changes in processes and technology.
Changes in the product.
The frequency of the re-layout will depend on the requirements of the
process.
PLANT LOCATION
Factors affecting the facility location study
Location studies are normally made in two phases:
General territory selection phase
Exact site selection phase
Factors effecting the location (territory) of the plant:
Proximity to source of supply: reduce transportation costs of
perishable or bulky raw materials
Proximity to customers: e.g.: high population areas
PLANT LOCATION
Factors effecting the location (territory) of the plant:
Proximity to labor: local wage rates, attitude toward unions,
availability of special skills (e.g.: Haryana, WB, Karnataka, Gujarat)
Community considerations: local communitys attitude toward the
facility (e.g.: prisons, utility plants, etc.)
Site considerations: local zoning & taxes, access to utilities, etc.
Quality-of-life issues: Climate, cultural attractions, commuting time,
etc.
Other considerations: Options for future expansion, local
competition, etc.
PLANT LOCATION - STEPS
Steps of Location Selection
1. Deciding on Domestic / International location
2. Selection of the region
3. Selection of locality / community
4. Selection of the exact site
Deciding on Domestic / International location
Political stability, export and import quotas, currency exchange
rate, cultural and economic peculiarities, natural and physical
conditions
Selection of Region:
Availability of raw materials
Connectivity
Infrastructure (power, transport)
Suitability of climate
Government policy (competition between states)
PLANT LOCATION - STEPS
Selection of community:
Availability of Labor
Civic amenities for workers
Existence of complementary and competing industries
Finance and research facilities
Availability of water/fire-fighting facility
Local taxes and restrictions
Personal factors
Selection of sites:
Soil, size and topography
Disposal of wastes
Rural, city, suburban sites
PLANT LOCATION - STEPS
Rural site
Cheaper land; Less local taxes; Less wages to labor; Less
trouble from labor
Less facilities; Less skilled workers; Less civic amenities, Poor
transport
City sites
Adequate transportation; Civic facilities; Close to technical and
commercial institutions; Connectivity; Brand value
Expensive land and labor, frequent labor unrest, less space,
government restrictions
Suburban Site - compromise between the city and village site
PLANT LOCATION - PROCEDURE
Evaluation of location alternatives:
Analysis of location alternative should consider both objective factors
such as availability of proper transport facilities, availability of
suitable labor, tax consideration and subjective factors like civic
amenities, weather conditions, etc.
Certain methodology is adopted by professionals to estimate the
appropriate locations of the plant:
Factor rating methods
Location Break-even analysis
Qualitative Factor Analysis Method
PLANT LOCATION - PROCEDURE
Factor rating methods
Managers use weightings to make the decisions process
Location Break-even analysis
Location to have comparison at a glance (fixed costs, variable
costs, outputs are calculated)
Qualitative Factor Analysis Method
Consider intangible factors in additions to costs factors. Intangible
factors which cannot be measured quantitatively can be expressed
as significant, good, and bad. The total contributions of intangibles
for each location are evaluated.
PLANT LOCATION - PROCEDURE
Factor rating method:
1. Selection of factors - (e.g., raw material, market, cost, community, and
transportation
2. First preference - Provide the weights to each factor (e.g. 10 points to
market and raw material, 8 points to land, 7 points to community, and 6
points to transportation)
3. Rate each alternative for each factor on a scale of 1-10
4. Tabulate all the above information
5. Repeat the same procedure (step 3 and 4) for other factors
6. Multiply the weights of each factor with the rating of each alternative
and record on the lower half of the rectangle under each alternative
7. Add the score of each alternative and record in front of Total
8. The best alternative is that alternative which has the maximum score. In
case of a Tie, then those alternatives should be selected and a separate
evaluation should be made for those alternatives only.
PLANT LOCATION - PROCEDURE
Factor rating method:
Factor Weights Location A Location B Location C
Raw material 10 8 80 7 70 8 80
Market 10 9 90 8 80 7 70
Land 8 7 56 9 72 8 64
Community 7 9 63 8 56 9 63
Transportation 6 9 54 9 54 8 48
Total 343 332 325
Best alternative is location A
Scale of 1-10
10 Maximum Priority
1 Minimum Priority
PLANT LOCATION - PROCEDURE
Location Break-even analysis
PLANT LOCATION - PROCEDURE
Transportation method:
A
B
P
Q
R
S
T
Retailers
Plant Locations Distributers
P Q R S T Capacity
X Rs.30 Rs.25 Rs.35 Rs.34 Rs.41 1000
Y Rs.32 Rs.28 Rs.32 Rs.42 Rs.40 1000
Demand 500 700 300 400 600 2000/2500
QUESTION BOWL
Criteria that influences manufacturing plant and warehouse
location planning can include which of the following?
a. Proximity to customers
b. Business climate
c. Infrastructure
d. Quality of labor
e. All of the above
Answer: e. All of the above
QUESTION BOWL
Criteria that influences manufacturing plant and warehouse
location planning can include which of the following?
a. Political risk
b. Government barriers
c. Environmental regulation
d. All of the above
e. None of the above
Answer: d. All of the above
QUESTION BOWL
The location decision for service facilities is closely tied to
which of the following?
a. Market selection decision
b. Material costs
c. Nearness to distributors
d. Nearness to high-skilled labor
e. None of the above
Answer: a. Market selection decision
Facility
Planning
Structural Design
Facility Location Facility Design
Material Handling
Layout
PLANT LAYOUT
Plant layout planning - decisions regarding the physical allocation of
the economic activity centers in a facility
An economic activity center is any entity occupying space
Effective work flow at the facility (productivity of men and
machinery)
A plant layout study is an engineering study used to analyze different
physical configurations for an manufacturing plant
Important to take into account the business, strategic and tactical
objectives, e.g.: space/cost per m
2
in malls; accessibility/privacy in
offices
PLANT LAYOUT
!! !!
1
2,7,14
3,9,16,22
11,24
5,12,18,21
7,13,19
6,15
4,10,17
8
20,23
PLANT LAYOUT
Bad layout:
Congestion and poor utilization of space
Excessive stock in process at the facility
Long distances in the work flow process
Simultaneous bottle necks and workstations with idle time
Qualified workers do ---------- too many simple operations
Labor anxiety and discomfort
Accidents at the facility
Difficulty in controlling operations and personnel
PLANT LAYOUT
The plant layout process starts at an aggregate level, taking into
account the different functions (original configuration may be
changed through a feedback process).
Layouts are designed for the initial conditions of the business
Re-layout is necessary to adapt for internal and external changes
Phase IV Phase III Phase II Phase I
TIME
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PLANT LAYOUT
Key questions for decision about layout planning
Which facilities to consider?
How much space and capacity is required for each facility?
Space quantity, shape and the elements of the facility
Less space, productivity may be reduced
More space (if expensive), reduce productivity
Where should each element be located within the facility?
The allocation of the different element may affect productivity
PLANT LAYOUT- OBJECTIVES
High productivity and safe for the personnel
Minimum movement of men, material and resources.
Sense of Unity - the feeling of being a unit pursuing the same
objective.
Safety - in the movement of materials and personnel work flow.
Flexibility - in designing the plant layout taking into account the
changes over short and medium terms in the production process
and manufacturing volumes.
PLANT LAYOUT- OBJECTIVES
HOW?
Congestion reduction
Elimination of unnecessary occupied areas
Reduction of administrative and indirect work
Improvement on control and supervision
Flexibility
Productive workforce, equipment and services
Minimization of material handling activities and WIP
Better quality control
Better safety for workers
High moral and satisfaction of employees.
Reduction on delays and manufacturing time
All these factors will not be reached simultaneously
Best solution will be a balance
PLANT LAYOUT-FACTORS
PQRST QUESTIONS
Product: What is to be produced
Quantity: How much to be produced
Routing: How it is to be produced
Support services: With what will we produce + Maintenance
Timing/Transport: when to produce and how to move parts in/out
PLANT LAYOUT-FACTORS
Materials
Machinery
Men
Material Handling
Waiting Time
Auxiliary Services
Building
Future Changes
The 3 M => Money
PLANT LAYOUT-FACTORS
Materials
Layout depends on product
Product depends on materials
Materials define
Manufacturing methods
Storage
Material handling equipment's
Variety
Quantity
Size, shape, volume, weight, and the physical-chemical
characteristics
PLANT LAYOUT-FACTORS
Machinery
Layout depends on process
Process defines
Type of machinery (quantity)
Type of tools (quantity)
Type of equipment (quantity)
Route sheets
Engagement of machinery
Requirements for space, shape, height, weight
Requirements for type of workers (physical attributes)
Requirements for risk management
Requirements of auxiliary services, etc.
PLANT LAYOUT-FACTORS
Men (Labor)
Layout depends on skill of labor
Direct labor, supervision and auxiliary services
Qualifications, flexibility, number of workers
Requirement for employees safety and efficiency (illumination,
ventilation, temperature, noise, etc.)
Material Handling
No value but waste
Minimize material handling as well as combining with other
operations when possible, eliminating unnecessary and costly
movements
PLANT LAYOUT-FACTORS
Waiting time - Stock
Continuous material flow through the facility
Lower waiting time cost
Inventory management (requires space) - provides safety to protect
production, improving customer service etc.
Auxiliary Services
Supports the main production activities at the plant:
Safety: Accessibility paths, fire protection, lavatories, training,
etc.
Material: Quality control (incoming and outgoing)
Equipment: Maintenance (electrical, drainage, water lines)
Requires around 30% of the space at a facility.
Space for auxiliary services is non-productive!!!
Minimize indirect cost - efficient services
PLANT LAYOUT-FACTORS
The building
Biggest Constraint for future changes
Capacity enhancement
Variety in production
Change in process
Future changes
Plant layout requires flexibility.
Long term layout (may be expensive for short run)
Initial layout kept free from fixed characteristics
Possible future extensions must be taken into account, as well
as the feasibility of production during re-layout
PLANT LAYOUT- TYPES
Var-Vol Analysis
PLANT LAYOUT- TYPES
The production process normally determines the type of plant layout to
be applied to the facility:
Fixed position plant layout (Fixed product layout, Static layout)
Product stays and resources move to it.
Product oriented plant layout (Product layout, Flow shop)
Machinery and Materials are placed following the product path.
Process oriented plant layout (FunctionalSIMILAR FUNCTIONS).
Machinery is placed according to what they do and materials go
to them.
Cell Layout (Combined Layout, Group Technology Layout)
Hybrid Layout that tries to take advantage of different layouts
types.
FIXED PRODUCT LAYOUT
Men, machines, tools move towards product (heavy & stationary),
e.g. Locomotives, Ship building, Satellites, Aircraft, Construction.
Advantage:
Men and machines can be used for a wide variety of operations
Investment on layout is small
Disadvantages:
Costly and high precisions tooling involved
Skilled labor is required
Storage Warehouse PRODUCT
Lathe Press Grind
Paint Assembly
PRODUCT LAYOUT
Serialized manufacturing - arrangement of machinery in one line
based on sequence of operations
Raw materials enter at one side and get processed along the line, and
the finished product leaves the system at the other end
Standardized products on a mass scale such as chemical, paper, sugar,
rubber, refineries and cement industries
Storage Warehouse
Lathe Press
Paint Assembly
Grind Drill
Press Grind
Grind Drill
Lathe Drill Grind Drill
PRODUCT LAYOUT
Advantages:
Reduced material handling activities
Work in process almost eliminated
Minimum manufacturing time
Simplification of the production planning and control systems
Tasks simplification
Disadvantages:
No flexibility in the production process
Low flexibility in the manufacturing times
High capital investment
Every workstation is critical to the process - The lack of personnel
or shut down of a machine stops the whole process.
PROCESS LAYOUT
Process layouts are found primarily in job shops, or firms that produce
customized, low-volume products that may require different
processing requirements and sequences of operations (wide variation
in products - job order production and non-repetitive kind of
manufacturing and maintenance activities)
Process layouts are facility configurations in which operations of a
similar nature or function are grouped together, e.g. machine shop
with separate departments (milling, grinding, drilling, hydraulic
presses, and lathes)
Provides flexibility needed to handle a variety of routes and process
requirements
Services that utilize process layouts include hospitals, banks, auto
repair, libraries, and universities
PROCESS LAYOUT
Process (Functional) Layout
Similar resources placed together
T T T CG CG
T T T SG SG
M M
D D D
M M
D D D
PROCESS LAYOUT
Process (Functional) Layout
Similar resources placed together
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 A A
Receiving and
Shipping
Assembly
Painting Department
Lathe Department
Milling
Department Drilling Department
Grinding
Department
P
P
PROCESS LAYOUT
Process layout is useful when the production process is organized in
batches
Personnel and equipment to perform the same function are allocated
in the same area
The variations in the production volumes from one period to the next
one (short periods of time) may lead to modifications in the
manufactured quantities as well as the types of products to be
produced.
Advantages:
Best use of specialization of machines & employees
Flexible variety of products
General purpose machines less costly
PROCESS LAYOUT
Advantages:
Ability to follow diverse paths
Less vulnerable to shutdowns
Machine breakdown less of problem
Suitable for incentive pay
Disadvantages:
General purpose machines are slow
Work routing, scheduling difficult
Material handling costs high
Material moves slowly
Partially finished inventory high large storage space
Communication difficult
Some limit to size of parts
CELL LAYOUT
Work cells
Group of equipment and workers that perform a sequence of
operations over multiple units of an item or family of items
Combine elements of both product & process layouts
Product oriented layout: Efficiency
Process oriented layout: Flexibility
Most popular hybrid layouts uses Group Technology (GT) &
a cellular layout
Group Technology
Grouping outputs with the same characteristics to families, and
assigning groups of machines and workers for the production of
each family
CELL LAYOUT
Group (Cellular) Layout
Resources to produce similar
products placed together
T T T
M
M M T
M
SG CG CG
SG
D D
D
D
Cluster
or cell
Cluster
or cell
CELL LAYOUT
Steps
Select product families.
Determine work cells.
Detail the work cells internal organization or layout.
Regarding product grouping to be produced at the same work cell, we
need to determine which is the condition that allows such grouping.
Once product families are determined, create a work cell for each
family.
CELL LAYOUT
Sometimes, outputs will be final products or services; some other
times, they will need to integrate to a final product.
In this case, the work cells would need to be located close to the
main production line, to facilitate the assembly of the component at
the moment and place required.
PLANT LAYOUT - STEPS
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.
PLANT LAYOUT - STEPS
5. Generate alternative facility plans:
Including alternative facility locations and alternative designs
for the facility.
6. Evaluate alternative facility plans:
Determine the important factors. For each candidate plan,
evaluate if and how those factors will affect the facility and its
operations.
7. Select a facility plan:
Cost may not be the only major consideration.
Use the information in step 6 to determine a plan
PLANT LAYOUT - STEPS
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.
PLANT BUILDING
Checklist - - - - - - - - Factors in designing a Factory:
Adaptability
Expandability
Product and equipment
Employees facilities and services areas
Material handling
Lighting, ventilation and air-conditioning
Fire protection
Security and services and maintenance
PLANT BUILDING
Building Types:
Single-storey buildings
High-bay and monitor types
Multi-storey buildings
Special types
PLANT BUILDING
Single storey building: sub-urban areas
Greater flexibility in layout and production routing
Lesser space wastage for auxiliary units (elevators, service facilities)
Lesser vibrations
Economical (const., transport, maintenance)
Easy expansion
Lesser safety requirements (fire etc.)
Better supervisory control
High cost of land, particularly in the city
High cost of heating, ventilating etc
High cost of transportation for moving labor and raw material from/to
factory
PLANT BUILDING
High bay and monitor types:
Single storey structure with roof often more than 10 meters
Maximum overhead space (crane, overhead facilities, natural
ventilation and lighting)
PLANT BUILDING
Multi-storey building:
Best for services (hotels, schools, colleges, shopping complexes)
Not preferred for manufacturing plants
Preferred only for locations with excessive land cost
Preferred for light manufacturing industry
Maximum operating floor space per sq. ft. of land
Lower cost of heating and ventilation
Advantage of gravity flow (reduces material handling)
Complicated materials handling
High space wastage for auxiliary units (elevators, service facilities)
Less floor load-bearing capacity
Heavy construction cost
Less flexibility in terms of layout
Poor supervision and control
PLANT BUILDING
Special building
Special purpose buildings
Inflexible
High Obsolescence
Aircraft industry wide spans (300 400 ft)
Saw mills no side walls
MATERIAL HANDLING
Material handling is an activity that uses the right method to provide
the right amount of the right material at the right place, at the right
time, in the right sequence, in the right position and at the right cost
Material Handling a essential waste (20-70% of product cost)
Material handling work {product of material handling flow (volume,
weight or number per unit of time) and distance moved} should be
minimized without sacrificing productivity or the level of service
required of the operation.
Material Handling
The loading, moving, and unloading of materials
The hundreds of different ways of handling materials are
generally classified according to the type of equipment
used
Conveyor
Cranes, elevators, and hoists
Industrial vehicles
Motor vehicles
Railroad car
Marine carriers
Aircraft
Containers
Material Handling
Materials Handling machines can be grouped into 4 broad
categories
1. Bulk Handling Machines
2. Elevating Machines
3. Hoisting Machine
4. Monorail
Material Handling
Bulk Handling Machines
Material Handling
Elevating Machines
Material Handling
Hoisting Machines
Material Handling
Monorail
Monorails operate over fixed paths rather
than over limited areas
Material Handling
MATERIAL HANDLING - PRINCIPLES
1. Planning (prescribed course of action that is defined in advance of
implementation)
Defines
What to move (material)
When and Where (moves)
How and Who (method)
Rigorous analysis of system relationships prior to preliminary
planning in order to identify existing methods, problems, constraints,
and to establish future requirements and goals.
Establishment of a plan to include basic requirements, options, and
the considerations of contingencies for all material handling and
storage activities
MATERIAL HANDLING - PRINCIPLES
2. Standardization (less variety and customization in equipment)
Standardize handling methods and equipment
Standardization applies to sizes of containers and other load forming
components as well as operating procedures and equipment.
Material handling methods, equipment, controls and software should
be standardized within the limits of achieving overall performance
objectives and without sacrificing needed flexibility and throughput.
MATERIAL HANDLING - PRINCIPLES
3. Work
Work should be minimized without sacrificing productivity or
the level of service required
Simplifying processes by reducing, combining, shortening or
eliminating unnecessary moves will reduce work.
Consider each pickup and set-down (or placing material in and out),
as distinct moves
Operation sequences and equipment layouts should be prepared to
minimize work
Gravity should be used to move materials
The shortest distance between two points is a straight line.
MATERIAL HANDLING - PRINCIPLES
4. Ergonomics (study of human factor)
Human capabilities and limitations must be recognized and
respected in the design of material handling tasks and equipment to
ensure safe and effective operations.
Equipment should be selected that eliminates repetitive and strenuous
manual labor.
The material handling workplace and the equipment employed to assist
in that work must be designed so they are safe for people.
MATERIAL HANDLING - PRINCIPLES
5. Unit Load
Handle product in as large a unit load as practical (less effort).
Load size and composition may change as material and product
moves through stages of manufacturing and the resulting
distribution channels.
Large unit loads are common both pre and post manufacturing in the
form of raw materials and finished goods.
Smaller unit loads (less in-process inventory) are consistent with
manufacturing strategies that embrace operating objectives such as
flexibility, continuous flow and just-in-time delivery.
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.
MATERIAL HANDLING - PRINCIPLES
6. Space Utilization
Make effective utilization of all cubic space (Space is 3D)
In work areas, cluttered and unorganized spaces and blocked aisles
should be eliminated.
In storage areas, the objective of maximizing storage density must be
balanced against accessibility and selectivity.
When transporting loads within a facility the use of overhead space
should be considered as an option.
MATERIAL HANDLING - PRINCIPLES
7. Systems (Collection of interacting and/or interdependent entities)
Coordination of operations (receiving, inspection, storage,
production, assembly, packaging, warehousing, shipping by
integration of handling and storage activities.
It should encompass the entire supply chain (suppliers,
manufacturers, distributors and customers).
Minimum Inventory levels at all stages of production and
distribution while respecting considerations of process
variability and customer service.
Information flow and physical material flow should be integrated
and treated as concurrent activities.
Customer requirements and expectations regarding quantity,
quality, and on-time delivery should be met without exception.
MATERIAL HANDLING - PRINCIPLES
8. Automation (Application of electro-mechanical devices, electronics and computer-
based systems to operate and control production and service activities)
Mechanize the handling process to increase efficiency and economy
Linking of multiple mechanical operations to create a system that can
be controlled by programmed instructions.
Improve operational efficiency, improve consistency and predictability,
decrease operating costs and to eliminate repetitive or potentially unsafe
manual labor.
Computerized material handling systems should be considered effective
integration of material flow and information management.
MATERIAL HANDLING - PRINCIPLES
9. Environment or Ecology (save natural resources and to predict and
eliminate the environmentally negative effects of process)
Environmental and Energy
Packing material should be reusable/bio-degradable.
Systems design should accommodate the handling of empty containers
and other by-products of material handling.
Hazardous materials need special attention with regard to spill
protection, combustibility and other risks.
Energy consumption of material handling equipments
MATERIAL HANDLING - PRINCIPLES
10. Life Cycle Cost (cash flows that will occur between initial investment
and the time when equipment is totally replaced)
MATERIAL HANDLING - PRINCIPLES
10. Life Cycle Cost (cash flows that will occur between initial investment
and the time when equipment is totally replaced)
Life cycle costs include capital investment, installation, training,
testing and acceptance, operating (labor, utilities, etc.), maintenance
and repair, reuse value, and ultimate disposal.
Preventive and predictive maintenance plan should be prepared for
the equipment
A long-term replacement plan for the equipment when it may becomes
obsolete should be prepared.
MATERIAL HANDLING - PRINCIPLES
In a Nut Shell
Eliminate unnecessary handling
Minimize manual handling & use mechanical handling equipment
where possible
Use the right equipment for handling so as to avoid damage & to
reduce cost
Handle materials in the largest convenient unit load by the quickest
means over the shortest route
Make full use of the equipment