OPERATIONS

MANAGEMENT

FACILITY LAYOUT

LAYOUT DECISIONS
The objective of layout strategy is to
develop a cost-effective layout that will
meet a firms competitive needs

Layout Design Considerations

Higher utilization of space, equipment, and
people
Improved flow of information, materials, or
people
Improved employee morale and safer working
conditions
Flexibility
Least cost of moving material
Improved customer/client interaction

Types of Layout : Non Manufacturing

1. Office layout
2. Retail layout

3. Warehouse layout

Types of Layout : Manufacturing

4. Fixed-position layout

5. Process-oriented layout
6. Cellular layout

7. Product layout
Hybrid layout

Materials Handling
Minimize the cost of processing, transporting,
and storing materials throughout the
production system.
Materials :
Raw material
Purchased components
Work-in-progress
Finished goods
Packaging material
Maintenance, repair, and operating supplies

Materials Handling
Materials-handling system :
Receives material
Stores material in inventories
Moves material between processing points
Deposits the finished products into vehicles for
delivery to customers

Materials Handling
Material-Handling Principles
Move directly (no zigzagging/backtracking)
Minimize human effort required
Move heavy/bulky items the shortest distances
Minimize number of times same item is moved
MH systems should be flexible
Mobile equipment should carry full loads

Materials Handling
Material-Handling Equipment
Automatic transfer devices
Containers/pallets/hand carts
Conveyors
Cranes
Elevators
Pipelines
Turntables

FIXED POSITION LAYOUT

Activities are carried out at the final location
of the Job
Product does not move out of this location
All materials travel to the job
Build a house
Build a ship in a dry dock
Final assembly of large industrial equipments

FIXED POSITION LAYOUT

Highly specialized resources required to be
brought to work on the product
Difficulty in coordinating with widely dispersed
resources
Lack of efficiency : Prefabricated in Product
layouts
Potential for cost overruns & quality problems

PROCESS LAYOUT
Functional layouts
Equipments are arranged in groups based on
what they do.
Health club , Hospitals , Printing presses
Flexible , Customized product
Functional excellence

PROCESS LAYOUTS

Less cost effective

Slow response time
Identification with the final product
Employees more loyal to dept than product
Focus is on technical Excellence

Process-Oriented Layout
Patient A - broken leg
ER
triage
room

Emergency room admissions

Patient B -

Surgery

erratic heart
pacemaker

Laboratories

Radiology

ER Beds

Pharmacy

Billing/exit

CELLULAR LAYOUTS
Product layouts ( cells ) within a process
layout.
General purpose resources dedicated to a
group of products
Efficiency of product layout without
compromising flexibility
Can handle a variety of products depending
on the number of cells.

HYBRID LAYOUTS
Combination of Product, Process & Cellular
layouts.

Manufacture of components and assembly

PRODUCT LAYOUTS
Activities/Workstations are arranged in
sequence of process need.
Dedicated to one product
Assembly line operations
Automation of production & materials
handling
Ensures maximum utilization of people &
equipment

PRODUCT LAYOUTS
Standardized products, High quality & low cost
Limited or no flexibility
Costly to introduce new products
When alternate products are introduced in
the market, changes will take longer

McDonalds Assembly Line

New Trends in Manufacturing Layouts

Designed for quality

Designed for flexibility new products
Cellular layout within larger process layouts
Automated material handling
More open work areas with fewer walls,
partitions, or other obstacles
Less space provided for storage of inventories
throughout the layout

New Trends in Manufacturing Layouts

More open work areas with fewer walls,
partitions, or other obstacles
Smaller and more compact factory layouts
Less space provided for storage of inventories
throughout the layout

OFFICE LAYOUT
Grouping of workers, their equipment, and
spaces to provide comfort, safety, and
movement of information
Proximity requirement & Movement of
information are major considerations
Typically in state of flux due to frequent
technological changes

OFFICE LAYOUT
Locate Employees requiring frequent contact
close to one another
RELATIONSHIPS :Closeness desired between
various activities or functional areas
SPACE : Amount , kind & shape
ADJUSTMENTS : Activity area in to a layout plan

PROXIMITY QUOTIENT

A Adjacency is Absolutely necessary

E Adjacency is Especially important
I - Adjacency is Important
O Ordinary closeness is OK
U Proximity is Unimportant
X Proximity is Undesirable

PROXIMITY QUOTIENT

RETAIL LAYOUT
Objective is to maximize profitability per square foot of
floor space
Sales and profitability vary directly with customer exposure
Expose customer to high-margin items
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 Proximity quotient

Warehousing and Storage Layouts

Objective : Balance low-cost storage with lowcost material handling
Trade-offs between handling costs and costs
associated with warehouse space
Maximize the total cube of the warehouse
utilize its full volume while maintaining low
material handling costs
Proximity quotient

Warehousing and Storage Layouts

Material Handling Costs
All costs associated with the transaction
Incoming transport
Storage
Finding and moving material
Outgoing transport
Equipment, people, material, supervision, insurance, depreciation

Minimize damage and spoilage

Warehousing and Storage Layouts

All costs associated with the transaction

Incoming transport
Storage
Finding and moving material
Outgoing transport
Equipment, people, material, supervision,
insurance, depreciation
Minimize damage and spoilage

Layout Strategies
Office

Locate workers
requiring frequent
contact close to
one another

Retail

Strategy
Expose customer
to high-margin
items

Warehouse
(storage)

Balance low-cost
storage with lowcost material
handling

Layout Strategies
Project

Job Shop

(fixed position)

(process oriented)

Strategies
Move material to the
limited storage areas
around the site

Manage varied material

flow for each product

Layout Strategies
Work Cells
Repetitive/ Continuous
(product families)
Problems/Issues
Identify a product
family, build teams,
cross train team
members

(product oriented)

Equalize the task time

at each workstation

PLANNING PROCESS LAYOUT

Arrange work centers so as to minimize the
costs of material handling
Basic cost elements are
Number of loads (or people) moving between
centers
Distance loads (or people) move between
centers

Process-Oriented Layout
n

Minimize cost = Xij Cij

i=1 j=1

where

n =
i, j =
Xij =
Cij =

total number of work centers or departments

individual departments
number of loads moved from department i to
department j
cost to move a load between department i and
department j

Process Layout Example

Arrange six departments in a factory to
minimize the material handling costs. Each
department is 20 x 20 feet and the building is
60 feet long and 40 feet wide.

PLANNING PROCESS LAYOUT

1. Construct a from-to matrix

2. Determine the space requirements

3. Develop an initial schematic diagram

4. Determine the cost of this layout

5. Try to improve the layout
6. Prepare a detailed plan

Process Layout
Number of loads per week
Department
Assembly (1)
Painting (2)
Machine Shop (3)
Receiving (4)
Shipping (5)
Testing (6)

Assembly
(1)

Painting
(2)

Machine
Shop (3)

Receiving
(4)

Shipping
(5)

Testing
(6)

50

100

20

30

50

10

20

100

50

0
0

Process Layout Example

Area 1

Area 2

Area 3

40

Area 4

Area 5
60

Area 6

BIGGER PROBLEMS
Computer solutions
- Simulation software
- 3D visualization software

Planning Cellular Manufacturing

Layouts
Cell Formation Decision
Which machines are assigned to manufacturing
cells
Which parts will be produced in each cell

Planning Cellular Manufacturing

Layouts
Parts to be Made in Cells
Demand for the parts must be high enough and
stable enough that moderate batch sizes of the
parts can be produced periodically.
Parts must be capable of being grouped into parts
families.

PRODUCT LAYOUT

Planning Product Layouts

Line Balancing Method
1. Determine the tasks involved in completing 1 unit
2. Determine the order in which tasks must be done
3. Draw a precedence diagram
4. Estimate task times
5. Calculate the cycle time
6. Calculate the minimum number of workstations
7. Use a heuristic to assign tasks to workstations

LINE BALANCING
Heuristic methods, based on simple rules,
have been developed to provide good (not
optimal) solutions to line balancing problems
Heuristic methods include:
Incremental utilization (IU) method
Longest-task-time (LTT) method

Incremental Utilization Method

Add tasks to a workstation in order of task
precedence one at a time until utilization is
100% or is observed to fall
Repeat the procedure at the next
workstation for the remaining tasks

Example: Armstrong Pumps

Armstrong produces bicycle tire pumps on a

production line. The time to perform the 6 tasks
in producing a pump and their immediate
predecessor tasks are shown on the next slide.
Ten pumps per hour must be produced and
45 minutes per hour are productive.
Use the incremental utilization heuristic to
combine the tasks into workstations in order to
minimize idle time.

Example: Armstrong Pumps

Task
A
B
C
D
E
F

Tasks that
Immediately
Precede
-A
-B,C
D
E

Time to
Perform

Task (min.)
5.4
3.2
1.5
2.8
17.1
12.8
Total = 42.8

Network (Precedence) Diagram

CYCLE TIME

= 45/10 = 4.5
minutes per pump

Example: Armstrong Pumps

Minimum Number of Workstations
Minimum
Number of
(Total Task Time)(Demand per Hour)
Workstations

Productive Time per Hour

= [(42.8)(10)]/45 = 9.51 workstations

Incremental Utilization
WS
1
1
1
2
2
2
3
3
4

Tasks
A
A,B
A,B,C
C
C,D
C,D,E
E
E,F
F

Mins./pump
5.4
5.4 + 3.2
8.6 + 1.5
1.5
1.5 + 2.8
4.3 + 17.1
17.1
17.1 + 12.8
12.8

#WSs
5.4/4.5=1.2= 2
8.6/4.5=1.9= 2
10.1/4.5=2.2= 3
1.5/4.5=.33= 1
4.3/4.5=.96= 1
21.4/4.5=4.8= 5
17.1/4.5=3.8= 4
29.9/4.5=6.6= 7
12.8/4.5=2.8= 3

Incr.Util.
60.00%
95.00%
49.80%
33.30%
95.60%
95.10%
95.00%
94.90%
94.80%

UTILIZATION

Minimum Number of Workstations

Utilization =
Actual Number of Workstations
= 9.51/10 = .951 = 95.1%

Rebalancing a Production Line

Changes that can lead to production lines
being out of balance or having
insufficient/excess capacity are:
Changes in demand
Machine modifications
Variations in employee learning and training

ASSIGNMENT
Task
A
B
C
D
E
F
G
H
I

Performance
Time
(minutes)

10
11
5
4
12
3
7
11
3
Total time 66

Task Must Follow

Task Listed
Below

A
B
B
A
C, D
F
E
G, H

Working time 480

minutes/day
Demand : 40 units /Day