Production operation management chapter 1

1. © Wiley 2010 1
Chapter 10 – Facility Layout
Operations Management
by
R. Dan Reid & Nada R. Sanders
4th Edition © Wiley 2010

2. © Wiley 2010 2
Learning Objectives
 Define layout planning and explain its
importance
 Identify and describe different types of
layouts
 Compare process layouts & product
layouts
 Describe the steps involved in designing a
process layout

3. © Wiley 2010 3
Learning Objectives – con’t
 Describe the steps involved in designing a
product layout
 Explain the advantages of hybrid layouts
 Define the meaning of group technology
(cell) layouts

4. © Wiley 2010 4
What Is Layout Planning?
Layout planning is deciding the best physical arrangement of
all resources within a facility
 Facility resource arrangement can significantly affect
productivity
 Two broad categories of operations:
 Intermittent processing systems – low volume of many different
products
 Continuous processing systems – high volume of a few
standardized products

5. © Wiley 2010 5
Types of Layouts
 Four basic layout types consisting of:
 Process layouts - Group similar resources together
 Product layouts - Designed to produce a specific
product efficiently
 Hybrid layouts - Combine aspects of both process
and product layouts
 Fixed-Position layouts - Product is two large to
move; e.g. a building

6. © Wiley 2010 6
Process Layouts
 Process layout unique characteristics include:
 Resources used are general purpose
 Facilities are less capital intensive
 Facilities are more labor intensive
 Resources have greater flexibility
 Processing rates are slower
 Material handling costs are higher

7. © Wiley 2010 7
Process Layouts – con’t
 Scheduling resources & work flow is more
complex
 Space requirements are higher

8. © Wiley 2010 8
Product Layouts
 Product layout unique characteristics are:
 Resources are specialized
 Facilities are capital intensive
 Processing rates are faster
 Material handling costs are lower
 Space requirements for inventory storage are
lower
 Flexibility is low relative to the market

9. © Wiley 2010 9
Process vs. Product Layouts
Here are the characteristic differences between a process
and product layout.

10. © Wiley 2010 10
Hybrid Layouts
 Combine elements of both product &
process layouts
 Maintain some of the efficiencies of product
layouts
 Maintain some of the flexibility of process
layouts
 Examples:
 Group technology & manufacturing cells
 Grocery stores

11. © Wiley 2010 11
Fixed-Position Layout
 Used when product is large
 Product is difficult or impossible to move,
i.e. very large or fixed
 All resources must be brought to the site
 Scheduling of crews and resources is a
challenge

12. © Wiley 2010 12
Designing Process Layouts
Step 1: Gather information:
Space needed, space available, identify closeness
measures
Step 2: Develop alternative block plans:
Using trial-and-error or decision support tools
Step 3: Develop a detailed layout:
Consider exact sizes/shapes of departments and
work centers including aisles and stairways
Tools like drawings, 3-D models, and CAD software
are available to facilitate this process

13. © Wiley 2010 13
Special Cases of Process
Layouts
A number of unique process layouts require
special attention. We will look at two of
these:
 Warehouse layouts
 Office Layouts

14. © Wiley 2010 14
Warehouse Layouts
Warehouse Layout Considerations:
 Primary decision is where to locate each
department relative to the dock
 Departments can be organized to minimize “ld”
totals
 Departments of unequal size require modification
of the typical ld calculations to include a
calculation of the “ratio of trips to area
needed”
 The usage of “Crossdocking” modifies the
traditional warehouse layouts; more docks, less
storage space, and less order picking

15. © Wiley 2010 15
Office Layouts
Office Layout Considerations:
 Almost half of US workforce works in an office
environment
 Human interaction and communication are the primary
factors in designing office layouts
 Layouts need to account for physical environment and
psychological needs of the organization
 One key layout trade-off is between proximity and
privacy
 Open concept offices promote understanding & trust
 Flexible layouts incorporating “office landscaping” help
to solve the privacy issue in open office environments

16. © Wiley 2010 16
Designing Product Layouts
 Designing product layouts requires
consideration of:
 Sequence of tasks to be performed by each
workstation
 Logical order
 Speed considerations – line balancing

17. © Wiley 2010 17
Designing Product Layouts –
con’t
Step 1: Identify tasks & immediate predecessors
Step 2: Determine output rate
Step 3: Determine cycle time
Step 4: Compute the Theoretical Minimum number of
Stations
Step 5: Assign tasks to workstations (balance the
line)
Step 6: Compute efficiency, idle time & balance delay

18. © Wiley 2010 18
Step 1: Identify Tasks &
Immediate Predecessors
Example 10.4 Vicki's Pizzeria and the Precedence Diagram
Immediate Task Time
Work Element Task Description Predecessor (seconds
A Roll dough None 50
B Place on cardboard backing A 5
C Sprinkle cheese B 25
D Spread Sauce C 15
E Add pepperoni D 12
F Add sausage D 10
G Add mushrooms D 15
H Shrinkwrap pizza E,F,G 18
I Pack in box H 15
Total task time 165

19. © Wiley 2010 19
Layout Calculations
 Step 2: Determine output rate
 Vicki needs to produce 60 pizzas per hour
 Step 3: Determine cycle time
 The amount of time each workstation is allowed to
complete its tasks
 Limited by the bottleneck task (the longest task in a
process):
 
 
sec./unit
60
units/hr
60
sec/min
60
x
min/hr
60
units/hr
output
desired
sec./day
time
available
)
(sec./unit
time
Cycle 


hour
per
pizzas
or
units/hr,
72
sec./unit
50
sec./hr.
3600
time
task
bottleneck
time
available
output
Maximum 



20. © Wiley 2010 20
Layout Calculations con’t
 Step 4: Compute the theoretical minimum
number of stations
 TM = number of stations needed to
achieve 100% efficiency (every second is
used)
 Always round up (no partial workstations)
 Serves as a lower bound for our analysis
 
stations
3
or
2.75,
n
sec/statio
60
seconds
165
time
cycle
times
task
TM 




21. © Wiley 2010 21
Layout Calculations con’t
 Step 5: Assign tasks to workstations
 Start at the first station & choose the longest eligible task following
precedence relationships
 Continue adding the longest eligible task that fits without going over the
desired cycle time
 When no additional tasks can be added within the desired cycle time, begin
assigning tasks to the next workstation until finished
Workstation Eligible task Task Selected Task time Idle time
A A 50 10
B B 5 5
C C 25 35
D D 15 20
E, F, G G 15 5
E, F E 12 48
F F 10 38
H H 18 20
I I 15 5
1
2
3

22. © Wiley 2010 22
Last Layout Calculation
 Step 6: Compute efficiency and balance delay
 Efficiency (%) is the ratio of total productive
time divided by total time
 Balance delay (%) is the amount by which the
line falls short of 100%
  91.7%
100
sec.
60
x
stations
3
sec.
165
NC
t
(%)
Efficiency 



8.3%
91.7%
100%
delay
Balance 



23. © Wiley 2010 23
Other Product Layout Considerations
 Shape of the line (S, U, O, L):
 Share resources, enhance communication & visibility,
impact location of loading & unloading
 Paced versus Un-paced lines
 Paced lines use an automatically enforced cycle time
 Number of Product Models produced
 Single
 Mixed-model lines

24. © Wiley 2010 24
Group Technology (CELL)
Layouts
 One of the most popular hybrid layouts uses Group
Technology (GT) and a cellular layout
 GT has the advantage of bringing the efficiencies of a
product layout to a process layout environment

25. © Wiley 2010 25
Process Flows before the Use of GT Cells

26. © Wiley 2010 26
Process Flows after the Use of GT Cells

27. © Wiley 2010 27
Facility Layout Across the
Organization
Layout planning is organizationally important
for an efficient operations
 Marketing is affected by layout especially
when clients come to the site
 Human resources is affected as layout impacts
people
 Finance is involved as layout changes can be
costly endeavors

28. © Wiley 2010 28
Facility Layout within OM:
How it all fits together
 Layout decisions are directly related to issues of product
design and process selection (Ch 3).
 Job design, as process layouts tend to require greater
worker skills than do product layouts (Ch 11).
 Degree of automation, as product layouts tend to be
more capital intensive and use more automation
compared to process layouts (Ch 3).
 Layout decisions are also affected by implementation of
just-in-time (JIT) systems, which dictate a line flow and
the use of group technology (GT) cells (Ch 7).
 As layout decisions specify the flow of goods through the
facility, they impact all other aspects of operations
management.

29. © Wiley 2010 29
Chapter 10 Highlights
 Layout planning is deciding on the best physical
arrangement of all resources that consumes space within a
facility. Proper layout planning is highly important for the
efficient running of a business. Otherwise, there can be
much wasted time and energy, as well as confusion.
 There are four basic types of layouts: process, product,
hybrid, and fixed position. Process layouts group
resources based on similar processes. Product layouts
arrange resources in straight-line fashion. Hybrid layouts
combine elements of both process and product layouts.
Fixed-position layouts occur when the product is larger
and cannot be moved.

30. © Wiley 2010 30
Chapter 10 Highlights – con’t
 Process layouts provide much flexibility and allow for the
production of many products with differing characteristics.
Product layouts, on the other hand, provide greater
efficiency when producing one type of product.
 The steps for designing process layouts are (1) gather
information about space needs, space availability, and
closeness requirements of departments; (2) developing a
block plan or schematic of the layout; and (3) developing a
detailed layout.

31. © Wiley 2010 31
Chapter 10 Highlights – con’t
 The steps for designing an product layout are (1) identify
tasks that need to be performed and their immediate
predecessors; (2) determine output rate; (3) determine
cycle time; (4) computing the theoretical minimum number
of work stations, (5) assigning tasks to workstations; and
(6) computing efficiency and balance delay.
 Hybrids layouts have advantages over other layout types
because they combine elements of both process and
product layouts to increase efficiency.

32. © Wiley 2010 32
Chapter 10 Highlights – con’t
 An example of hybrid layouts is group technology or cell
layouts. Group technology is the process of crating
groupings of products based on similar processing
requirements. Cells are created for each grouping of
products, resulting in a more orderly flow of products
through the facility.

33. © Wiley 2010 33

34. © Wiley 2010 34

35. © Wiley 2010 35

36. © Wiley 2010 36

37. © Wiley 2010 37

38. Chapter 10 Homework Hints
 10.8: Assign sites based on number of
trips (refer to Example 10.2). There is no
strategy regarding which side of the aisle
to assign—just nearness to the dock.
 10.16: Follow the steps. This is a product
layout (assembly line balancing). The
book has an example on pages 360-366,
which is also on the slides covered in class.

39. Sample Problem—10.7
dock aisle
Department Category Trips to/from
dock
1 Sports t-shirts 50
2 Men’s t-shirts 63
3 Women’s t-shirts 35
4 Children’s t-shirts 55
5 Fashion t-shirts 48
6 Undershirts 60

40. Sample Problem –10.15
 Draw precedence diagram
 Determine cycle time—demand = 50 units/hr
 Theoretical minimum no. of work stations
 Assign tasks to workstations using cycle time
 Efficiency and balance delay of line?
 Bottleneck?
 Maximum output?
Task Imm. predecessor Task time (sec)
A None 55
B A 30
C A 22
D B 35
E B, C 50
F C 15
G F 5
H G 10
TOTAL 222