9 Layout Strategies Power Point presentation to accompany

9 Layout Strategies Power. Point presentation to accompany Heizer and Render Operations Management, 10 e Principles of Operations Management, 8 e Power. Point slides by Jeff Heyl © 2011 Pearson Education, Inc. publishing as Prentice Hall 9 -1

Strategic Importance of Layout Decisions The objective of layout strategy is to develop an effective and efficient layout that will meet the firm’s competitive requirements © 2011 Pearson Education, Inc. publishing as Prentice Hall 9 -2

Layout Design Considerations u Higher utilization of space, equipment, and people u Improved flow of information, materials, or people u Improved employee morale and safer working conditions u Improved customer/client interaction u Flexibility © 2011 Pearson Education, Inc. publishing as Prentice Hall 9 -3

Types of Layout 1. Office layout 2. Retail layout 3. Warehouse layout 4. Fixed-position layout 5. Process-oriented layout 6. Work-cell layout 7. Product-oriented layout © 2011 Pearson Education, Inc. publishing as Prentice Hall 9 -4

Types of Layout 1. Office layout: Positions workers, their equipment, and spaces/offices to provide for movement of information 2. Retail layout: Allocates shelf space and responds to customer behavior 3. Warehouse layout: Addresses tradeoffs between space and material handling © 2011 Pearson Education, Inc. publishing as Prentice Hall 9 -5

Types of Layout 4. Fixed-position layout: Addresses the layout requirements of large, bulky projects such as ships and buildings 5. Process-oriented layout: Deals with low-volume, high-variety production (also called job shop or intermittent production) © 2011 Pearson Education, Inc. publishing as Prentice Hall 9 -6

Types of Layout 6. Work cell layout: Arranges machinery and equipment to focus on production of a single product or group of related products 7. Product-oriented layout: Seeks the best personnel and machine utilizations in repetitive or continuous production © 2011 Pearson Education, Inc. publishing as Prentice Hall 9 -7

Layout Strategies Objectives Office Retail Examples Locate workers requiring frequent contact close to one another Allstate Insurance Expose customer to highmargin items Kroger’s Supermarket Microsoft Corp. Walgreen’s Bloomingdale’s Warehouse (storage) Balance low cost storage with Federal-Mogul’s warehouse low-cost material handling The Gap’s distribution center Project (fixed position) Move material to the limited storage areas around the site Ingall Ship Building Corp. Trump Plaza Pittsburgh Airport Table 9. 1 © 2011 Pearson Education, Inc. publishing as Prentice Hall 9 -8

Layout Strategies Objectives Examples Job Shop (process oriented) Manage varied material flow for each product Arnold Palmer Hospital Work Cell (product families) Identify a product family, build teams, cross train team members Repetitive/ Continuous (product oriented) Equalize the task time at each Sony’s TV assembly line workstation Toyota Scion Hard Rock Cafe Olive Garden Hallmark Cards Wheeled Coach Standard Aero Table 9. 1 © 2011 Pearson Education, Inc. publishing as Prentice Hall 9 -9

Good Layouts Consider u Material handling equipment u Capacity and space requirements u Environment and aesthetics u Flows of information u Cost of moving between various work areas © 2011 Pearson Education, Inc. publishing as Prentice Hall 9 - 10

Office Layout u Grouping of workers, their equipment, and spaces to provide comfort, safety, and movement of information u Movement of information is main distinction u Typically in state of flux due to frequent technological changes © 2011 Pearson Education, Inc. publishing as Prentice Hall 9 - 11

Relationship Chart Figure 9. 1 © 2011 Pearson Education, Inc. publishing as Prentice Hall 9 - 12

Supermarket Retail Layout u Objective is to maximize profitability per square foot of floor space u Sales and profitability vary directly with customer exposure © 2011 Pearson Education, Inc. publishing as Prentice Hall 9 - 13

Five Helpful Ideas for 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 © 2011 Pearson Education, Inc. publishing as Prentice Hall 9 - 14

Store Layout Figure 9. 2 © 2011 Pearson Education, Inc. publishing as Prentice Hall 9 - 15

Retail Slotting u Manufacturers pay fees to retailers to get the retailers to display (slot) their product u Contributing factors u Limited shelf space u An increasing number of new products u Better information about sales through POS data collection u Closer control of inventory © 2011 Pearson Education, Inc. publishing as Prentice Hall 9 - 16

Retail Store Shelf Space Planogram Shampoo Shampoo Conditioner u Often supplied by manufacturer Shampoo u Generated from store’s scanner data on sales Shampoo u Computerized tool for shelfspace management 5 facings 2 ft. © 2011 Pearson Education, Inc. publishing as Prentice Hall 9 - 17

Servicescapes 1. Ambient conditions - background characteristics such as lighting, sound, smell, and temperature 2. Spatial layout and functionality - which involve customer circulation path planning, aisle characteristics, and product grouping 3. Signs, symbols, and artifacts - characteristics of building design that carry social significance © 2011 Pearson Education, Inc. publishing as Prentice Hall 9 - 18

Warehousing and Storage Layouts u Objective is to optimize trade-offs between handling costs and costs associated with warehouse space u Maximize the total “cube” of the warehouse – utilize its full volume while maintaining low material handling costs © 2011 Pearson Education, Inc. publishing as Prentice Hall 9 - 19

Warehousing and Storage Layouts Material Handling Costs u All costs associated with the transaction u Incoming transport u Storage u Finding and moving material u Outgoing transport u Equipment, people, material, supervision, insurance, depreciation u Minimize damage and spoilage © 2011 Pearson Education, Inc. publishing as Prentice Hall 9 - 20

Warehousing and Storage Layouts u Warehouse density tends to vary inversely with the number of different items stored u Automated Storage and Retrieval Systems (ASRSs) can significantly improve warehouse productivity by an estimated 500% u Dock location is a key design element © 2011 Pearson Education, Inc. publishing as Prentice Hall 9 - 21

Cross-Docking u Materials are moved directly from receiving to shipping and are not placed in storage in the warehouse u Requires tight scheduling and accurate shipments, bar code or RFID identification used for advanced shipment notification as materials are unloaded © 2011 Pearson Education, Inc. publishing as Prentice Hall 9 - 22

Random Stocking u Typically requires automatic identification systems (AISs) and effective information systems u Random assignment of stocking locations allows more efficient use of space u Key tasks 1. Maintain list of open locations 2. Maintain accurate records 3. Sequence items to minimize travel, pick time 4. Combine picking orders 5. Assign classes of items to particular areas © 2011 Pearson Education, Inc. publishing as Prentice Hall 9 - 23

Customizing u Value-added activities performed at the warehouse u Enable low cost and rapid response strategies u Assembly of components u Loading software u Repairs u Customized labeling and packaging © 2011 Pearson Education, Inc. publishing as Prentice Hall 9 - 24

Warehouse Layout Traditional Layout Customization Storage racks Conveyor Staging Office Shipping and receiving docks © 2011 Pearson Education, Inc. publishing as Prentice Hall 9 - 25

Warehouse Layout Cross-Docking Layout Office Shipping and receiving docks © 2011 Pearson Education, Inc. publishing as Prentice Hall 9 - 26

Fixed-Position Layout u Product remains in one place u Workers and equipment come to site u Complicating factors u Limited space at site u Different materials required at different stages of the project u Volume of materials needed is dynamic © 2011 Pearson Education, Inc. publishing as Prentice Hall 9 - 27

Process-Oriented Layout u Like machines and equipment are grouped together u Flexible and capable of handling a wide variety of products or services u Scheduling can be difficult and setup, material handling, and labor costs can be high © 2011 Pearson Education, Inc. publishing as Prentice Hall 9 - 28

Process-Oriented Layout ER triage room Patient A - broken leg Emergency room admissions Patient B - erratic heart pacemaker Surgery Laboratories Radiology ER Beds Pharmacy Billing/exit Figure 9. 3 © 2011 Pearson Education, Inc. publishing as Prentice Hall 9 - 29

Layout at Arnold Palmer Hospital Pie-shaped rooms Central break and medical supply rooms Local linen supply Central nurses station Local nursing pod © 2011 Pearson Education, Inc. publishing as Prentice Hall 9 - 30

Process-Oriented Layout u Arrange work centers so as to minimize the costs of material handling u Basic cost elements are u Number of loads (or people) moving between centers u Distance loads (or people) move between centers © 2011 Pearson Education, Inc. publishing as Prentice Hall 9 - 31

Process-Oriented Layout n Minimize cost = ∑ n ∑ Xij Cij i=1 j=1 where n = total number of work centers or departments i, j = individual departments Xij = number of loads moved from department i to department j Cij = cost to move a load between department i and department j © 2011 Pearson Education, Inc. publishing as Prentice Hall 9 - 32

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. 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 © 2011 Pearson Education, Inc. publishing as Prentice Hall 9 - 33

Process Layout Example Number of loads per week Department Assembly Painting (1) (2) Assembly (1) 50 Painting (2) Machine Shop (3) Receiving (4) Shipping (5) Machine Receiving Shop (3) (4) Shipping (5) Testing (6) 100 0 0 20 30 50 10 0 20 0 100 50 0 0 Testing (6) Figure 9. 4 © 2011 Pearson Education, Inc. publishing as Prentice Hall 9 - 34

Process Layout Example Area 1 Area 2 Area 3 Assembly Department (1) Painting Department (2) Machine Shop Department (3) 40’ Figure 9. 5 Receiving Department (4) Shipping Department (5) Testing Department (6) Area 4 Area 5 Area 6 © 2011 Pearson Education, Inc. publishing as Prentice Hall 60’ 9 - 35

Process Layout Example Interdepartmental Flow Graph 100 Assembly (1) 50 20 10 50 Receiving (4) Painting (2) 30 Machine Shop (3) 20 100 50 Shipping (5) Testing (6) Figure 9. 6 © 2011 Pearson Education, Inc. publishing as Prentice Hall 9 - 36

Process Layout Example n Cost = ∑ n ∑ Xij Cij i=1 j=1 Cost = $50 + $200 + $40 (1 and 2) (1 and 3) (1 and 6) + $30 + $50 + $10 (2 and 3) (2 and 4) (2 and 5) + $40 + $100 + $50 (3 and 4) (3 and 6) (4 and 5) = $570 © 2011 Pearson Education, Inc. publishing as Prentice Hall 9 - 37

Process Layout Example Revised Interdepartmental Flow Graph 30 Painting (2) 50 10 50 Receiving (4) 50 Assembly (1) 20 Shipping (5) 100 Machine Shop (3) 20 100 Testing (6) Figure 9. 7 © 2011 Pearson Education, Inc. publishing as Prentice Hall 9 - 38

Process Layout Example n Cost = ∑ n ∑ Xij Cij i=1 j=1 Cost = $50 + $100 + $20 (1 and 2) (1 and 3) (1 and 6) + $60 + $50 + $10 (2 and 3) (2 and 4) (2 and 5) + $40 + $100 + $50 (3 and 4) (3 and 6) (4 and 5) = $480 © 2011 Pearson Education, Inc. publishing as Prentice Hall 9 - 39

Process Layout Example Area 1 Area 2 Area 3 Painting Department (2) Assembly Department (1) Machine Shop Department (3) 40’ Figure 9. 8 Receiving Department (4) Shipping Department (5) Testing Department (6) Area 4 Area 5 Area 6 © 2011 Pearson Education, Inc. publishing as Prentice Hall 60’ 9 - 40

Computer Software u Graphical approach only works for small problems u Computer programs are available to solve bigger problems u CRAFT u ALDEP u CORELAP u Factory Flow © 2011 Pearson Education, Inc. publishing as Prentice Hall 9 - 41

CRAFT Example A A A A B B D D D D D E E E C C D D C C D E E F F F D A A A F E E E D A A A F F F TOTAL COST 20, 100 EST. COST REDUCTION ITERATION 0 . 00 (a) TOTAL COST 14, 390 EST. COST REDUCTION ITERATION 3 70 (b) Figure 9. 9 © 2011 Pearson Education, Inc. publishing as Prentice Hall 9 - 42

Computer Software u Three dimensional visualization software allows managers to view possible layouts and assess process, material handling, efficiency, and safety issues © 2011 Pearson Education, Inc. publishing as Prentice Hall 9 - 43

Repetitive and Product. Oriented Layout Organized around products or families of similar high-volume, low-variety products 1. Volume is adequate for high equipment utilization 2. Product demand is stable enough to justify high investment in specialized equipment 3. Product is standardized or approaching a phase of life cycle that justifies investment 4. Supplies of raw materials and components are adequate and of uniform quality © 2011 Pearson Education, Inc. publishing as Prentice Hall 9 - 44

Product-Oriented Layouts u Fabrication line u Builds components on a series of machines u Machine-paced u Require mechanical or engineering changes to balance u Assembly line u Puts fabricated parts together at a series of workstations u Paced by work tasks u Balanced by moving tasks Both types of lines must be balanced so that the time to perform the work at each station is the same © 2011 Pearson Education, Inc. publishing as Prentice Hall 9 - 45

Product-Oriented Layouts Advantages 1. 2. 3. 4. 5. Low variable cost per unit Low material handling costs Reduced work-in-process inventories Easier training and supervision 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 © 2011 Pearson Education, Inc. publishing as Prentice Hall 9 - 46

Mc. Donald’s Assembly Line Figure 9. 12 © 2011 Pearson Education, Inc. publishing as Prentice Hall 9 - 47

Disassembly Lines u Disassembly is being considered in new product designs u “Green” issues and recycling standards are important consideration u Automotive disassembly is the 16 th largest industry in the US © 2011 Pearson Education, Inc. publishing as Prentice Hall 9 - 48

Assembly-Line Balancing u Objective is to minimize the imbalance between machines or personnel while meeting required output u Starts with the precedence relationships u Determine cycle time u Calculate theoretical minimum number of workstations u Balance the line by assigning specific tasks to workstations © 2011 Pearson Education, Inc. publishing as Prentice Hall 9 - 49

Wing Component Example Performance Time Task (minutes) Task Must Follow Task Listed Below A 10 B 11 C 5 D 4 E 12 F 3 G 7 H 11 I 3 Total time 66 © 2011 Pearson Education, Inc. publishing as Prentice Hall — A B B A C, D F E G, H This means that tasks B and E cannot be done until task A has been completed 9 - 50

Wing Component Example Performance Time Task (minutes) Task Must Follow Task Listed Below A 10 B 11 C 5 D 4 E 12 F 3 G 7 H 11 I 3 Total time 66 — A B B A C, D F E G, H 5 10 11 A B 12 E © 2011 Pearson Education, Inc. publishing as Prentice Hall C 4 D 3 7 F G 3 11 I H Figure 9. 13 9 - 51

Wing Component Example Performance Time Task (minutes) A 10 B 11 C 5 D 4 E 12 F 3 G 7 H 11 I 3 Total time 66 480 available mins per day 40 units required Task Must Follow Task Listed Below — A Production time B available per day Cycle B time = Units required per day A = 480 / 40 5 C, D = 12 minutes per unit C F 10 11 3 7 n E for task. Fi A ∑ Time B G Minimum G, H 4 i=1 number of = workstations Cycle Dtime 12 11 3 I = 66 / 12 E H = 5. 5 or 6 stations © 2011 Pearson Education, Inc. publishing as Prentice Hall Figure 9. 13 9 - 52

Heuristics Wing. Line-Balancing Component Example 1. Longest task time Choose the available 480 task available Performance Task Must Follow with the longest task time mins per day Time Task Listed 40 task units required Task 2. Most (minutes) following tasks. Below Choose the available number of= 12 mins A 10 —with the largest. Cycle time B 11 Afollowing tasks. Minimum = 5. 5 or 6 C 3. Ranked 5 positional BChoose the available workstations task for D Bwhich the sum of following weight 4 E 12 Atask times is the longest 5 F 3 C, D the available C task G 4. Shortest 7 task time FChoose 10 shortest 11 3 7 with the task time H 11 E A B G F I 5. Least number 3 G, H 4 of Choose the available task 3 with the least number of Totalfollowing time 66 tasks D I 12 11 following tasks E © 2011 Pearson Education, Inc. publishing as Prentice Hall H Table 9. 4 Figure 9. 13 9 - 53

Wing Component Example Performance Time Task (minutes) 480 available mins per day 40 units required Task Must Follow Task Listed Below A 10 B 11 Station C 52 D 4 11 E 10 12 B F A 3 G 7 H 11 I 3 12 Stationtime 66 Total E 1 — Cycle time = 12 mins A Minimum 5 B = 5. 5 or 6 workstations C B 3 7 A G C, D F 4 3 F D E Station 3 I Station 3 G, H 11 Station 4 © 2011 Pearson Education, Inc. publishing as Prentice Hall H Station 5 Station 6 6 Station Figure 9. 14 9 - 54

Wing Component Example Performance Time Task (minutes) Task Must Follow Task Listed Below 480 available mins per day 40 units required A 10 — Cycle time = 12 mins B 11 A Minimum = 5. 5 or 6 C 5 B workstations D 4 B E 12 A F 3 C, D ∑ Task times G 7 F Efficiency = (Actual number of. Eworkstations) x (Largest cycle time) H 11 I 3 G, H = 66 minutes / (6 stations) x (12 minutes) Total time 66 = 91. 7% © 2011 Pearson Education, Inc. publishing as Prentice Hall 9 - 55