Facilities Layout

Facilities Layout
Layout: the configuration of departments, work centers, and equipment, with particular emphasis on movement of work (customers or materials) through the system
Product layouts Process layouts Fixed-Position layout

Objective of Layout Design

Facilitate attainment of product or service quality

Use workers and space efficiently

Minimize unnecessary material handling costs

Eliminate unnecessary movement of workers or materials

Minimize production time or customer service time

Design for safety

Importance of Layout Decisions

Requires substantial investments of money and effort Involves long-term commitments Has significant impact on cost and efficiency of short-term operations

The Need for Layout Decisions

Inefficient operations
Changes in the design of products or services

Accidents
The introduction of new products or services

Safety hazards

The Need for Layout Design (Contd)

Changes in environmental or other legal requirements Changes in volume of output or mix of products Morale problems

Changes in methods and equipment

6-6

Basic Layout Types

Product layouts
Process layouts Fixed-Position layout

Basic Layout Types

Product layout
Layout

that uses standardized processing operations to achieve smooth, rapid, high-volume flow that can handle varied processing requirements in which the product or project remains stationary, and workers, materials, and equipment are moved as needed

Process layout
Layout

Fixed Position layout

Layout

Product Layout

Raw materials or customer

Material and/or labor

Station 1 Material and/or labor

Station 2
Material and/or labor

Station 3
Material and/or labor

Station 4

Finished item

Used for Repetitive Processing

Product Layout
Product Layout (sequential)
Work Station 1 Work Station 2 Work Station 3

Used for Repetitive Processing

Advantages of Product Layout

High rate of output Low unit cost Labor specialization Low material handling cost High utilization of labor and equipment Established routing and scheduling

Disadvantages of Product Layout

Creates dull, repetitive jobs Poorly skilled workers may not maintain equipment or quality of output Fairly inflexible to changes in volume Highly susceptible to shutdowns Needs preventive maintenance Individual incentive plans are impractical

A U-Shaped Production Line

In

4 5

Workers

6
Out

10

Process Layout

Dept. A Dept. B

Dept. C Dept. D

Dept. E Dept. F

Advantages of Process Layouts

Can handle a variety of processing requirements Not particularly vulnerable to equipment failures Equipment used is less costly Possible to use individual incentive plans

Disadvantages of Process Layouts

In-process inventory costs can be high Challenging routing and scheduling Equipment utilization rates are low Complexities often reduce span of supervision Special attention for each product or customer

Fixed Position Layouts

Fixed Position Layout: Layout in which the product or project remains stationary, and workers, materials, and equipment are moved as needed. Nature of the product dictates this type of layout
Weight Size Bulk

Large construction projects

Functional vs. Cellular Layouts

Dimension Functional Cellular

Number of moves between departments

Travel distances Travel paths

many
longer variable

few
shorter fixed

Job waiting times Throughput time

Amount of work in process Supervision difficulty

greater higher
higher higher

shorter lower
lower lower lower

Scheduling complexity higher

Equipment utilization

lower

higher

Design Product Layouts: Line Balancing

Line Balancing is the process of assigning tasks to workstations in such a way that the workstations have approximately equal time requirements.

Cycle Time

Cycle time is the maximum time allowed at each workstation to complete its set of tasks on a unit.

Determine Maximum Output

OT Output rate = CT OT operating time per day D = Desired output rate OT CT = cycle time = D

Determine the Minimum Number of Workstations Required

( t) CT task time

N=

t = sum of

Precedence Diagram
Precedence diagram: Tool used in line balancing to display elemental tasks and sequence requirements
0.1 min. 1.0 min.

a c
0.7 min.

b d
0.5 min.

A Simple Precedence Diagram

e
0.2 min.

Calculate Percent Idle Time

Idle time per cycle Percent idle time = (N)(CT)

Efficiency = 1 Percent idle time

Using information contained in each of the following, do each of the following: 1. Draw a precedence dia. 2. Assuming an 8 hour workday. Compute the cycle time needed to obtain an output of 400 units per day 3. Determine the minimum number of workstations required

Task

Immediate follower

Task time in Minutes

A
B C D E F G H

B
E D F F G H end

.2
.2 .8 .6 .3 1 .4 .3

Precedence Diagram
e
0.2 0.2 0.3

a
0.8

c
0.6

f
1.0

g
0.4

h
0.3

. 3 min

. 4 min

. 2 min

. 1 min

. 5 min

. 3 min

b
. 6 min

d
1.2 min

f
.6 min

Station 1

Station 2

Station 3

Station 4

a
c

e f d

Parallel Workstations
Parallel Workstations are used to achieve a smooth flow of production. These are beneficial for bottleneck operations which would otherwise disrupt the flow of product as it moves down the line.

The bottleneck may be the result of parallel or very long tasks. Parallel workstations increases the work flow and provide flexibility

Bottleneck Workstation

1 min.

30/hr.

1 min.

30/hr.

2 min.

30/hr.

1 min.

30/hr.

Bottleneck

Parallel Workstations

30/hr. 1 min. 60/hr. 1 min. 30/hr.

2 min.

30/hr. 1 min.

60/hr.

2 min.

30/hr.

Parallel Workstations

Cases

Case Study 1: Professor Lalu scripts Indian Railways Turnaround

Case Study 2: Hondas Mixed Model Assembly Lines

Johnsons Rule
A technique for minimizing completion time for a group of jobs to be processed on two machines

Johnsons Rule Conditions

Job time must be known and constant Jobs must follow same two-step sequence

All units must be completed at the first work center before moving to second

Johnsons Rule Optimum Sequence

1.List the jobs and their times at each work center 2.Select the job with the shortest time 3.Eliminate the job from further consideration 4.Repeat steps 2 and 3 until all jobs have been scheduled

Example
Time on machine A Job 1 Job 2 Job 3 Job 4 Job 5 10 5 4 12 9 Time on machine B 2 7 10 8 6

Problems

1. The time required to complete each of the 8 jobs in a 2 machine flow shop are shown in the table that follows on the next slide. Each job must follow the same sequence. Beginning with machine A and moving to machine B.
A. Determine a sequence that will minimize a Makespan time B. Construct a chart of resulting sequence and find machine Bs idle time

Time in Hours Job A B C D E F G H Machine A 16 3 9 8 2 12 18 20 Machine B 5 13 6 7 14 4 14 11

2. Precision machining provides custom machining for its customers. The company presently uses a first come first served sequencing rule for customer jobs. Because the company wants to finish customer jobs faster, it is considering 2 other rules : shortest processing time and critical ratio. The company thinks that these criteria are important in selecting a sequencing rule: average flow time, average number of jobs in the system, and average job lateness. Study precisions situation and recommend a sequencing rule.
Pl see the Table on next page

Job Sequence

Production time(hrs)

Time to promised delivery ( hrs)

A B

2 5

4 18

C
D E

3
4 6

8
4 20

24

Case

6-46

a. Draw a precedence diagram b. Assuming that 55 minutes per hour are productive, compute the cycle time required to obtain 50 units per hour c. Determine the minimum number of workstations d. Assign tasks to workstations e. Find idle time and percent efficiency

4. Determine the placement of departments for a newly designed facility that will minimize total transportation costs using data in the following tables. Assume that reverse distances are the same. The locations are shown in the grid. Use a cost of $1 trip yard

Location A

Location B

Location C

Location D

4 contd.
Distance between location yards To A B C D Number of trips per day Between departments

To

From
A B 40 80 40 70 50

From
1 2 3 10 20 40 80 90 55

C
D

60
-

5 Five departments are to be assigned to locations B-F in the grid (For technical reasons deptt. 6 must be assigned to location A). Transportation costs is $2 per foot. The objective is to minimize total transportation cost. Information on interdepartmental work flows and distances between locations is shown in the following tables. Assign departments with the greatest interdepartmental work flow first.
See related tables in the next slides

Distance between locations (feet)

From
A B C D E F

To

A
-

B
50 -

C
100 50 -

D
50 90 140 -

E
80 40 60 50 -

F
130 70 50 120 50 -

Number of trips per day between centers

From
1 2 3 4 5 6

To

1
-

2
125 -

3
62 10 -

4
64 17 2 -

5
25 26 0 13 -

6
50 54 20 2 5 -

A Dept 6

MRP and ERP Problems

How does the purpose of ERP differ from MRP II

If seasonal variations are present, is their incorporation into MRP fairly simple or fairly difficult. Explain briefly

What is the difference between planned order receipts and scheduled receipts

Briefly describe MRP-II and closed loop MRP

What is the major limitation of MRP

What are the major requirements for an effective MRP

How is safety stock included in MRP

Problem

E M (3) I (2)

R (2)

N (4)

Problem
Given the following production schedule in units and the production standards for labor and machine time for this product, determine the labor and machine capacity requirements for each week. Then compute the percent utilization of labor and machines in each week if labor capacity is 200 hours per week and machine capacity is 250 hours per week.
Production Schedule: Week 1 2 Quantity 200 300 Standard Times . Labor .5 hour/unit Machine 1.0 hour/unit

3 100

4 . 150

Develop a Material Requirements plan for component H. Lead times for the end item and each component except B are 1 week. The LT for B is 3 weeks. Sixty units of A are required at the start of week 8. There are currently 15 units of B on hand and 130 units of E on hand, and 50 units of H are in production and will be completed by the start of week 2.

B (2)

C (4)

D (2)

E (2)

D (3)

G (2)
D

Problem
Balance system: Distributing the workload evenly among work stations Work assigned to each work station must be less than or equal to the cycle time Cycle time is set equal to the takt time Takt time is the cycle time needed to match customer demand for final product

Using Closeness Ratings to Develop Service Facility Layouts

Typical Closeness Ratings

Closeness Rating 1 2 3 4 5 6

Meaning of Rating Necessary Very Important Important Slightly Important Unimportant Undesirable

Example: AG Advertising
Using Closeness Ratings AG Advertising is moving into a new office suite having seven large, roughly equal size rooms, one for each department of the firm. Lisa, the manager, must now assign each department to a room. She has developed a grid of closeness ratings (on the next slide) for the 21 unique pairs of departments.

, one for each department of the firm. Lisa, the manager, must now assign each department to a room. She has developed a

Example: AG Advertising
A

5
B C D E F G

6 4

6 3

1
4 5

2
1 1

4
2 3

5
2

Example: AG Advertising
Unassigned Rooms of Office Suite

Example: AG Advertising
Layout Satisfying All Pairings of Departments with 1 Closeness Ratings

CR = 1

CR = 1 BD B-D B-F BF C-G CG

B F

D C G

Trying to satisfying all pairings of departments with 6 closeness ratings, we see that Dept. C needs to be moved

CR = 6 CR = 1 B-D B-F C-G

B F

D G C

A-D B-C B-G

Layout Satisfying All Pairings of Departments with 6 Closeness Ratings (note that we swapped Dept. D and Dept. F)

CR = 6 CR = 1 B-D B-F C-G

B D

F E

A G C

A-D B-C B-G

Procedure for setting Takt time

Takt time is often set for a work shift. The procedure for obtaining the takt time is: 1. Determine the net time available per shift by subtracting any non productive time from total shift time 2. If there is more than one shift per day, multiply the net time per shift by the number of shifts to obtain the net available time per day

3. Compute takt time by dividing the net available time by demand

Problem
Given the following information, compute the takt time: Total time per shift is 480 minutes per day, and there are 2 shifts per day. There are 40 minutes rest breaks and a 30 minutes lunch break per shift.

Daily demand is 80 units.

1. Compute net available time per shift:

Total time 480 minutes Rest breaks -40 minutes Lunch -30 minutes = 410 minutes per shift 2. Compute the net available per day 410 minutes per shift * 2 shifts / day = 820 minutes per day 3. Compute the takt time = Net time available per day / daily demand =

820 min per day / 80 units per day = 10.25 minutes per cycle

Usage at each work center is 300 parts per day, and a standard container holds 25 parts. It takes an average of .12 day for a container to complete a circuit from the time a Kanban card is received until the container is returned empty. Compute the number of Kanban cards required if X = .20

N=? D = 300 parts per day T = .12 day C = 25 parts per container X = .20 N= 300 (.12)(1+.20) / 25 = 1.728 = 2

Determine the number of containers needed for a work station that uses 100 parts per hour if the time for a container to complete a cycle (move, wait, energy, wait, return) is equal to 90 minutes and a standard container holds 84 parts. An inefficiency factor of .10 is currently being used

Housekeeping
Maintaining a workplace that is clean and free of unnecessary materials. What are 5 important S

 Sort
Straighten

Sweep
Standardize

Self Discipline

Autonomation and Jidoka

Capacity Planning

Capacity is the upper limit or ceiling on the load that an operating unit can handle. Capacity also includes
Equipment Space Employee skills

The basic questions in capacity handling are:

What kind of capacity is needed? How much is needed When it is needed

Importance of Capacity Decisions

Impacts ability to meet future demands Affects operating costs Major determinant of initial costs Involves long-term commitment Affects competitiveness Affects ease of management Globalization adds complexity Impacts long range planning

Capacity
Design capacity
maximum output rate or service capacity an operation, process, or facility is designed for

Effective capacity
Design capacity minus allowances such as personal time, maintenance, and scrap

Actual output
rate of output actually achieved--cannot exceed effective capacity

Efficiency and Utilization

Determinants of Effective Capacity

Facilities Products and Service Factors Process Factors Human Factors Policy Factors Operational Factors Supply Chain Factors External Factors

Strategy Formulation
Capacity strategy for long-term demand Demand patterns Growth rate and variability Facilities Cost of building and operating Technological changes Rate and direction of technology changes Behavior of competitors Availability of capital and other inputs

Key Decisions of Capacity Planning

1. Amount of capacity needed Capacity cushion (100% - Utilization) 2. Timing of changes 3. Need to maintain balance 4. Extent of flexibility of facilities

Steps for Capacity Planning

1.Estimate future capacity requirements 2.Evaluate existing capacity 3. Identify alternatives 4. Conduct financial analysis 5.Assess key qualitative issues 6.Select one alternative 7. Implement alternative chosen 8.Monitor results

Forecasting Capacity Requirements

Long-term vs. short-term capacity needs Long-term relates to overall level of capacity such as facility size, trends, and cycles Short-term relates to variations from seasonal, random, and irregular fluctuations in demand

Calculating Processing Requirements

If annual capacity is 2000 hours, then we need three machines to handle the required volume: 5,800 hours/2,000 hours = 2.90 machines

Planning Service Capacity

Need to be near customers Capacity and location are closely tied Inability to store services Capacity must be matched with timing of demand Degree of volatility of demand Peak demand periods

Developing Capacity Alternatives

1.Design flexibility into systems 2.Take stage of life cycle into account 3.Take a big picture approach to capacity changes 4.Prepare to deal with capacity chunks 5.Attempt to smooth out capacity requirements 6.Identify the optimal operating level

Bottleneck Operation

Bottleneck Operation

Economies of Scale
Economies of scale
If the output rate is less than the optimal level, increasing output rate results in decreasing average unit costs

Diseconomies of scale
If the output rate is more than the optimal level, increasing the output rate results in increasing average unit costs

Optimal Rate of Output

Evaluating Alternatives
Cost-volume analysis Break-even point Financial analysis Cash Flow Present Value Decision theory Waiting-line analysis

Cost Volume analysis

TC = FC + VC VC = Q *v (Variable cost p.u.) TR = R*Q P = TR TC= R*Q (FC + v *Q) Re arranging terms, we have P = Q (R v) FC R-v = Difference between revenue per unit and the contribution Margin Q = (P + FC) / (R-v), QBEP = FC / (R-v)

Assumptions of Cost Volume Analysis

1. One product is involved 2.Everything produced can be sold 3.Variable cost per unit is the same regardless of volume 4.Fixed costs do not change with volume 5.Revenue per unit constant with volume 6.Revenue per unit exceeds variable cost per unit

Financial Analysis
Cash Flow - the difference between cash received from sales and other sources, and cash outflow for labor, material, overhead, and taxes. Present Value - the sum, in current value, of all future cash flows of an investment proposal.

Decision Theory
Helpful tool for financial comparison of alternatives under conditions of risk or uncertainty Suited to capacity decisions

Waiting Line Analysis

Useful for designing or modifying service systems Waiting-lines occur across a wide variety of service systems

Waiting-lines are caused by bottlenecks in the process

Helps managers plan capacity level that will be cost-effective by balancing the cost of having customers wait in line with the cost of additional capacity