Case: New England Foundry
Abstract
This case study analysis aims to demonstrate the capacity planning and waiting line analysis for
internal services provided in the New England Foundry Inc. (NEFI) who has manufactured the
wood stoves for more than 75 years. The paper presents how the new layout of the factory will
save the time and cost for this factory to manage the increase of the sales and maintain the
quality for fast selling stove Warmglo III.
Old & New Factory Layout Comparison
Old Layout Vs New Layout & Time Saved
The maintenance and Pattern shop Dept. were in one place and comparably far from casting
department that resulted in spending 3 min for people to travel from casting to maintenance &
Pattern Shop Dept. Moreover, having one combined counter with a single waiting line for both
services casting and molding wasted time of both sides the staff setting behind the counter and
the people arrived to get service, as Bob and Pete are providing two different services for two
different needs having two waiting line could have resulted in more efficient services and saved
time of people in line waiting to be served. Service time was 12 min per customer/hour for both
casting and molding people. Separating the Maintenance dept. from the Pattern Shop dept. and
placed the maintenance dept. in the middle of the factory to be closer to the casting dept. which saved 2
min of traveling from casting to maintenance dept from 3 min decreased to 1 min. Moreover, the
molding dept. staff time was used to serve more people from molding dept. and has 1 single line for
molding service only. Service time was more efficient as Bob can serve 1 more casting customer in the
same hour so 6 / hour make service time decrease to 10 min per customer, and Pete can serve 7/ hour
which takes 8.5 per customer/hour.
Total time = travel time+ Ws
Total time saved = 2 + 45 = 47 minutes saved with the new layout
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Comparison Criteria Old Layout New Layout Comparison
Casting Dept. Molding Casting Dept. Molding Dept.
Dept.
Walking duration to Maint. & 3 min 1 min 1 min 1 min 2 min saved from
Patt. shop Dept traveling
Service rate 5 / hour 5 / hour 6 / hour 7 / hour 3 more people
served per hour
Arrival rate 4 / hour 3 / hour 4 / hour 3 / hour
Service line M=1 both departments M=1 only for M=1 only for Reduced waiting
casting molding time
Queue Discipline FIFO
Service time 60/5 = 12 60/5 = 12 60/6 =10 min 60/7 =8.5 min (12-10 )+ (12-8.5 ) =
min min More efficient More efficient 5.5 min saved
System Utilization P Less utilized as they
Considering arrival rate can serve more
remain the same 0.8000 0.6000 0.6667 0.4286
Probability system is P0
empty 0.2000 0.4000 0.3333 0.5714
System being empty in More chances to
minutes 0.2 *60 = 12 0.4 *60 =24 0.33*60 =19.9 0.571*60=34.28 have system empty
Average number in line Lq 3.20 0.90 1.3333 0.3214
Considering the arrival Less number of
rate as number of customer waiting in
customers in line 3.2 * 4 = 12.8 0.9 * 3 = 2.7 1.33 *4= 5.33 0.32 * 3=0.9642 line
Average number in Ls
system 4.0 1.5 2.0 0.750
Considering the service Less number of
rate as number of customers in
customer in line & system waiting &
being served 4 * 5 = 20 1.5 *5 = 7.5 2 * 6 =12 .75 * 7 = 5.25 being served
Average time in line Wq 0.80 0.30 0.33 0.1071
Wq in Decreased waiting
mins 0.8 *60 =48 0.3 *60 =18 0.3 *60 =19.9 0.1 *60 =6.42 time
Average time in system Ws 1.0 0.5 0.5 0.25
Ws in Decreased waiting
mins 1 *60 =60 0.5 *60 =30 0.5 *60 =30 0.25 *60 =15 + service time
Comparison Table
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Cost of Staff involved in Providing Service
Bob was paid $9.5 per hour to serve 5 customers per hour in the old layout,
Considering each person served from casting dept cost $1.9 then casting personnel supposed to
and if each person from molding dept’s serving cost is $2.3 with the same cost instead of paying
a total of $3.322 for customers per hour they can serve more per hour as time and cost saved.
(See Comparison Table)
The cost per min from casting dept. per min= 9.5/60 =0.1583
The cost per min from molding dept. per min = 11.75 /60 = 0.1958
Old layout New layout
Casting Dept. Molding Dept. Casting Dept. Molding Dept.
0.1583 0.19583 0.1583 0.19583
Service Time 12 12 10 8.5
Cost per service 1.9 2.35 1.583 1.664583
Number of customers arrived 1.9 *4 2.35* 3 1.58 * 4 1.664 * 3
Cost for customers/hour 7.6 7.05 6.33 4.99375
7.6 – 6.333=
Difference Casting Old & New 1.266666667
7.05 – 4.99 =
Difference molding Old & New 2.05625
Cost saved for the same nb of
customers in the new layout 3.322916667
The cost saved per hour = 3.322917
Should George go with new Layout?
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George should have made the changes of the layout because of the enhancements the new
layout has made. The new layout has a noticeable impact on the cost and time. It also has the
traits of good layout for both maintenance and pattern shop as it has separate rooms which
increases the capacity and make them utilize the available space efficiently. Having the
maintenance room closure to casting has minimized the movement time and cost, having all
required equipments in one place and make the factory layout as per sequence of operations.
This layout makes the movement in straight line from casting to maintenance and molding to
pattern shop. Moreover, it makes all depart integrated smoothly. And increases accessibility: A
that makes all servicing and maintenance point readily accessible. There are other factors need
to be considered i.e. the cost to make the new layout. Over all, no layout can be ideal, but the best
one which compromise the most of the good layout factors.
It decreases traveling time between casting and maintenance dept.
Increased service rate by 3 customers in total, 1 for casting and 2 for molding
Service time was decreased where their time was used more efficiently to serve more
people
The single line with mixed needs was replaced with single line for casting and single line
for molding
Saved cost of money paid for casting and molding personnel per hour for extra
customers
Decreased time of people waiting in line to be served which consequently decrease the
waiting cost
Increases the ability to meet future increased demands
Over all no layout can be ideal it has to integrate all factors into the best possible
compromise.
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Conclusion
In conclusion the change of the layout made an enhancement to the service provided and
increased the number of people served in total per day for both casting and molding
operations. Bringing the maintenance dept. Close to casting dept. made them near the
customers that met an important criterion of planning service capacity and resulted in
saving travelling time consumed from casting dept to maintenance dept. As the services
can’t be stored decreasing the time waiting in one single line by having two separate lines
one for casting and another for molding accelerated the service time and reduced the
waiting cost.
References
1. Session 5 slides (Capacity Planning)
2. Session 3 slides (Process Design and Facility Layout)
