The Strategic Facility Layout Problem in Industry

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This presentation presents a major problem and solution. Many companies have industrial engineers designing facility layouts in AutoCAD, but they don't have facility layout analysis tools.

Therefore, facility layout IEs become AutoCAD drafters instead of engineers. Layout issues are hidden, and poor layouts are constructed.

This applies to all countries, not only the Philippines.

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The Strategic Facility Layout Problem in Industry

  1. 1. Addressing the Strategic Facility LayoutProblem within SEIPI Member CompaniesRobin OwensManaging Director, Proplanner AsiaPSCECE 2012: Philippine Semiconductor andElectronics Convention and Exhibition22nd ASEMEP National Technical Symposium / ANTSJune 6-8, 2012
  2. 2. How many hundreds of millions of PHPdoes your company have invested in its facilities(production equipment, warehouses, offices, etc.)?The Strategic Facility Layout ProblemBarrier to More Productive SEIPI Facilities
  3. 3. How many hundreds of millions of PHPdoes your company have invested in its facilities(production equipment, warehouses, offices, etc.)?How does your company ensure that thephysical arrangement of the facilitiesincreases operational productivity?The Strategic Facility Layout ProblemBarrier to More Productive SEIPI Facilities
  4. 4. • Process & Industrial EngineeringSoftware & Services• Formed in 2002• USA Headquarters• Iowa State University Research Park• Branched off from EDS PLM Solutions• President: Dr. Dave Sly• BSIE, MSIE, MBA, PhD IE• Adjunct Professor – Iowa State• Software Tools• Facility Layout Analysis• Time & Motion Study• Assembly Line Balancing• Process Planning• Work Instructions – Static• Work Instructions – Dynamic Shop Floor• Electronic Kanban / KittingProplannerBackgroundMap of Proplanner Customers
  5. 5. • BSIE, MMM, MBA• Penn State University• Industrial Engineer• American Express• Empire Industries• Boeing• IE Consultant• Engineering Animation Inc.• Japan, Korea, Malaysia, USA• Amkor Technology• Philippines, Taiwan, China, USA• Manufacturing Manager• Amkor Philippines Test• Intel Wafer Fab• Smiths Medical• Adjunct Professor• Mapua Institute of Technology“Advancing Facility Planning”Published Article – November 2011Industrial Engineer MagazineRobin OwensBackground
  6. 6. SEIPI company leased new facility in Laguna,and needed to relocate a camera chip assembly operation there.The Strategic Facility Layout ProblemBarrier to More Productive SEIPI Facilities
  7. 7. A facility layout team (led by IE) created 3 differentfacility layout drawings for management selection.Layout Option 2 Layout Option 3Layout Option 1The Strategic Facility Layout ProblemBarrier to More Productive SEIPI Facilities
  8. 8. Which one is the best, and should be implemented?Layout Option 2 Layout Option 3Layout Option 1The Strategic Facility Layout ProblemBarrier to More Productive SEIPI Facilities
  9. 9. KEY POINT: If you don’t measure the facility layouts,then you have no basis for comparison and selection.Layout Option 2 Layout Option 3Layout Option 1The Strategic Facility Layout ProblemBarrier to More Productive SEIPI Facilities
  10. 10. The Strategic Facility Layout ProblemBarrier to More Productive SEIPI FacilitiesLayout Option 2KEY POINT: If you don’t measure the facility layouts,then you have no basis for comparison and selection.Layout Option 3Layout Option 1
  11. 11. One PHL semiconductor outsourcing manufacturerspent P1.2 billion on factory, office, and warehouse layout changes(over a period of 5 years),without the use of industrial engineering toolsto measure and compare facility layout alternatives.The Strategic Facility Layout ProblemBarrier to More Productive SEIPI Facilities
  12. 12. One PHL semiconductor outsourcing manufacturerspent P1.2 billion on factory, office, and warehouse layout changes(over a period of 5 years),without the use of industrial engineering toolsto measure and compare facility layout alternatives.This is the normal practice forall SEIPI member companiesThe Strategic Facility Layout ProblemBarrier to More Productive SEIPI Facilities
  13. 13. The Strategic Facility Layout ProblemBarrier to More Productive SEIPI FacilitiesOne PHL semiconductor outsourcing manufacturerspent P1.2 billion on factory, office, and warehouse layout changes(over a period of 5 years),without the use of industrial engineering toolsto measure and compare facility layout alternatives.This is the normal practice forall SEIPI member companiesThink of how much more productiveSEIPI companies could beif we used IE analysis toolsto improve facility layouts.
  14. 14. Why don’t SEIPI Industrial Engineers use softwareto analyze and improve facility layouts?The Strategic Facility Layout ProblemBarrier to More Productive SEIPI Facilities
  15. 15. Why don’t SEIPI Industrial Engineers use softwareto analyze and improve facility layouts?There are multiple reasons.But, the key reason and root cause is thelack of discussion of modern facility layout technologyin facility layout textbooks.These textbooks focus on impractical algorithmsthat are unused in industry.The Strategic Facility Layout ProblemBarrier to More Productive SEIPI Facilities
  16. 16. • In the Philippines, most often, FacilityLayout IEs own the facility layoutdrawings. Most layout drawings are inAutoCAD.• There are no IE analysis tools inside ofbasic AutoCAD. AutoCAD is simply adrafting / drawing tool.The Strategic Facility Layout ProblemFacility Layout Practice in Industry
  17. 17. • In the Philippines, most often, FacilityLayout IEs own the facility layoutdrawings. Most layout drawings are inAutoCAD.• There are no IE analysis tools inside ofbasic AutoCAD. AutoCAD is simply adrafting / drawing tool.• Without using industrial engineering software, facility layouts are designed(and billions of PHP spent) without measurement or IE analysis.• Because of the perceived lack of layout engineering technologyavailable, facility layout IEs find themselves acting as AutoCAD drafters,instead of industrial engineers.The Strategic Facility Layout ProblemFacility Layout Practice in Industry
  18. 18. The Strategic Facility Layout ProblemFacility Layout Practice in Industry• In the Philippines, most often, facilityLayout IEs own the facility layoutdrawings. Most layout drawings are inAutoCAD.• There are no IE analysis tools inside ofbasic AutoCAD. AutoCAD is simply adrafting / drawing tool.• Without using industrial engineering software, facility layouts are designed(and billions of PHP spent) without measurement or IE analysis.• Because of the perceived lack of layout engineering technologyavailable, facility layout IEs find themselves acting as AutoCAD drafters,instead of industrial engineers.Facility Layout IEs becomeAutoCAD drafters, instead of engineers.The result is that layout issues are hidden,and inferior, inefficient facility layouts areapproved and constructed.
  19. 19. MovementMethodsProduct&PartQuantitiesMaterialMovement(from-to)Data to HelpDetermineTrip DistanceData to HelpDetermineTrip Cost & TimeThe Strategic Facility Layout ProblemFacility Layout Practice in Industry – Useful Tools
  20. 20. The Strategic Facility Layout ProblemFacility Layout Practice in Industry – Useful Tools
  21. 21. The Strategic Facility Layout ProblemFacility Layout Practice in Industry – Useful ToolsIs this a good SBGAAssembly layout?How do you know?
  22. 22. The Strategic Facility Layout ProblemFacility Layout Practice in Industry – Useful Tools
  23. 23. The Strategic Facility Layout ProblemFacility Layout Practice in Industry – Useful Tools
  24. 24. The Strategic Facility Layout ProblemFacility Layout Practice in Industry – Useful Tools
  25. 25. EngineeringResultsManagementResultsThe Strategic Facility Layout ProblemFacility Layout Practice in Industry – Useful Tools
  26. 26. The Strategic Facility Layout ProblemFacility Layout Practice in Industry – Useful Tools
  27. 27. The Strategic Facility Layout ProblemFacility Layout Practice in Industry – Useful Tools
  28. 28. The Strategic Facility Layout ProblemFacility Layout Practice in Industry – Useful Tools
  29. 29. The Strategic Facility Layout ProblemFacility Layout Practice in Industry – Useful Tools
  30. 30. The Strategic Facility Layout ProblemFacility Layout Practice in Industry – Useful Tools
  31. 31. The Strategic Facility Layout ProblemFacility Layout Practice in Industry – Useful Tools
  32. 32. The Strategic Facility Layout ProblemFacility Layout Practice in Industry – Useful ToolsFast & Easy Wafer Bump Layout Results12% reduction in Distance Traveled3% reduction in Material Handling Cost3% Reduction in Material Handling Time
  33. 33. The Strategic Facility Layout ProblemFacility Layout Practice in Industry – Useful ToolsClass 100,000Class 10
  34. 34. The Strategic Facility Layout ProblemFacility Layout Practice in Industry – Useful ToolsClass 100,000Class 10
  35. 35. The Strategic Facility Layout ProblemFacility Layout Practice in Industry – Useful Tools
  36. 36. The Strategic Facility Layout ProblemFacility Layout Practice in Industry – Useful Tools
  37. 37. The Strategic Facility Layout ProblemFacility Layout Practice in Industry – Useful Tools
  38. 38. The Strategic Facility Layout ProblemFacility Layout Practice in Industry – Useful Tools
  39. 39. The Strategic Facility Layout ProblemFacility Layout Practice in Industry – Useful ToolsThis facility became a majoraward winning operation,partially due to the facility layoutanalysis and planning performedbefore the construction began.
  40. 40. AppendicesAdditional Related InformationTOYOTA / BOEING KAIZEN,SIMULATION,RICHARD MUTHER’S SLP
  41. 41. • What other methods are used to improve facility layouts in the Philippines?The Strategic Facility Layout ProblemThe Toyota Method for Improving Facility Layouts
  42. 42. • What other methods are used to improve facility layouts in the Philippines?• Toyota Motors is well-known as the best manufacturer in the world. Thisincludes Toyota Motor Philippines in Santa Rosa, Laguna.• But, the Toyota Production System (i.e. - Lean Manufacturing) wasdeveloped before personal computers were invented.The Strategic Facility Layout ProblemThe Toyota Method for Improving Facility Layouts
  43. 43. • What other methods are used to improve facility layouts in the Philippines?• Toyota Motors is well-known as the best manufacturer in the world. Thisincludes Toyota Motor Philippines in Santa Rosa, Laguna.• But, the Toyota Production System (i.e. - Lean Manufacturing) wasdeveloped before personal computers were invented.• You will find that Toyota embraces machine automation, but not industrialengineering software. Toyota’s facility layout improvement methods aremanual and paper-based.• We’ll review a Kaizen workshop example from the Boeing CommercialAirplane Group in the USA, which was led by Shingijutsu (a Japaneseconsulting company founded by some of the first Toyota executives todevelop Toyota’s Production System).The Strategic Facility Layout ProblemThe Toyota Method for Improving Facility Layouts
  44. 44. The Strategic Facility Layout ProblemThe Toyota Method for Improving Facility Layouts• The hard metals portion of an airplane parts factory was targeted for re-layout.• Japanese Lean Mfg experts taught Boeing their official re-layout method,performed their study, and recommended moving large, expensive equipment.
  45. 45. • This portion of the factory made400+ different parts.• Only 2 parts were selected foranalysis (minimum 0.5% of parts).• The routing for these parts waswritten down and then physicallyfollowed.• The path followed was scribbledonto a piece of paper(Spaghetti Chart), and thenused to estimate the materialflow distance traveled.The Strategic Facility Layout ProblemThe Toyota Method for Improving Facility Layouts
  46. 46. • This portion of the factory made400+ different parts.• Only 2 parts were selected foranalysis (minimum 0.5% of parts).• The routing for these parts waswritten down and then physicallyfollowed.• The path followed was scribbledonto a piece of paper(Spaghetti Chart), and thenused to estimate the materialflow distance traveled.The Strategic Facility Layout ProblemThe Toyota Method for Improving Facility Layouts
  47. 47. The Strategic Facility Layout ProblemThe Toyota Method for Improving Facility Layouts• This portion of the factory made400+ different parts.• Only 2 parts were selected foranalysis (minimum 0.5% of parts).• The routing for these parts waswritten down and then physicallyfollowed.• The path followed was scribbledonto a piece of paper(Spaghetti Chart), and thenused to estimate the materialflow distance traveled.RESULT: This Spaghetti Chart analysis led Boeingto recommend moving a massive Laser Millworkcenter to the other side of the factory.The construction and production delays, would havecost Boeing well over $150k USD.This would have happened.But, a young & motivated IE got involved.
  48. 48. The Strategic Facility Layout ProblemAn Alternative Method to the Toyota Spaghetti Chart• The young IE introduced Flow Planner software (transforms AutoCAD into an IE facility layoutanalysis tool), which he learned at Penn State University 5 years earlier.• In 3 days (before the end of the Kaizen event), he ACCURATELY modeled and measured theflow for ALL PARTS, and considered the various production quantities over the previous year.
  49. 49. • The young IE introduced Flow Planner software (transforms AutoCAD into an IE facility layoutanalysis tool), which he learned at Penn State University 5 years earlier.• In 3 days (before the end of the Kaizen event), he ACCURATELY modeled and measured theflow for ALL PARTS, and considered the various production quantities over the previous year.The Strategic Facility Layout ProblemAn Alternative Method to the Toyota Spaghetti Chart
  50. 50. • The young IE introduced Flow Planner software (transforms AutoCAD into an IE facility layoutanalysis tool), which he learned at Penn State University 5 years earlier.• In 3 days (before the end of the Kaizen event), he ACCURATELY modeled and measured theflow for ALL PARTS, and considered the various production quantities over the previous year.The thicker the flow line,the higher the flowbetween 2 points(measured down themillimeter)The Strategic Facility Layout ProblemAn Alternative Method to the Toyota Spaghetti Chart
  51. 51. • The young IE found that moving the Laser Mill would have increased material handlingdistance, cost, and time. The IE found that this was the wrong thing to do.• Instead, he found 3 other workcenters that should be moved, and then performed thatanalysis in 15 minutes using a computer and software.The Strategic Facility Layout ProblemAn Alternative Method to the Toyota Spaghetti Chart
  52. 52. LLBBIICCEECurrent Flow:Proposed Flow:
  53. 53. LLBBIICCEECurrent Flow:Proposed Flow:Moving these 3 workcenters E, I, & B(instead of the Laser Mill - L) wouldreduce material flow by 30%, whichwas 365 miles per year Euclidean.
  54. 54. LLBBIICCEECurrent Flow:Proposed Flow:In the end, Boeing did not move theLaser Mill.Also, the young IE was promoted to the737 Final Assembly facility.
  55. 55. • SLP, Systematic Layout Planning (1961)• Applies to any environment• Relationship-based• Thick lines = strong relationships• Weighted factor layout scores• Manual Method• SHA, Systematic Handling Analysis (1969)• Applies to any flow-centric environment• Material flow-based• Thick lines = intense material flow• Weighted factor layout scores• Manual Method• Facilities Planning 2010 heavily supportsSLP and doesn’t mention SHA.The Strategic Facility Layout ProblemFacility Layout Practice in Industry – Useful Concepts
  56. 56. • Though still applicable today, use ofMuther’s SLP and SHA methods inindustry is very low. These manualmethods are very time consuming, andcannot handle large amounts of data.• Lean Manufacturing: measure theprocess before making a change.• How to measure & compare facility layout alternatives (without layoutengineering tools, and with limited time)? Lean spaghetti chart?Dynamic simulation (DES)?• Facility layout IEs in industry require tools to visualize & measure layoutrelationships (flow and non-flow), to support evaluation & teamdiscussion.The Strategic Facility Layout ProblemFacility Layout Practice in Industry – Useful Concepts
  57. 57. Value ClosenessA Absolutely NecessaryE Especially ImportantI ImportantO Ordinary – Closeness OKU UnimportantX Not Desirable• Automated Muther’s SLP (inside ofAutoCAD) permits IEs to use this methodquicker & more frequently.• Automated scoring and diagrammingtools drastically reduce the time requiredto perform a study.The Strategic Facility Layout ProblemFacility Layout Practice in Industry – Useful Tools
  58. 58. • Dynamic Simulation• Model the performance of a system as itchanges over time (4 pages of content).• Variables change during the day(e.g. – arrival rate of jobs, number of jobsin process, waiting time for resources).• Complex data and models. Random numbergeneration and probability distributions.Time consuming data, modeling, validation.• Stochastic: queuing models, throughputand WIP analysis, detailed capacity analysis.• Facility Layout: Possible for use. Lengthy &costly. Re-build the facility layout (duplicateeffort). Create & build logic for model.• Static Simulation• Model the performance of a system over afixed period of time (1 page of content).• Variables are not time based(e.g. – equipment location, unloading timefor a forklift, tasks assigned to a station).• Simple data and models. No randomnumbers or probability distributions.Quick data, modeling, validation.• Deterministic: facility layout, materialhandling analysis, assembly line balancing.• Facility Layout: Global standard for use. Utilizethe data within the AutoCAD layout design.Commercial software exists for this function.The Strategic Facility Layout ProblemStatic Simulation is More Appropriate
  59. 59. • 16 industrial engineering schools are customers (including all CHEDschools). Our long-term vision of facility layout improvement in thePhilippines starts with the universities.• Let’s begin to engineer facility layouts, instead of just drawing them.• If your company is building a new facility, or re-laying out an existingfacility, then it is very important to properly evaluate the new design(s).• Contact us to learn more:• Presentation / Demonstration• Software• Training• ConsultingThe Strategic Facility Layout ProblemCall to Action
  60. 60. Stand-alone Software Tools:• Facility Layout• Time & Motion Study• Assembly Line BalancingCall:(+63) 49-801-5691 or 0922-849-3948Email:robin@proplanner.comParent Website:www.proplanner.comLinkedIn:http://ph.linkedin.com/in/proplannerasiaProplanner AsiaContact Information

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