Operations Management Layout Strategy 1 What is Facility

Operations Management Layout Strategy 1

What is Facility Layout l Location or arrangement of everything within & around buildings l Determines long-run efficiency of operations l Helps achieve a strategy that supports differentiation, low cost or quick response 2

Strategic Importance of Layout Proper layout enables: l Higher utilization of space, equipment and people l Improved flow of information, materials, or people l Improved employee morale and safer working conditions l Improved customer/client interaction l Flexibility to change--use small, movable or 3

Layout Strategies l Office layout l positions workers, their equipment, and spaces/offices to provide for movement of communication and information l Retail/service layout l allocates shelf space and responds to customer behavior l Warehouse layout l addresses trade-offs between space and material handling 4

Seven Layout Strategies l Fixed-position layout l l large bulky projects such as ships and buildings Process-oriented layout l deals with low-volume, high-variety production (“job shop”, intermittent production) l Product-oriented layout l seeks the best personnel and machine use in repetitive or continuous production, line balancing 5

Office Layout Design positions people, equipment, & offices for maximum people and information flow, comfort and safety l Relationship chart used l Examples l l l Banks Software company 6

Office Layout Floor Plan Finance Accounting Fin. Manager Acct. Brand X 7

Retail/Service Layout Design maximizes product exposure to customers l Decision variables l l l Store flow pattern Allocation of (shelf) space to products 8

Retail Layouts Some Rules of Thumb Locate high-draw items around the periphery of the store l Use prominent locations such as the first or last aisle for high-impulse and high margin items l Distribute “power items” (items that may dominate a shopping trip) to both sides of an aisle, and disperse them to increase the viewing of other items l Use end aisle locations because they have a very high exposure rate l 9

A Good Service Layout Considers l Ambient conditions - background characteristics such as lighting, sound, smell, and temperature. l Spatial layout and functionality - which involve customer circulation path planning l Signs, Symbols, and Artifacts characteristics of building design that carry significance 10

Warehouse Layout l Design balances between space utilization & handling cost l Similar to process layout l l Items moved between dock & various storage areas Optimum layout depends on l Variety of items stored l Number of items picked 11

Fixed-Position Layout l Design is for stationary project l Workers and equipment come to site l Complicating factors l Limited space at site l House, shipyard etc…. 12

Process-Oriented Layout l Design places departments with large flows of material or people together l Department areas having similar processes located in close proximity l l e. g. , All x-ray machines in same area Supports process-focused strategy i. e. product differentiation stategy 13

Emergency Room Layout rg er y Triage room Patient A broken leg E. R. Admissions Su Patient B – heart problems Labs Ra dio log y E. R. beds Pharmacy Billing/e xit 14

Product-Oriented Layout Facility organized around product l Design minimizes line imbalance l l l Delay between work stations Types: Fabrication line; assembly line 15

Steps in Developing a Process-Oriented Layout 1 2 3 4 5 6 Construct a “from-to matrix” Determine space requirements for each department Develop an initial schematic diagram Determine the cost of this layout By trial-and-error (or more sophisticated means), try to improve the initial layout Prepare a detailed plan that evaluates factors in addition to transportation cost

Cost of Process-Oriented Layout

Interdepartmental Flow of Parts 1 1 2 3 4 5 6 2 3 4 5 50 6 100 0 0 20 30 50 10 0 20 0 100 50 0 0

Interdepartmental Flow Graph Showing Number of Weekly Loads 100 1 50 2 30 3 20 50 4 10 50 5 20 100 6

Possible Layout 1 Room 2 Assembly Printing Machine Shop Department (1) (2) (3) Receiving Shipping Testing Department (4) Room 4 (5) Room 5 60’ (6) Room 6 40’

Interdepartmental Flow Graph Showing Number of Weekly Loads 30 2 2 2 1 1 50 100 20 50 3 20 10 4 50 5 6

Possible Layout 3 Room 1 Room 2 Painting Assembly Machine Shop Department (2) (1) Room 2 (3) Receiving Shipping Testing Department (4) Room 4 (5) Room 5 60’ (6) Room 6 40’

Assembly Line Balancing Analysis of production lines l Nearly equally divides work between workstations while meeting required output l Objectives l l l Maximize efficiency Minimize number of work stations

Assembly Line Balancing The General Procedure Determine cycle time by taking the demand (or production rate) per day and dividing it into the productive time available per day l Calculate theoretical minimum number of work stations by dividing total task time by cycle time l Perform the line balance and assign specific assembly tasks to each work station l

Assembly Line Balancing Steps 1. 2. 3. 4. 5. 6. 7. 8. Determine tasks (operations) Determine sequence Draw precedence diagram Estimate task times Calculate cycle time Calculate number of work stations Assign tasks Calculate efficiency

Precedence Diagram Example 10 Min. 11 A B C 4 5 3 7 3 F G I D 12 E 11 H

Assembly Line Balancing Equations Cycle time Minimum number of work stations Efficiency = Production time available Demand per day Task times = = Cycle time Task times (Actual number * (Cycle time) of work stations)

Cycle time calc. On the basis of precedence diagram and activity times given above, the firm determines that there are 480 productive minutes of work available per day. Furthermore, production schedule requires that 40 units be completed as output from the assembly line each day. l Cycle time: 480/40=12 minutes per unit l Min no. of workstations: 66/12=5. 5 or 6 l

Six Station Solution 5 C 10 A 11 B 3 7 F G 3 I D 12 11 E H