Process Selection and Facility Layout Chapter 6 Learning

Process Selection and Facility Layout Chapter 6

Learning Objective • Compare the four basic processing types • Describe product layouts and their main advantages and disadvantages • Describe process layouts and their main advantages and disadvantages • Develop simple product layouts • Develop simple process layouts

Process Selection • Process selection – Deciding on the way production of goods or services will be organized – Occurs when: • Planning of new products or services • Technological changes in product or equipment • Competitive pressure

Process Selection and System Design Forecasting (demand) Capacity Planning Product and Service Design Technologic al Change Facilities and Equipment Layout Process Selection Work Design

Process Selection Process choice is demand driven: 1. Variety – How much? 2. Volume – Expected output? 3. Standardization 4. Equipment flexibility – To what degree? Process Types • Job shop – Small scale/high variety – e. g. , doctor, tailor • Batch – Moderate volume/moderate variety – e. g. , bakery • Repetitive/assembly line – High volumes of standardized goods or services – e. g. , automobiles • Continuous – Very high volumes of non-discrete goods – e. g. , petroleum products

Types of Processing Repetitive/ Assembly Job Shop Batch Description Customized goods or services Semistandardized goods or services Standardized goods or services Highly standardized goods or services Advantages Able to handle a wide variety of work Flexibility; easy to add or change products or services Low unit cost, high volume, efficient Very efficient, very high volume Moderate cost per unit, moderate scheduling complexity Low flexibility, high cost of downtime Very rigid, lack of variety, costly to change, very high cost of downtime Disadvantages Slow, high cost per unit, complex planning and scheduling Continuous

Product-Process Matrix Flexibility/Variety Volume • The diagonal represents the “ideal” match • Hybrid process are possible (e. g. , job-shop & batch) • Process choice may change as products goes through its life-cycles 6 -7

Process Choice Effects • Activity/ Function Projects Job Shop Batch Repetitive Continuous Cost estimation Simple to complex Difficult Somewhat routine Routine Cost per unit Very high High Moderate Low Equipment used Varied General purpose Special purpose Fixed costs Varied Low Moderate High Very high Variable costs High Moderate Low Very low Labor skills Low to high High Moderate Low to high Marketing Promote capabilities; semistandardized goods and services Promote standardized goods/service s Scheduling Complex, subject to change Complex Moderately complex Routine Project – used for work that is nonroutine with a unique set of objective to be accomplished in a limited time frame. – E. g. , plays, movies, launching a new products, publishing a book, building a dam, building a bridge 6 -8

Product and Service Profiling • Product or service profiling – Linking key product or service requirements to process capabilities – Key dimensions relate to • Range of products or services that can be processed • Expected order sizes • Expected frequency of schedule changes

Technology • Automation – Fixed automation – Programmable automation • Computer-aided manufacturing • Numerically Controlled machines – Flexible automation • Flexible manufacturing systems (FMS): A group of machines designed to handle intermittent processing requirements and produce a variety of similar products • Computer-integrated manufacturing (CIM) – A system for linking a broad range of manufacturing activities through an integrating computer system

New Process Trend �HBR 12/6/12 Three Examples of New Process Strategy �There are three fundamental ways that companies can improve their processes in the coming decade: 1. expand the scope of work managed by a company to include customers, suppliers, and partners; – Shift to global, virtual, cross-organizational teams of specialized entities that are knitted together to serve customers – To keep such a multiparty system from degenerating into chaos, virtual process teams must have aligned goals and support systems. 2. target the increasing amount of knowledge work; and – Big data analytics – Crowdsourcing, e. g. , mechanical turk, innocentive. com, Top. Coder. com & Heritage Health Prize » HBR : Using the Crowd as an Innovation Partner 3. reduce cycle times to durations previously considered impossible – Agile processes – Managers must speed the flow of information so that decisions can be made faster at all levels, from top to bottom.

Facilities Layout • Layout – The configuration of departments, work centers, and equipment, with particular emphasis on movement of work (customers or materials) through the system – Facilities layout decisions arise when: • Designing new facilities • Re-designing existing facilities – The basic objective of layout design is to facilitate a smooth flow of work, material, and information through the system.

Basic Layout Types • Product layout – – Layout that uses standardized processing operations to achieve smooth, rapid, high-volume flow. The work is divided into a series of standardized tasks, permitting specialization of equipment and division of labor. • Process layout – – Layout that can handle varied processing requirements The variety of jobs that are processed requires frequent adjustments to equipment • Fixed position layout – Layout in which the product or project remains stationary, and workers, materials, and equipment are moved as needed • Combination layouts

Product Layouts • Product layout – – – Layout that uses standardized processing operations to achieve smooth, rapid, high-volume flow E. g. , production line or assembly line How? Raw materials or customer Material and/or labor Station 1 Material and/or labor Station 2 Material and/or labor Station 3 Station 4 Material and/or labor Used for Repetitive Processing Repetitive or Continuous Finished item

Product Layouts • Although product layouts often follow a straight line, a straight line is not always the best, and layouts may take an L, O, S, or U shape. Why? – – L: O: Image source: mdcegypt. com S: U: more compact, increased communication facilitating team work, minimize the material handling

Product Layouts Advantages • High rate of output • Low unit cost • Labor specialization • Low material handling cost per unit • High utilization of labor and equipment • Established routing and scheduling • Routine accounting, purchasing, and inventory control Disadvantages �Creates dull, repetitive jobs �Poorly skilled workers may not maintain equipment or quality of output �Fairly inflexible to changes in volume or product or process design �Highly susceptible to shutdowns �Preventive maintenance, capacity for quick repair and spare-parts inventories are necessary expenses �Individual incentive plans are impractical

Non-repetitive Processing: Process Layouts • Process layouts – Layouts that can handle varied processing requirements – E. g. , machine shop: milling, grinding, drilling, etc. Dept. A Dept. C Dept. E Dept. B Dept. D Dept. F Used for Intermittent processing Job Shop or Batch

Process Layouts Advantages • Can handle a variety of processing requirements • Not particularly vulnerable to equipment failures • General-purpose equipment is often less costly and easier and less costly to maintain • It is possible to use individual incentive systems Disadvantages • In-process inventories can be high • Routing and scheduling pose continual challenges • Equipment utilization rates are low • Material handling is slow and less efficient • Complicates supervision • Special attention necessary for each product or customer • Accounting, inventory control, and purchasing are more complex

Fixed Position Layouts • Fixed Position Layout – Layout in which the product or project remains stationary, and workers, materials, and equipment are moved as needed – E. g. , farming, firefighting, road building, home building, remodeling and repair, and drilling for oil

Combination Layouts • Some operational environments use a combination of the three basic layout types: – Hospitals – Supermarket – Shipyards • Some organizations are moving away from process layouts in an effort to capture the benefits of product layouts

Line Balancing �Line balancing �The process of assigning tasks to workstations in such a way that the workstations have approximately equal time requirements �Goal: �Obtain task grouping that represent approximately equal time requirements since this minimizes idle time along the line and results in a high utilization of equipment and labor �Why is line balancing important? 1. 2. It allows us to use labor and equipment more efficiently. To avoid fairness issues that arise when one workstation must work harder than another. – Input • Tasks sequencing (precedence diagram) • Tasks time • Operating time

Precedence Diagram • Precedence diagram – A diagram that shows elemental tasks and their precedence requirements Task Duration Immediate (min) predecessor a Select material 0. 1 - b Make petals 1. 0 a c Select rhinestones 0. 7 - d Glue rhinestones 0. 5 b, c e Package 0. 2 d

Cycle Time • Cycle time – The maximum time allowed at each workstation to complete its set of tasks on a unit (depending on the number of workstations) • Minimum Cycle Time = longest task time = 1. 0 min • Maximum Cycle time = Σt = sum of task time = 2. 5 min

Output rate of a line • Cycle time also establishes the output rate of a line Output rate = Operating time per day Cycle time • The cycle time is generally determined by the desired output. Cycle time = Operating time per day Desired output rate

How Many Workstations are Needed? • The required number of workstations is a function of: – Desired output rate – The ability to combine tasks into a workstation • (theoretical) Minimum number of stations Nmin= ∑t Cycle time where Nmin = theoretical minimum number of stations ∑ t = sum of task times

How Many Workstations are Needed? • The required number of workstations is a function of: – Desired output rate – The ability to combine tasks into a workstation Q: Why this is a theoretical value? A: There are often scraps or idle times. • (theoretical) Minimum number of stations Example: ∑ tto finish 4 tasks, each require 6 hours Nmin= A station can handle 8 hours of tasks a day. Cycle amount time You will need 4 stations to complete all tasks, instead of 3. where Nmin = (6+6+6+6) / 8 = 3 Nmin = theoretical minimum number of stations ∑ t = sum of task times

Designing Product Layouts �Some Heuristic (Intuitive, may not result in optimal solution) Rules: �Assign tasks in order of most following tasks �Count the number of tasks that follow �Assign tasks in order of greatest positional weight. � Positional weight is the sum of each task’s time and the times of all following tasks.

Example: Assembly Line Balancing • Arrange tasks (shown in the figure) into three workstations – Assume the cycle time of each workstation is 1. 2 min. – Assign tasks in order of the most number of followers – Break tie using greatest positional weight

• Assign tasks in order of the most number of followers Time Workstation Remaining 1 2 3 Start with CT (1. 2 min. in this example) 1. 2 Eligible a, c Revised Assign Time Task Remaining Station Idle Time

• Assign tasks in order of the most number of followers Time Workstation Remaining 1 2 3 1. 2 Eligible Revised Assign Time Task Remaining a, c a 1. 1 Station Idle Time

Time Workstation Remaining 1 2 3 1. 2 1. 1 Eligible a, c c, b Revised Assign Time Task Remaining a 1. 1 Station Idle Time

Time Workstation Remaining 1 2 3 Break tie using greatest positional weight 1. 2 1. 1 Eligible Revised Assign Time Task Remaining a, c c, b a b 1. 1 0. 1 Station Idle Time

Time Workstation Remaining 1 2 3 1. 2 1. 1 0. 1 Eligible a, c c, b c Revised Assign Time Task Remaining a b 1. 1 0. 1 Station Idle Time

Time Workstation Remaining 1 1. 2 1. 1 0. 1 2 3 Can’t assign c to this workstation because the workstation doesn’t have enough time (0. 1) to complete c (0. 7). Eligible Revised Assign Time Task Remaining a, c c, b c a b - Station Idle Time 1. 1 0. 1

Eligible Revised Assign Time Task Remaining 1. 2 1. 1 0. 1 a, c c, b c a b - 1. 1 0. 1 1. 2 c c 0. 5 Time Workstation Remaining 1 2 3 Start with CT (1. 2 min. in this example) Station Idle Time 0. 1

Eligible Revised Assign Time Task Remaining 1. 2 1. 1 0. 1 a, c c, b c a b - 1. 1 0. 1 1. 2 0. 5 c d 0. 5 0 Time Workstation Remaining 1 2 3 Station Idle Time 0. 1 0

Eligible Revised Assign Time Task Remaining 1. 2 1. 1 0. 1 a, c c, b c a b - 1. 1 0. 1 1. 2 0. 5 c d 0. 5 0 1. 2 e e 1 Time Workstation Remaining 1 2 3 Station Idle Time 0. 1 0. 0 1. 0 Start with CT (1. 2 min. in this example)

Eligible Revised Assign Time Task Remaining 1. 2 1. 1 0. 1 a, c c, b c a b - 1. 1 0. 1 1. 2 0. 5 c d 0. 5 0 1. 2 e e 1 Time Workstation Remaining 1 2 3 Station Idle Time 0. 1 0. 0 1. 0 Idle time per cycle =0. 1+0. 0+1. 0=1. 1

Layout a&b c&d e (0. 1+1. 0) (0. 7+0. 5) (0. 2) Task Duration Immediate (min) predecessor a Select material 0. 1 - b Make petals 1. 0 a c Select rhinestones 0. 7 - d Glue rhinestones 0. 5 b, c e Package 0. 2 d

Measuring Effectiveness • Balance delay (percentage of idle time) – Percentage of idle time of a line Balance Delay = Idle time per cycle Nactual × Cycle time where Nactual = actual number of stations • Efficiency – Percentage of busy time of a line Efficiency = 100% − Balance Delay × 100%

Example: Measuring Effectiveness Eligible Revised Assign Time Task Remaining 1. 2 1. 1 0. 1 a, c c, b c a b - 1. 1 0. 1 1. 2 0. 5 c d 0. 5 0 1. 2 e e 1. 0 Time Workstation Remaining 1 2 3 Station Idle Time 0. 1 0. 0 1. 0 Percentage of idle time = [(0. 1 + 0 + 1. 0) ÷ (3 × 1. 2)] × 100% = 30. 55% Efficiency = 100% – 30. 55% = 69. 45%

Exercise �(Textbook page 267) Using the information contained in the table shown, do each of the following: 1. Draw a precedence diagram. 2. Assuming an eight-hour workday, compute the cycle time needed to obtain an output of 400 units per day. 3. Determine the minimum number of workstations required. 4. Assign tasks to workstations using this rule: Assign tasks according to greatest number of following tasks. In case of a tie, use the tiebreaker of assigning the task with the longest processing time first. 5. Compute the resulting percent idle time and efficiency of the system

Solution 1. Draw a precedence diagram

Example: Measuring Effectiveness 2. Assuming an eight-hour workday, compute the cycle time needed to obtain an output of 400 units per day Cycle time = Operating time per day Desired output rate = 480 minutes per day 400 units per day = 1. 2 minutes per cycle

Example: Measuring Effectiveness 3. Determine the minimum number of workstations required ∑t 3. 8 minutes per unit = 3. 17 stations Nmin= = 1. 2 minutes per cycle Cycle time ( round to 4) time per station where Nmin = theoretical minimum number of stations ∑ t = sum of task times

Example: Measuring Effectiveness 4. Assign tasks to workstations using this rule: Assign tasks according to greatest number of following tasks. In case of a tie, use the tiebreaker of assigning the task with the longest processing time first.

Example: Measuring Effectiveness 5. Compute the resulting percent idle time and efficiency of the system Percent idle time = Idle time per cycle Nactual × Cycle time = 1. 0 min. 4 × 1. 2 min. = 20. 83% × 100%

Designing Process Layouts • The main issue in designing process layouts concerns the relative placement of the departments • Measuring effectiveness – key objectives in designing process layouts are to minimize: • transportation cost • distance • time

Information Requirements • In designing process layouts, the following information is required: 1. A list of work stations (departments) to be arranged and their dimensions 2. A projection of future work flows between the pairs of work centers 3. The distance between locations - and the cost per unit of distance to move loads between them 4. The amount of money to be invested in the layout 5. A list of any special considerations 6. The location of key utilities, access and exit points, etc.

• Goal: Designing Process Layouts Minimize Transportation Costs – Assign departments 1, 2, 3 to locations A, B, C in a way that minimizes transportation costs. A • Heuristic: B C – Assign departments with the greatest interdepartmental work flow first to locations that are closet to each other.

Example: Minimize Transportation Costs Distance 40 Location Trip FromTo A B C A-B 20 A - 20 40 B-C 30 - 30 A-C 40 B C Closest - Pair Work flow FromTo 1 2 3 1 -3 170 1 - 30 170 2 -3 100 - 100 1 -2 30 2 3 - 20 B 30 Place dept. 1&3 in A&B Work flow Department A Highest work flow C

Example: Minimize Transportation Costs 40 • Place departments 1&3 in A&B (2 options) 1 A 3 B 3 C A 1 B C • 2&3 have higher work flow than 1&2 (100>30) • 2&3 should be located closer than 1&2 • C closer to B than to A (30<40) • Solution: 30 1 A 170 3 B 100 2 C A 20 Trip B 30 C Pair Work flow A-B 20 1 -3 170 B-C 30 2 -3 100 A-C 40 1 -2 30

Closeness Ratings (Relationship Diagramming) • Allows the considerations of multiple qualitative criteria. • Input from management or subjective analysis. • Indicates the relative importance of each combination of department pairs. Muther’s grid

Closeness Ratings Production Offices Stockroom Shipping and receiving Locker room Toolroom O U A U O A O U O A E I O U X I X O E U Absolutely necessary Very important Important Ordinary importance Unimportant Undesirable A

Closeness Ratings : Example Dept. 1 Dept 2. Dept 3. Dept 4. Dept. 5 Dept 6. A E X O A A U A A X I X U A O Assign department using the heuristic: Assign critical departments first (they are most important)

Closeness Ratings : Example 1. List critical departments (either A or X): Dept. 1 A X 1 -2 1 -4 Dept 2. 1 -3 3 -6 Dept 3. 2 -6 3 -4 Dept 4. 3 -5 4 -6 5 -6 Dept. 5 Dept 6. A A E X U U X O I A A O X A A

Closeness Ratings : Example 2. Form a cluster of A links (beginning with the department that appears most frequently) 4 2 6 A 1 -2 Dept. 1 1 -3 Dept 2. 2 -6 3 -5 Dept 3. 4 -6 Dept 4. 5 -6 Dept. 5 5 3. Take the remaining A links in order and add them to this cluster where possible (rearranging as necessary) Form separate clusters for departments that do not link with the main cluster. A A E X U U X O I A A O X A A Dept 6. 4 2 1 6 5 3

Closeness Ratings : Example 4. Graphically portray the X links 1 3 4 6 5. Adjust A cluster as necessary. (in this case, the A cluster also satisfies the X cluster). X 1 -4 Dept. 1 3 -6 Dept 2. 3 -4 A A E X U U X O I A A O X A A Dept 3. Dept 4. Dept. 5 Dept 6. 4 2 1 6 5 3

Closeness Ratings : Example 4 2 Dept. 1 6 1 5 1 3 3 4 6 6. Fit cluster into arrangement (e. g. , 2 x 3) may require some trial and error. Departments are considered close not only when they touch side to side but also when they touch corner to corner. 1 2 6 3 5 4 7. Check for possible improvements Dept 2. Dept 3. Dept 4. Dept. 5 Dept 6. A A E X U U X O I A A O X A A