Chapter 5 Facility Capaci

Facility Capacity & Layout Planning: 

© Oxford University Press 2007. All rights reserved. 1 Facility Capacity & Layout Planning

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© Oxford University Press 2007. All rights reserved. 2 To keep the initial investment in the facility as low as possible to achieve lesser break-even volume Need for Facility Capacity Planning To satisfy the future demand of products without any shortages To find the optimal capacity of the facility so that the total of costs of under-capacity and over-capacity is the minimum Investments in facility capacity are long-term and cannot be reversed easily over the period of time Need for Facility Capacity Planning

Types of Capacity: 

© Oxford University Press 2007. All rights reserved. 3 Types of Capacity Design capacity represents the maximum rate of output that can be achieved under ideal conditions. Effective capacity is the maximum rate of output which can be practically achieved under the constraints of time consumed in set-ups, oiling & cleaning, defective items, etc. Effective capacity is always lesser than the design capacity. Actual capacity is the maximum output rate which is actually achieved under the constraints of machine breakdowns, labor inefficiencies & absenteeism, defective products, late deliveries of materials by the supplier, and so on. Actual capacity can be equal to or less than the effective capacity.

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© Oxford University Press 2007. All rights reserved. 4 Ways of Increasing Effective Capacity Ways of Increasing Effective Capacity Proper facility location, layout, and internal working conditions By making products & services as uniform as possible in design so that number of set-ups required are less (batch sizes will be large) Proper process quality control so that there are less defective items requiring rework Good training, high motivation, less absenteeism & high turnover on part of workers Good coordination with suppliers for timely & defect-free supplies and proper scheduling of products on machines By properly following the environmental and pollution norms, which results in lesser inspections by government enforcement agencies and, thus, lesser disruption of production activities

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© Oxford University Press 2007. All rights reserved. 5 Time Time Time Time Demand forecast Demand forecast Demand forecast Demand forecast Growth trend Decline trend Cyclical trend Stable trend Time Demand forecast Product A Product B Products A & B Trends in Demand Forecasts

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© Oxford University Press 2007. All rights reserved. 6 Output rate Average cost per unit of the product Optimal output rate 0 Output rate 0 Average cost per unit of the product Small-sized Plant Medium-sized Plant Large-sized Plant Part a Part b Optimal Capacity Determination

Layout: 

© Oxford University Press 2007. All rights reserved. 7 Layout The layout of a facility is the physical location of the various department / units of the facility within the premises of the facility. Department may be located on some consideration like less walking distance , logical sequence of processing requirement of the product, or any special requirement of product such as emergency services etc.

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© Oxford University Press 2007. All rights reserved. 8 Entry and exit to the premises also have a critical importance in the layout of planning of facilities.

Types of Layouts: 

© Oxford University Press 2007. All rights reserved. 9 Types of Layouts Product Layout Process Layout Fixed-Position Layout Cellular Layout

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© Oxford University Press 2007. All rights reserved. 10 An Assembly Line (Product Layout) Racks containing steering wheels sub-assembly Is suitable when a product having standard features is to be produced in large volumes. Thus production process involve repetitive task to be performed on items arranged in sequence. The specialized machine and are arranged one after another in the order of sequence required in the production process, such that a production line is formed. This production line is called assembly line. Workstation 1 Workstation 3 Workstation 2 Car 1 Car 3 Car 2 Racks containing headlight sub-assembly Racks containing backlight sub-assembly Conveyor

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© Oxford University Press 2007. All rights reserved. 11 Advantages & Disadvantages of Product Layout Monotonous repetitive tasks lead to frustration on part of workers Product Layout A high output rate and, thus, low cost of item per unit High efficiency of labor & equipment Lesser supervision & labor training costs (as labor is trained only for a specialized task) No need of routing or scheduling once the line is operational (as it is already done during the design of the line) Easier material handling and lesser inventory costs Breakdown of a machine or high absenteeism of workers leads to halt in production Advantages Disadvantages Inflexible to design changes in products or processes (the changes in line are usually expensive) Maintenance cost is fairly high to ensure smooth running of the line

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© Oxford University Press 2007. All rights reserved. 12 1 6 3 2 8 7 4 5 The entry & exit points are nearby A single worker A U-shaped Assembly Line It reduces the walking distance of the worker almost by half. It is Particularly useful when there is a single worker in the line taking care of all the Work station. The closeness of worker allows workers to help a fellow worker .Thus increases team work It reduces material handling as the entry and exit point of the material are nearby. A trolley which bring the raw material may take back the finished goods in a single round.

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© Oxford University Press 2007. All rights reserved. 13 Paint Booth Oil Replacement Final Inspection Engine Repairs Underbody Repairs Car washing & cleaning Interiors, Door Repairs, etc. Electrical Repairs Wheel Alignment Dents Repair Spare Parts Store Office Process Layout of an Automobile Service Station General purpose machine are arranged in no particular sequence ,as The processing requirement and sequence are different for the various type of product. These machine include various machine which handle various processing requirement. This layout is also called machine shop or job shop.Ex MAruti service centre. It is particularly useful when different products are produced in lots or batches.

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© Oxford University Press 2007. All rights reserved. 14 Process Layout A low output rate and, thus, high cost of item per unit Routing & scheduling is tedious and time consuming for different products Work-In-Process (WIP) Inventory is usually high in batch processing High cost of supervision because of special treatment to every product to be processed Material handling is time consuming as no fixed route is there Breakdown of a machine does not lead to halt in production as substitute machines are kept ready for such situations The system promotes creativity on part of workers due to variety of tasks performed by them Disadvantages Advantages The system is flexible to design changes in products or processes in comparison to product layout Maintenance cost is low because of low cost general purpose machines Advantages & Disadvantages of Process Layout

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© Oxford University Press 2007. All rights reserved. 15 Equipments Computer Experts Assemblies Technicians Fuel Raw Materials Schematic Diagram to show Fixed-position Layout of a Space Shuttle In this layout product is very bulky ,heavy and large or has a fixed position. For ex the construction of a building ,dam or a plant ,drilling of crude oil construction of a ship ,rocket. Thus machinery ,equipments, raw material workers etc have to be taken to the site.

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© Oxford University Press 2007. All rights reserved. 16 Lathe Machines Foundry Paint Shop Drilling Machines Fitting shop Welding Shop 111 1 1 1 1 1 1 1 1 1 1 1 1 2 2 2 2222 2222 2222 111 2222 3333 3333 3 3 3 3333 3333 4444 4444 4444 4444 Lathe Fitting Drilling Welding Paint Foundry Lathe Paint Fitting Lathe Fitting Drilling Foundry Welding Drilling Welding 111 111 2222222222 2222 4444 3333 3333333333 444444444444444444444 Cellular Layout Manufacturing Cell 1 Manufacturing Cell 2 Manufacturing Cell 3 Manufacturing Cell 4 Process Layout of a Factory