layout and location strategy

Unit 3:

Unit 3 LAYOUT AND LOCATION STRATEGY Types of layout Process layout, product layout, fixed position layout – Advantages and disadvantages – cell layouts Line Balancing Factors affecting Location Decisions Methods of evaluating Location alternatives Location consideration in Service/ Retail sectors

LAYOUT STRATEGY:

LAYOUT STRATEGY Layout is one of the strategic area that determine the long term efficiency of operations. What is a Layout? Layout is the physical arrangement of economic activity centre within a facility. Economic activity centre can be anything that consumes space, namely a person, a group of persons, Work station, Bench, Aisle, Stairways, Racks or storage rooms.

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The objective of the layout strategy is to develop an economic layout that will meet the requirement of Product design and volume ( Product strategy ) Process, equipment and capacity ( Process strategy ) Quality of work life ( HR Strategy ) Building and site constraints ( Location strategy )

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A layout specifies the arrangement of machines, the related equipment, the work areas including customer service and storage areas. An effective layout also facilitates the flow of materials and people within and between the work areas. The objective is to arrange the layout so that the system operates at peak effectiveness and efficiency. Layout decision include Placement of machine ( in production ) Office equipment and desks ( in office ) Service centers ( in Hospitals and department stores )

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Types of Layout Process Layout Product Layout Fixed Position Layout Office Layout Retail / Service Layout Warehouse Layout

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PROCESS LAYOUT When positioning strategy requires low volume, high variety production, the layout must be organised around the process. Examples: All drilling equipments are arranged in one area of a machine shop. All budget apparels are kept in one area.

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Advantages: Suitable for unpredictable demand levels Less vulnerable to changes in product mix for a new marketing strategy. Capacity utilization is high – machines are better used Less machines are needed A high degree of flexibility in terms of task allocation to machines exists

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Disadvantages Processing rate is low More time lost in changing from one product to another More space and capital are tied in inventory Diversity in routing results in complex material handling Material Handling cost will be high Throughput time is long

Product Layout :

Product Layout When the positioning strategy requires for repetitive or continuous production, product layout is preferred. Equipments are arranged in a linear path. Equipments are arranged around the product route. There is no sharing of equipments. There are separate equipment for manufacturing each product. Product layout normally requires specialized, capital intensive resources. Not suitable for products with shorter Product life cycle.

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Advantages The flow of product will be smooth and logical in flow lines In process inventory is less Material handling cost is less Faster processing rate Lower inventory Less material handling

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