Heizer om10 ch09-layout

10/16/2010

Layout Strategies Outline
9
Global Company Profile:
McDonald’s
PowerPoint presentation to accompany
P P i t t ti t The Strategic Importance of
Heizer and Render Layout Decisions
Operations Management, 10e
Principles of Operations Management, 8e
Types of Layout
PowerPoint slides by Jeff Heyl
Office Layout

© 2011 Pearson Education, Inc. publishing as Prentice Hall 9-1 © 2011 Pearson Education, Inc. publishing as Prentice Hall 9-2

Outline – Continued Outline – Continued
Retail Layout Process-Oriented Layout
Servicescapes Computer Software for Process-
Warehousing and Storage Layouts Oriented Layouts
Cross-Docking Work Cells
W k C ll
Random Docking Requirements of Work Cells
Customizing Staffing and Balancing Work Cells

Fixed-Position Layout The Focused Work Center and the
Focused Factory


Outline – Continued Learning Objectives
When you complete this chapter, you
Repetitive and Product-Oriented should be able to:
Layout
1. Discuss important issues in office layout
Assembly-Line Balancing
y g
2.
2 Define the objectives of retail layout
3. Discuss modern warehouse
management and terms such as ASRS,
cross-docking, and random stocking
4. Identify when fixed-position layouts are
appropriate


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10/16/2010

Learning Objectives Innovations at McDonald’s
When you complete this chapter, you Indoor seating (1950s)
should be able to: Drive-through window (1970s)
5. Explain how to achieve a good process- Adding breakfast to the menu
oriented facility layout
y y (1980s)
6. Define work cell and the requirements of
a work cell
Adding play areas (late 1980s)
7. Define product-oriented layout Redesign of the kitchens (1990s)
8. Explain how to balance production flow Self-service kiosk (2004)
in a repetitive or product-oriented facility
Now three separate dining sections

Innovations at McDonald’s McDonald’s New Layout
Indoor seating (1950s) Seventh major innovation
Drive-through window (1970s) Redesigning all 30,000 outlets around
the world
Adding breakfast to Six out of the
the menu
(1980s) seven are Three separate dining areas
p g

Adding play areas (late layout
Linger zone with comfortable chairs and
1980s) Wi-Fi connections
decisions!
Redesign of the kitchens (1990s) Grab and go zone with tall counters
Flexible zone for kids and families
Self-service kiosk (2004)
Facility layout is a source of
Now three separate dining sections competitive advantage
© 2011 Pearson Education, Inc. publishing as Prentice Hall 9-9 © 2011 Pearson Education, Inc. publishing as Prentice Hall 9 - 10

Strategic Importance of Layout Design
Layout Decisions Considerations
Higher utilization of space, equipment,
and people
The objective of layout strategy
is to develop an effective and Improved flow of information, materials,
p , ,
efficient layout that will meet the or people
firm’s competitive requirements Improved employee morale and safer
working conditions
Improved customer/client interaction
Flexibility

© 2011 Pearson Education, Inc. publishing as Prentice Hall 9 - 11 © 2011 Pearson Education, Inc. publishing as Prentice Hall 9 - 12

2

10/16/2010

Types of Layout Types of Layout
1. Office layout 1. Office layout: Positions workers,
their equipment, and spaces/offices
2. Retail layout to provide for movement of
3. Warehouse layout information
4. Fixed-position layout 2. Retail layout: Allocates shelf space
and responds to customer behavior
5. Process-oriented layout
3. Warehouse layout: Addresses trade-
6. Work-cell layout
offs between space and material
7. Product-oriented layout handling

Types of Layout Types of Layout

4. Fixed-position layout: Addresses the 6. Work cell layout: Arranges
layout requirements of large, bulky machinery and equipment to focus
projects such as ships and buildings on production of a single product or
5. Process-oriented layout: Deals with group of related products
low-volume, high-variety production 7. Product-oriented layout: Seeks the
(also called job shop or intermittent best personnel and machine
production) utilizations in repetitive or
continuous production


Layout Strategies Layout Strategies
Objectives Examples Objectives Examples
Office Locate workers requiring Allstate Insurance Job Shop Manage varied material flow Arnold Palmer Hospital
frequent contact close to one Microsoft Corp. (process for each product Hard Rock Cafe
another oriented)
Olive Garden
Retail Expose customer to high- Kroger’s Supermarket
margin items Work Cell Identify a product family, Hallmark Cards
Walgreen’s (product build teams, cross train team Wheeled Coach
Bloomingdale’s families) members
Standard Aero
Warehouse Balance low cost storage Federal-Mogul’s warehouse
(storage) with low-cost material Repetitive/ Equalize the task time at each Sony’s TV assembly line
The Gap’s distribution center Continuous workstation
handling Toyota Scion
(product
Project (fixed Move material to the limited Ingall Ship Building Corp. oriented)
position) storage areas around the site Trump Plaza
Pittsburgh Airport

Table 9.1 Table 9.1


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Good Layouts Consider Office Layout
Grouping of workers, their equipment, and
Material handling equipment spaces to provide comfort, safety, and
movement of information
Capacity and space requirements
Movement of
Environment and aesthetics information is main
i f ti i i
Flows of information distinction
Typically in state of
Cost of moving between various flux due to frequent
work areas technological
changes


Relationship Chart Supermarket Retail Layout

Objective is to maximize
profitability per square foot of
floor space
Sales and profitability vary
directly with customer exposure

Figure 9.1


Five Helpful Ideas for Store Layout
Supermarket Layout
1. Locate high-draw items around the
periphery of the store
2. Use prominent locations for high-impulse
and high-margin items
3. Distribute power items to both sides of
an aisle and disperse them to increase
viewing of other items
4. Use end-aisle locations
5. Convey mission of store through careful
positioning of lead-off department Figure 9.2

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10/16/2010

Retail Slotting Retail Store Shelf Space
Manufacturers pay fees to retailers Planogram
to get the retailers to display (slot) 5 facings
their product Computerized
tool for shelf-

Shampoo

Shampoo

Shampoo

Shampoo

Shampoo
Contributing factors space
management
Limited shelf space
Generated from
An increasing number of new store’s scanner

Conditioner
Shampoo

Shampoo

Shampoo

Shampoo
products data on sales

Conditioner

Conditioner
Better information about sales Often supplied
through POS data collection by manufacturer
Closer control of inventory 2 ft.

Servicescapes Warehousing and Storage
1. Ambient conditions - background Layouts
characteristics such as lighting, sound,
smell, and temperature
Objective is to optimize trade-offs
2. Spatial layout and functionality - which
involve customer
between handling costs and costs
circulation path planning,
i l ti th l i associated with warehouse space
aisle characteristics, and Maximize the total “cube” of the
product grouping warehouse – utilize its full volume
3. Signs, symbols, and while maintaining low material
artifacts - characteristics handling costs
of building design that
carry social significance

Warehousing and Storage Warehousing and Storage
Layouts Layouts
Material Handling Costs Warehouse density tends to vary
All costs associated with the transaction inversely with the number of different
items stored
Incoming transport
Automated Storage and
Storage
Retrieval Systems (ASRSs)
Finding and moving material can significantly improve
Outgoing transport warehouse productivity by
Equipment, people, material, supervision, an estimated 500%
insurance, depreciation Dock location is a key
Minimize damage and spoilage design element

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10/16/2010

Cross-
Cross-Docking Random Stocking
Typically requires automatic identification
Materials are moved directly from systems (AISs) and effective information
receiving to shipping and are not placed systems
in storage in the warehouse
Random assignment of stocking locations
Requires tight allows more efficient use of space
sc edu g a d
scheduling and
accurate shipments, Key tasks
bar code or RFID 1. Maintain list of open locations
identification used for 2. Maintain accurate records
advanced shipment
notification as 3. Sequence items to minimize travel, pick time
materials 4. Combine picking orders
are unloaded 5. Assign classes of items to particular areas

Customizing Warehouse Layout
Traditional Layout
Value-added activities performed at Storage racks
the warehouse omization

Enable low cost and rapid response
strategies
Custo

Assembly of components
Loading software
Repairs Conveyor

Customized labeling and packaging Staging
Office
Shipping and receiving docks

Warehouse Layout Fixed-
Fixed-Position Layout
Cross-Docking Layout
Product remains in one place
Shipping and receiving docks Workers and equipment come to site
Complicating factors
Limited space at site
Office

Different materials
required at different
stages of the project
Shipping and receiving docks
Volume of materials
needed is dynamic

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10/16/2010

Alternative Strategy Process-
Process-Oriented Layout
As much of the project as possible
is completed off-site in a product- Like machines and equipment are
oriented facility grouped together
This can Flexible and capable of handling a
significantly wide variety of products or
id i t f d t
improve services
efficiency but Scheduling can be difficult and
is only possible setup, material handling, and
when multiple labor costs can be high
similar units need to be created

Process-
Process-Oriented Layout Layout at Arnold Palmer Hospital
Pie-shaped
Patient A - broken leg Central break rooms
ER
triage Emergency room admissions
and medical
room supply rooms
Patient B - erratic heart
Surgery
pacemaker
Local linen Central nurses
Laboratories
supply station

Radiology ER Beds Pharmacy Billing/exit

Figure 9.3
Local
nursing pod

Process-
Process-Oriented Layout Process-
Process-Oriented Layout
Arrange work centers so as to n n

Minimize cost = ∑ ∑ Xij Cij
minimize the costs of material i=1 j=1
handling
where n = total number of work centers or
Basic
B i cost elements are
t l t departments
Number of loads (or people) i, j = individual departments
moving between centers Xij = number of loads moved from
department i to department j
Distance loads (or people) move
between centers Cij = cost to move a load between
department i and department j


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10/16/2010

Process Layout Example Process Layout Example
Arrange six departments in a factory to Number of loads per week
minimize the material handling costs. Department Assembly Painting Machine Receiving Shipping Testing
Each department is 20 x 20 feet and the (1) (2) Shop (3) (4) (5) (6)
building is 60 feet long and 40 feet wide. Assembly (1) 50 100 0 0 20

1. Construct a “from-to matrix” Painting (2) 30 50 10 0

2. Determine the space requirements Machine Shop (3) 20 0 100

3. Develop an initial schematic diagram Receiving (4) 50 0

4. Determine the cost of this layout Shipping (5) 0

5. Try to improve the layout Testing (6)

6. Prepare a detailed plan
Figure 9.4

Area 1 Area 2 Area 3
Interdepartmental Flow Graph
100
Assembly Painting Machine Shop
Department Department Department
(1) (2) (3)
Assembly
y 50 Painting
g 30 Machine
(1) (2) Shop (3)
40’
10
Receiving Shipping Testing 100
(4) (5) (6)
Receiving Shipping Testing
(4) (5) (6)
50
Figure 9.5
60’ Figure 9.6

n n Revised Interdepartmental Flow Graph
Cost = ∑ ∑ Xij Cij 30
i=1 j=1

Cost = $50 + $200 + $40
50 100
(1 and 2) (1 and 3) (1 and 6) Painting
(2)
g Assembly
(1)
y Machine
Shop (3)

+ $30 + $50 + $10
(2 and 3) (2 and 4) (2 and 5) 100
50
+ $40 + $100 + $50
(3 and 4) (3 and 6) (4 and 5)
(4) (5) (6)
50
= $570
Figure 9.7

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10/16/2010

n n

Cost = ∑ ∑ Xij Cij
i=1 j=1 Painting Assembly Machine Shop
(2) (1) (3)
Cost = $50 + $100 + $20
(1 and 2) (1 and 3) (1 and 6)
40’
+ $60 + $50 + $10
(2 and 3) (2 and 4) (2 and 5)
+ $40 + $100 + $50 Department Department Department
(4) (5) (6)
(3 and 4) (3 and 6) (4 and 5)

= $480 Area 4 Area 5 Area 6
Figure 9.8
60’

Computer Software CRAFT Example
A A A A B B D D D D B B
Graphical approach only works for
small problems A A A A B B D D D D B B

D D D D D D D D D E E E
Computer programs are available to
solve
sol e bigger problems C C D D D D C C D E E F

F F F F F D A A A A A F
CRAFT
E E E E E D A A A F F F
ALDEP
TOTAL COST 20,100 TOTAL COST 14,390
CORELAP EST. COST REDUCTION .00 EST. COST REDUCTION 70
ITERATION 0 ITERATION 3
Factory Flow (a) (b)
Figure 9.9

Computer Software Work Cells
Three dimensional visualization Reorganizes people and machines
software allows managers to view into groups to focus on single
possible layouts and assess process, products or product groups
material Group technology identifies
p gy
handling,
handling products that have similar
efficiency, characteristics for particular cells
and safety
issues Volume must justify cells
Cells can be reconfigured as
designs or volume changes

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10/16/2010

Advantages of Work Cells Requirements of Work Cells
1. Reduced work-in-process inventory
2. Less floor space required 1. Identification of families of products
3. Reduced raw material and finished
goods inventory 2. A high level of training, flexibility
4.
4 Reduced direct labor and empowerment of employees
5. Heightened sense of employee 3. Being self-contained, with its own
participation equipment and resources
6. Increased use of equipment and 4. Test (poka-yoke) at each station in
machinery
the cell
7. Reduced investment in machinery and
equipment

Improving Layouts Using Improving Layouts Using
Work Cells Work Cells

Current layout - straight
lines make it hard to balance Improved layout - in U
tasks because work may not shape, workers have better
Current layout - workers access. Four cross-trained
in small closed areas. be divided evenly
workers were reduced.

Improved layout - cross-trained
workers can assist each other. U-shaped line may reduce employee movement
May be able to add a third worker and space requirements while enhancing
as additional output is needed. communication, reducing the number of
workers, and facilitating inspection
Figure 9.10 (a) Figure 9.10 (b)


Staffing and Balancing Staffing Work Cells Example
Work Cells
600 Mirrors per day required
Determine the takt time Mirror production scheduled for 8 hours per day
From a work balance 60

Total work time available chart total
Takt time = 50
Units required operation time
p
Standard time required
d

= 140 seconds 40

Determine the number 30

of operators required
20

Total operation time required 10
Workers required =
Takt time
0
Assemble Paint Test Label Pack for
shipment
Operations

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10/16/2010

Staffing Work Cells Example Work Balance Charts
600 Mirrors per day required Used for evaluating operation
Mirror production scheduled for 8 hours per day times in work cells
From a work balance
chart total Can help identify bottleneck
operation time
p operations
= 140 seconds
Takt time = (8 hrs x 60 mins) / 600 units Flexible, cross-trained employees
= .8 mins = 48 seconds can help address labor bottlenecks
Total operation time required Machine bottlenecks may require
Workers required = Takt time other approaches
= 140 / 48 = 2.91

Focused Work Center and Focused Work Center and
Focused Factory Focused Factory
Focused Work Center Work Cell Focused Work Center Focused Factory

Description: Work cell A focused work center is A focused factory is a
Identify a large family of similar products is a temporary a permanent product- permanent facility to
that have a large and stable demand product-oriented oriented arrangement produce a product or
arrangement of of machines and component in a
Moves production from a general purpose,
general-purpose, machines and personnel in what is product-oriented
personnel in what is ordinarily a process- facility. Many focused
process-oriented facility to a large work cell ordinarily a process- oriented facility factories currently
oriented facility being built were
Focused Factory originally part of a
process-oriented
facility
A focused work cell in a separate facility
Example: A job shop Example: Pipe bracket Example: A plant to
May be focused by product line, layout, with machinery and manufacturing at a produce window
quality, new product introduction, flexibility, personnel rearranged
to produce 300 unique
shipyard mechanism for
automobiles
or other requirements control panels

© 2011 Pearson Education, Inc. publishing as Prentice Hall 9 - 63 © 2011 Pearson Education, Inc. publishing as Prentice Hall Table 9.2 9 - 64

Repetitive and Product-
Product- Product-
Product-Oriented Layouts
Oriented Layout Fabrication line
Builds components on a series of machines
Organized around products or families of
Machine-paced
similar high-volume, low-variety products
high- low-
Require mechanical or engineering changes
1. Volume is adequate for high equipment to balance
utilization
tili ti Assembly line
2. Product demand is stable enough to justify high Puts fabricated parts together at a series of
investment in specialized equipment workstations
3. Product is standardized or approaching a phase Paced by work tasks
of life cycle that justifies investment
Balanced by moving tasks
4. Supplies of raw materials and components are
adequate and of uniform quality Both types of lines must be balanced so that the
time to perform the work at each station is the same

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10/16/2010

Product-
Product-Oriented Layouts McDonald’s Assembly Line
Advantages
1. Low variable cost per unit
2. Low material handling costs
3. Reduced work-in-process inventories
4. Easier training and supervision
5. Rapid throughput
Disadvantages
1. High volume is required
2. Work stoppage at any point ties up the
whole operation
3. Lack of flexibility in product or production
rates Figure 9.12


Disassembly Lines Assembly-
Assembly-Line Balancing
Objective is to minimize the imbalance
Disassembly is being considered in new between machines or personnel while
product designs meeting required output
“Green” issues and recycling standards are Starts with the precedence
important consideration relationships
Automotive Determine cycle time
disassembly
Calculate theoretical
is the 16th minimum number of
largest workstations
industry in
Balance the line by
the US assigning specific
tasks to workstations

Wing Component Example Wing Component Example
Performance Task Must Follow Performance Task Must Follow
Time Task Listed Time Task Listed
Task (minutes) Below Task (minutes) Below
A 10 — A 10 —
B 11 A This means that B 11 A
C 5 B tasks B and E C 5 B
cannot be done
D 4 B until task A has D 4 B
E 12 A been completed E 12 A
F 3 C, D F 3 C, D 5

G 7 F G 7 F 10 11
C
3 7
H 11 E H 11 E
A B F G
I 3 G, H I 3 G, H 4
3
Total time 66 Total time 66 12
D
11 I
E H

Figure 9.13

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10/16/2010

Wing Component Example WingLine-Balancing Heuristics
Component Example
480 available 1. Longest task time Choose the available task
480 available
Performance Task Must Follow Performance Task Must Followlongest task time
with the
Time Task Listed mins per day Time Task Listed mins per day
Task (minutes) Below 40 units required Task Most following tasksBelow
2. (minutes) Choose the available task required
40 units
A 10 — A 10 — with the largestCycle time = 12 mins
number of
B 11 A B 11 A following tasks
Production time Minimum
C 5 B available per day
p y C 3. Ranked positional
5 B workstations = 5.5 or 6
Choose the available task for
D 4 Cycle i
C B time = Units required per day
l D weight4 B which the sum of following
E 12 A = 480 / 40 E 12 A task times is the longest
F 3 C, D 5 F 3 C, D 5
= 12 minutes per unit
G 7 F C G 4. Shortest task time
7 FChoose the available task
C
10 n 11 3 7 with the shortest task time
10 11 3 7
H 11 E H 11 E
I 3 Minimum A i∑1 Time for taskF
G, H =
B
4
i G
I 5. Least number of
3
A B
G,Choose the available task
H 4
F G
number of = 3 3
Total time 66 workstations Cycle D
12
time
11 I
Total time 66 tasks
following with the least number of
D I
following tasks12 11
= 66 / 12
E H E H
= 5.5 or 6 stations Table 9.4
Figure 9.13 Figure 9.13

Wing Component Example Wing Component Example
Performance Task Must Follow 480 available Performance Task Must Follow 480 available
Time Task Listed mins per day Time Task Listed mins per day
Task (minutes) Below 40 units required Task (minutes) Below 40 units required
A 10 — Cycle time = 12 mins A 10 — Cycle time = 12 mins
B 11 A Minimum B 11 A Minimum
Station
workstations = 5.5 or 6 workstations = 5.5 or 6
C 5 5 B C 5 B
2
D 4 C B D 4 B
E 10 11
12 A 3 7 E 12 A
F A B3 C, D F G F 3 C, D
4 3
G 7 F G 7 F ∑ Task times
D E Station 3 Efficiency =
H 11 Station 3 I H (Actual number of workstations) x (Largest cycle time)
11 E
I 3 12 G, H 11 I 3 G, H
Station 6 6
= 66 minutes / (6 stations) x (12 minutes)
Total time 66
Station Station Total time 66
1 E H = 91.7%
Station Station
4 5 Figure 9.14

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