Slide1: Section Objectives After completing this section, you should be able to: 1. List some of the different reasons for redesign of layouts. 2. Identify the inputs to facility layout decisions. 3. Distinguish between the four basic types of facility layouts. 4. List the primary advantages and limitations of both product and process layout. 5. Develop appropriate process layouts. 6. Solve line balancing problems. 7. Describe new layout approaches.


Slide2: Facility Layout The optimum placement or arrangement of space-consuming components within a productive system. The space-consuming components are: machines materials manpower The benefits of a good layout include: smooth material flow reduced inventories better scheduling effective space utilization fewer production bottlenecks reduced material handling costs


Slide3: Inputs to Facility Layout 1. Output (product / service) design - product or service design affects the layout of a facility. Design issues that have to be considered include: Dimensions / weights of components Perishability / obsolescence Customer interaction requirements 2. Capacity Design - capacity design affects layout by determining the: output rate and output flexibility, and the level of capital intensity 3. Process Design - the way a product or service is produced will influence layout. Design issues include the: Sequence of processing operations for each output Processing equipment required for each operation Floor space requirements for equipment Inventory storage requirements for raw materials, work-in-progress, and finished goods


Slide4: 4. Facility Location - the current site: what flexibility does it have in terms of: Size and configuration Expansion options 5. Job Design - the tasks that constitute work, and the activities necessary to complete the tasks. These influence: Work station operations and output Work station layout 6. Support Services - these are resources that support the primary production functions. They include: Maintenance, supervision, employee facilities Loading docks, storage, aisles, elevators


Slide5: General Classification of Layouts Product (Flow Shop) Layout The physical components are arranged according to the progressive stages by which the product / service is provided. e.g. assembly lines, cafeterias. Layout built around a product that seeks the best personnel and machine utilization through repetitive or continuous production. Process (Job Shop) Layout The physical components are arranged, or grouped, according to the general function they perform, without regard to specific products / services provided. e.g. metal fabricators, hospitals, cafeterias. A layout that deals with low-volume, high-variety production. Fixed-Position Layout The product, because of its bulk or weight, remains in one location. All physical components are moved to the location where the product is being produced. e.g. shipyards, buildings. Layout that address the requirements of stationary projects or large, bulky projects. Group Technology Layout Dissimilar machines are grouped into work centres in order to work on products with similar shapes and processing requirements. e.g. aircraft manufacturing. It is basically a hybrid product / process layout.


Slide6: Job Shop vs. Group Technology Layout L L L L L L M M M M M M G G G G G G D D D D D D Lathe Work Centre Milling machines Drill presses Grinding work centre Work Flow Inputs Work Flow Output G M L D L L D D M L D D L L Work Flow Inputs Work Flow Output Job Shop Group Technology


Slide7: Characteristics of Product and Process Layouts Characteristics Product Layout Process Layout Work Flow Fixed Variable Output Mix Small, standard Variable Output Volume High Moderate / low Inventories: Raw materials High Low Work-in-progress Low High Finished goods High Low Floor Space Utilization High Low Capital Costs High Low Materials Handling Mechanized Labour intensive Output Costs: Fixed costs High Low Direct labour Low High Direct materials Variable High


Innovations at McDonald’s: Innovations at McDonald’s Indoor seating (1950s) Drive-through window (1970s) Adding breakfast to the menu (1980s) Adding play areas (1990s) Three out of the four are layout decisions!


Slide9: Fifth major innovation Sandwiches assembled in order Elimination of some steps, shortening of others No food prepared ahead except patty New bun toasting machine and new bun formulation Repositioning condiment containers Savings of $100,000,000 per year in food costs McDonald’s New Kitchen Layout


Slide10: McDonald’s New Kitchen Layout


Slide11: Objectives for Facility Layouts Objectives for Manufacturing Operation Layouts Provide enough productive capacity Reduce materials-handling costs Conform to site and building constraints Allow space for production machines Allow high labour, machine and space utilization and productivity Provide for volume and product flexibility Provide space for restrooms, cafeterias and other personal-care needs Provide for employee safety and health Allow ease of supervision Allow ease of maintenance Control capital investment


Slide12: Additional Objectives for Warehouse Operation Layouts Promote efficient loading and unloading of shipping vehicles Provide for effective stock picking, order filing and unit loading Allow ease of inventory counts Promote accurate inventory recordkeeping Additional Objectives for Service Operation Layouts Provide for customer comfort and convenience Provide an appealing setting for customers Allow an attractive display of merchandise Reduce travel of personnel or customers Provide for privacy in work areas Promote communication between work areas Provide for stock rotation for shelf life Additional Objectives for Office Operation Layouts Reinforce organization structure Reduce travel of personnel or customers Provide for privacy in work areas Promote communication between work areas Objectives for Facility Layouts - continued


Supermarket Retail Layout: Supermarket Retail Layout Objective is to maximize profitability per square foot of floor space Sales and profitability vary directly with customer exposure Five Helpful Ideas for Supermarket Layout 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 end-aisle locations Convey mission of store through careful positioning of lead-off department


Supermarket Retail Layout: Supermarket Retail Layout


Slide15: Product Layout for a Bread Bakery Milling Mixing Baking Cutting Packaging Raw Material Bread Note the logical sequence of operations


Slide16: Process Layout for a Hospital Admissions General Ward Intensive Care X-Ray Surgery Laboratory Kitchen Emergency Maternity Ward Labour Room Delivery Room Children's Ward


Slide17: Process Layouts: It’s All About Flows Resource Flows of Importance: 1. Manufacturing systems - material flows 2. Administrative offices - personnel flows 3. Hospital flows - patient, staff flows 4. Postal service - customer, mail flows 5. Restaurants - customer, staff flows Advantages of Process Layouts: 1. Systems can handle a variety of processing requirements. 2. System not vulnerable to equipment failure. 3. General-purpose equipment is less costly than the specialized equipment used in product layouts and is easier to maintain. 4. Possible to use individual incentive systems. Disadvantages of Process Layouts: 1. In-process inventory costs are high. 2. Routing and scheduling are difficult.


Slide18: 3. Equipment utilization rates are low. 4. Material handling is slow and inefficient and more costly per unit than under product layouts. 5. Job complexities often reduce the span of supervision and result in higher supervisory costs than product layouts do. 6. Special attention for each product or customer (routing, scheduling, machine setups, and so on) and low volumes result in higher unit costs than with product layouts. 7. Accounting, inventory control and purchasing are much more involved than under product layouts. Designing Process Layouts Main issue in the design of process layouts concerns the relative positioning of the departments involved. Process layouts features: 1. Some departments benefit from adjacent locations. 2. Some departments must be kept separate. 3. External factors such as the location of entrances, loading docks, elevators, windows, and areas of reinforced flooring have to be considered. 4. Flow costs for material and personnel within the building are critical.


Slide19: Steps for Process Layout Step 1: Construct a “from-to-matrix showing the flow of parts or materials from department to department. Step 2: Determine the space requirements for each department. Step 3: Develop an initial schematic diagram showing the sequence of departments through which parts will have to move. Try to place departments with a heavy flow of materials or parts next to one another. Step 4: Determine the cost of this layout by using the following equation: Minimize cost = XijCij where: n = number of work centres or departments i,j = individual departments Xij = number of moves between department i and department j Cij = cost of a move between department i and department j Step 5: Try to improve this layout by trial and error or by use of a computer program. Step 6: Prepare a detailed plan considering space or size requirements of each department.


Slide20: 1 2 3 4 5 6 7 8 175 25 0 30 200 20 25 0 100 75 90 80 90 17 88 125 99 180 20 5 0 25 0 180 187 374 103 7 Flows Between Departments (number of moves) 1 2 3 4 5 6 7 8 1 2 3 4 5 6 7 8 Department Shipping & receiving Plastic molding & stamping Metal forming Sewing department Small toy assembly Large toy assembly Painting Mechanism assembly Activity 1 2 3 5 7 4 6 8 160 ‘ 80 ‘ Step 1 Step 2 40’ 40’ 40’ 40’ 40’ 40’ 40’ 40’ 40’ 40’ 40’ 40’ 40’ 40’ 40’ 40’ Process Layout Illustration - Minimizing Flow Costs for a Toy Company


Slide21: 1 2 3 4 5 6 7 8 175 25 0 60 400 60 75 0 100 150 180 240 270 17 88 125 198 360 20 5 0 50 0 180 187 374 103 7 1 2 3 4 5 6 7 8 Cost Matrix - First Solution Assume flow cost = 1 for adjacent moves Assume flow cost = 2 for moves over 1 dept Assume flow cost = 3 for moves over 2 depts (Assume diagonal moves are possible) Sample Calculations: 1 to 2 = 175 x 1 = 175 1 to 6 = 200 x 2 = 400 1 to 8 = 25 x 3 = 75, etc. Total cost = $3,449 Step 4 Step 3 1 3 5 2 4 6 25 88 200 20 100 5 175 Process Layout Illustration - Minimizing Flow Costs for a Toy Company


Slide22: 4 3 5 7 2 1 6 8 Revised Layout Exchange 1 & 4 Why 1 & 4? You want to bring 1 and 6 next to each other, and this is one way to do it! Costs affected: 1&5, 1&6, 1&7, 1&8, 4&5, 4&6, 4&7, 4&8 1 2 3 4 5 6 7 8 175 50 0 30 200 40 50 0 100 150 180 240 270 17 88 125 198 360 40 10 0 75 0 180 187 374 103 7 1 2 3 4 5 6 7 8 Cost Matrix - Second Solution Cost reductions: 1&5 = 30, 1&6 = 200 1&7 = 20, 1&8 = 25 Cost additions: 4&5 = 20, 4&6 = 5 4&7 = 0, 4&8 = 25 Total cost = $3,234 Step 5 Process Layout Illustration - Minimizing Flow Costs for a Toy Company


Slide23: Small Toy Assembly 5 Mechanism Assembly 8 Shipping and Receiving 1 Large Toy Assembly 6 Metal Forming 3 Plastic Mldg. / Assb. 2 Sewing 4 Painting 7 A final, feasible solution after several iterations Step 6 Process Layout Illustration - Minimizing Flow Costs for a Toy Company


Slide24: Process Layout Illustration - Systematic Layout Planning Even though the approach of minimizing flow costs is widely used, it suffers from the limitation of being able to focus on only one objective, and many situations involve multiple criteria. A more general approach, systematic layout planning (SLP), allows for subjective input from analysts or managers to indicate the relative importance of each combination of department pairs. The following is an example of SLP for the floor of a department store: From Credit dept 2. Toy dept. 3. Wine dept. 4. Camera dept. 5. Candy dept. To 2 3 4 5 I U A U 6 --- 1,6 --- U I A --- 1 1,6 A E 2,3 1 X 1 Area (sq. ft.) 100 400 300 100 100 Letter Number Closeness Rating Reason for Rating


Slide25: Reason Type of customer Ease of supervision Common personnel Contact necessary Share same space Psychology Code 1 2 3 4 5 6 5 2 4 1 3 Initial layout based upon relationship requirements (ignoring space and building constraints) 2 4 3 1 5 20 ft. 50 ft. Final layout adjusted by square footage and building size


Slide26: Product Layout These are layouts used to achieve a smooth and rapid flow of large volumes of products or customers through a system. The main characteristics of product layouts: Standardized products requiring standardized processing Job divided into a series of tasks Specialization of labour and equipment Substantial investment in equipment and in job design Each item follows the same sequence of operations


Slide27: Work flow End Begin Materials and/or labour Materials and/or labour Materials and/or labour Materials and/or labour Product Layout: The Assembly Line OMFloor Animation


Slide28: Main Advantages of Product Layouts 1. High rate of output 2. Low unit costs as fixed costs of specialized equipment spread over many units. 3. Labour specialization reduces training costs and time. 4. High utilization of labour and equipment. 5. Routing and scheduling are included in the initial design of system and do not require much attention once the system is in operation. 6. Accounting, purchasing and inventory control are fairly routine. Primary Disadvantages of Product Layouts 1. Division of labour usually creates dull, repetitive jobs with little opportunity for advancement and may lead to morale problems. 2. System is inflexible in response to changes in volume of output or changes in product or process design. 3. System is susceptible to shutdowns caused by equipment breakdowns or employee absenteeism. 4. Preventative maintenance, the capacity for quick repairs and spare parts inventories are necessary expenses.


Slide29: Steps in Product Layout Step 1: Develop the precedence diagram showing the sequence and performance times for each task. Step 2: Calculate cycle time to meet the output requirement. Take the demand per day and divide it into the productive time available per day (in minutes or seconds). productive time Demand per day or production rate per day Step 3: Determine the theoretical minimum number of workstations. This is the sum of all task times divided by the cycle time. Fractions are rounded to the next higher whole number.  time for task i Cycle time Step 4: Perform the line balance by assign specific assembly tasks to each workstation. An efficient balance is one that will complete the required assembly, follow the specified sequence, and keep the idle time at each workstation to a minimum. Cycle time = Minimum number of workstations =


Slide30: Line-Balancing Heuristics (Rules of Thumb) Rule Meaning


Slide31: The problem: Pproduce 500 Model J Wagons per 8-hour day Setup time and work breaks total 45 minutes Production time available = 480 – 45 = 435 minutes Assembly steps and times for the Model J Wagon are given below: A B C D E F G H I J K Position rear axle support and hand fasten 4 screws to nuts Insert rear axle Tighten rear axle support screws to nuts Position front axle assembly and hand fasten with 4 screws to nuts Tighten front axle assembly screws Position rear wheel #1 and fasten hub cap Position rear wheel #2 and fasten hub cap Position front wheel #1 and fasten hub cap Position front wheel #2 and fasten hub cap Position wagon handle shaft on front axle assembly and fasten bolt and nut Tighten bolt and nut Time Task Task Description 45 11 9 50 15 12 12 12 12 8 9 195 A A,B D A,B,C A,B,C D,E D,E A,B,C,D,E,F,G,H,I J Tasks That Must Precede Assembly Line Balancing Illustration


Slide32: A B C F G D E H I J K Step 1: Draw the precedence diagram 45 11 9 50 15 12 12 12 12 8 9 Assembly Line Balancing Illustration


Slide33: Step 2: Calculate the cycle time Cycle Time = time available / output required = 435 minutes / 500 units = 0.87 minutes = 52.2 seconds Step 3: Calculate the minimum number of workstations Minimum number of work stations = total task time / cycle time = 195 seconds / 52.2 seconds = 3.74 = 4 stations Step 4: Balance the line using the following heuristics (rules of thumb): According to Greatest-Number-of-Following-Tasks rule According to the Longest-Operating-Time rule Assembly Line Balancing Illustration


Slide34: Station 1 Station 2 Station 3 Station 4 Station 5 A D B/E/C/F G/H/I/J K 45 50 11/15/9/12 12/12/12/8 9 7.2 2.2 41.2/26.2/17.2/5.2 40.2/28.2/16.2/8.2 43.2 None None C,E/C,H,I/F,G,H,I/None H,I/I/J/None None C,E/C/F,G,H,I H,I Workstation Task Task Time Idle Time Feasible Remaining Tasks Tasks With Most Followers Step 4: Balancing the line using the Greatest-Number-of-Following-Tasks rule: Assembly Line Balancing Illustration


Slide35: Station 1 Station 2 Station 3 Station 4 D A E/H/I/B C/F/G/J/K 50 45 15/12/12/11 9/12/12/8/9 2.2 7.2 37.2/25.2/13.2/2.2 43.2/31.2/19.2/11.2/3.2 None None H,I,B/I,B/B/None F,G/G/J/K E/H/I/B C/F/G/J/K Workstation Task Task Time Idle Time Feasible Remaining Tasks Tasks With Longest Operating Time Efficiency of the line = total task time / (number of stations * cycle time): Step 4: Balancing the line using the Longest-Operating-Time rule: Efficiency of line balance using the greatest-number-of-following-tasks rule = 195 / (5 x 52.2) = .747 = 74.7% Efficiency of the line using the longest -operating-time rule = 195 / (4 x 52.2) = .934 = 93.4% Assembly Line Balancing Illustration


Slide36: Production Lines: Western vs. Japanese Western 1. Top priority: line balance 2. Strategy: stability - long production runs. Rebalancing seldom occurs 3. Assume fixed labour assignments 4. Use inventory buffers to cushion effect of equipment failure 5. Plan to run at fixed rate:. Send quality problems off line 6. Linear or L-shaped lines 7. Material movement by conveyor is desirable 8. Buy “supermachines” and keep them busy on a continuous basis 9. Applied in labour-intensive final assembly 10. Run mixed models where labour content is similar from model to model Japanese 1. Top priority: flexibility 2. Strategy: flexibility - expect to rebalance often to match output to changing demand 3. Flexible labour: move to current workload 4. Employ maximal preventive maintenance to keep equipment from breaking down 5. Slow for quality problems: speed up when quality is right 6. U-shaped or parallel lines 7. Put stations close together and avoid conveyors 8. Install small machines: add more as needed 9. Applied even to capital-intensive subassembly 10. Strive for mixed-model production, even in subassembly and fabrication


Slide37: Characteristics of Japanese Manufacturing Layouts Chief Objective: Manufacturing flexibility to give the ability to modify production rates quickly and to change to different models. Means of Achieving Objective: 1. Workers trained at many jobs. 2. Large investment in preventative maintenance. 3. Workers encouraged to solve production problems as they arise. 4. Workers and machines shifted as needed to solve production problems. 5. Production lines stopped or slowed when machine breakdowns or quality problems occur. 6. Little inventory carried. 7. Work stations placed close together. Appearance of Layouts: 1. Small manufacturing floor plans. 2. Compact and tightly packed layouts. 3. Large percentage of floor space utilized for production. 4. U-shaped production lines.


Slide38: Process Layout - Additional Illustration # 1 A small printing shop wishes to locate its seven departments in a one-floor building that is 40 units wide and 50 units long. Department sizes are : Department Length (units) Width (units) Layout 10 10 Cutting 20 10 Shipping 10 10 Supply Storage 20 15 Printing 25 20 Binding 20 20 Art 20 20 The average number of loads flowing between departments is expected to be: From Dept Layout Cutting Shipping Supply Storage Painting Binding Art Layout --- --- --- --- --- --- --- Cutting --- --- --- 100 --- 400 --- Shipping --- --- --- 500 --- --- --- Supply Storage --- 600 100 --- 400 100 --- Printing --- --- --- --- --- 1200 100 Binding --- 100 1000 --- 200 --- --- Art --- 100 --- --- 100 --- --- What is your layout recommendation?


Slide39: Process Layout - Additional Illustration # 2 Eight work centres must be arranged in an L-shaped building. The location of centres A and E are designated as shown in the accompanying diagram. Assuming transportation costs are $2 per load per metre, develop a suitable layout that minimizes transportation costs using the information below. From / To A B C D E F G H A -- 40 40 60 120 80 100 110 B -- 60 40 60 140 120 130 C -- 45 85 40 70 90 D -- 40 50 40 45 E -- 90 50 40 F -- 40 60 G -- 60 H -- A * B C D E * F G H From / To A B C D E F G H A -- 10 5 90 365 135 125 0 B 0 -- 140 10 0 35 0 120 C 0 220 -- 110 10 0 0 200 D 0 110 240 -- 10 0 0 170 E 5 40 100 180 -- 10 40 10 F 0 80 40 70 0 -- 10 20 G 0 45 20 50 0 40 -- 20 H 0 0 0 20 0 0 0 -- Loads per day * cannot be moved Distances (metres)


Slide40: Process Layout - Additional Illustration # 3 Hercules Manufacturing, a producer of corrugated cardboard boxes, is planning a 3600 square foot layout. The operations manager has obtained SLP ratings for locating departments next to each other. From / To Storage Corrugator Folder/Gluer Taper/Bailer Inspection Shipping Storage --- AN U U I U Corrugator --- --- I U U X Folder/Gluer --- --- --- AN I U Taper/Bailer --- --- --- --- U I Inspection --- --- --- --- --- AN Shipping --- --- --- --- --- --- AN = Absolutely Necessary I = Important U = Unimportant X = Undesirable Area(sq.ft.) 1200 400 400 400 400 800 What should be the layout used by Hercules Manufacturing?


Slide41: Product Layout - Additional Illustration # 1 Rival Manufacturing Company, a producer of can openers, has to balance its assembly line. Given below are the work elements, their times and their precedence requirements: Work Element Time (sec.) Precedence A 30 -- B 60 A C 70 A D 50 A E 20 A F 40 A,B,C G 50 A,C H 50 A,B,C,D,E,F,G 370 Demand per day is 400 can openers. Working time per day is 8 hours. a. Draw the precedence diagram. b. What is the theoretical number of work stations? c. What is the minimum number of work stations needed to achieve a cycle time of 70 seconds, using the greatest-number-of-following-tasks rule? d. What is the minimum number of stations needed to meet a cycle time of 100 seconds, according to the longest-operating-time rule? e. What are the balance delays in parts (c) and (d) ?


Slide42: Product Layout - Additional Illustration # 2 Able Manufacturing has an opportunity to bid on a contract to produce an electronic assembly. Able could use excess assembly capacity at its main production facility. The contract would require (over two years) of 30,000 units. Able’s engineers suggest an assembly line consisting of nine tasks: Work Element Time (min) Must Follow A 4 G B 6 G C 2 B,D D 5 A,F E 3 D F 4 G G 3 I H 2 C,E I 4 --- Assembly would occur on one shift with average productive time of 7.5 hours per employee daily. There would be twenty-two productive days per month on average. Direct labour costs are $11 per hour; variable overhead is estimated at 10 percent of direct labour; direct materials are $18 per unit; initial tooling for the project is $150,000 and semifixed costs of manufacturing for the assembly line are estimated at $8,000 per month. Able would like a 15 percent margin on selling price for such a contract. Should Able submit a bid and, if so, at what price?