facilities planning notes

7/28/2019 Facilities Planning Notes

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Thursday, March 07, 2013 Industrial Engineering 1

Facilities Planning

Chapter 2

2

Facilities Planning Hierarchy

Facilities

Planning

Facilities

Location

Facilities

Design

Structural

Design

Layout

Design

Handling System

Design

Location A place (position) of allocating the facilities, buildings, equipment etc

Layout - The way that something is physically arranged (space of material

handling, storage, labor, support activity & services and equipment)


Facilities Design

Structure design: building and support services -

gas, water, light, air,

Layout design: space requirements and location

of resources in available space.

Handling system design: movement of material,

people, information and equipment.


Let us think

What is the importance of facilitiesplanning??


Importance of facilities planning

Reasons for facilities planning/design

Majority of an organization's capital investment is in facilities -- 8%of gross national product (GNP) ($250 billion) spent annually offacilities. Single most important cause of high material handling costs is lackof strategic facilities planning Material handling account for 20 - 50% of operating costs inmanufacturing Effective material handling can reduce costs by 10 - 30% Long term effect: versatility, expandability, flexibility Environmental implications: hazardous waste disposal Safety, convenience, appearance - influence worker morale Lead to economic development


Factors contribute toimproper facilities utilization

Management does not understandfacilities utilization concepts becauselack of on-the-floor experience

Because of more basic misapprehensionis difficult to decide.


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Facility Location

Facilities: Fixed assets like building structures and

inanimate resources that support theoperations of a given activity.

Facilities put together with humans, $and/or materials, energy result in theactivity.


Facility Location

Facilities Examples

Production: any discrete parts or process industryfacilities

Health care: hospitals, clinics, rehab. centers, nursinghome

Education: schools, colleges, day care centers,libraries

Food: restaurants, fast-food places, banquet halls

Commercial/Residential: shopping malls, officebuildings, banks, houses, hotels, motels

Government/Public Services: court house, IRS, INS,post office,

Transportation: airports, train stations, bus terminals Public assembly: stadium, auditoriums, theaters Religious: temples, chapels, churches


Facility Location

When the problems of locationidentification occurs?

Starting the new Business Business Enlargement Centralization Economics


Facility Location

The factors effecting the locationidentification?

Closed to market & raw materialsuppliers

Ease of getting labor Geographical factor Social acceptability Ease of getting other utilitie Procedures & laws


The Single-Facility RectilinearDistance Location Problem

Minisum model

Objective: to locate the new facility to minimize a

weighted sum of the rectilinear distances from thenew facility to existing facilities

Minimax model (not covered)Objective: to determine the location of the new

facility to minimize the maximum distance to theexisting facilities rather than the total distance


1) Minisum model

Objective: to locate the new facility tominimize a weighted sum of the rectilineardistances from the new facility to existingfacilities

Example: to determine the location ofphotocopy machine in the office


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1) Minisum model

Background of the problems

To identify the optimum location fornew facility X, (x*,y*) that haveactivity relationship with currentfacility Pi, ( ai,bi).

The optimum location must satisfythe median and cost function f(X).


Minisum model

Median

Median wi (First time achieved)

2


Minisum model

Where;

f(x,y) = The total of movement cost withinthe new facility and current facility.

wi = weight

x = Coordinate x for new facility

y = Coordinate y for new facility

ai = Coordinate x for current facility

bi = Coordinate y for current facility

Cost function f(X):


Minisum model

A new machine will be fixed at shopmachine workshop. The five (5) location ofthe current machines are given as P1 (1,1),P2 (5,2), P3 (2,8), P4 (4,4) and P5 (8,6).The daily number of trips estimation (wi)within new machine and current machineare shown in table below:

Example 1


Minisum modelsExample 1

Current m/c, Pi Coordinate, ai(x)

Coordinate, bi(y)

Number oftrips,w i

1 1 1 5

2 5 2 6

3 2 8 2

4 4 4 4

5 8 6 8

Total 25


Assume that, the costs per unitmovement are the same within bothmachines. Determine the optimumlocation for this new machine.

Minisum modelExample 1


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Current m/c, Pi Coordinate, ai Number oftrips,wi

1 1 5

3 2 2

4 4 4

2 5 6

5 8 8

Coordinate, ai (x)

Arrange from

lowest value tohighest value


Minisum models

Solution 1

Median wi2

= 25 = 12.52


Coordinate-X (ai)

x* = a2 = 5


Coordinate-Y (bi).

y* = b4 = 4


Minisum modelSolution 1

Therefore the optimum locationfor new machine, X(x*, y*) = (5,4)


The cost for this optimum location;

f(5,4) =5(I5-1I+I4-1I) +6(I5-5I+I4-2I) +2(I5-2I+I4-8I) +4(I5-4I+I4-4I) +8(I5-8I+I4-6I)

=35+12+14+4+40= 105

X(x*, y*) = (5,4)


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Minisum modelsSolution 1

If the cost is RM1.50/distance,therefore the total cost for this optimumlocation is RM 157.50 (105 x 1.50).

This optimum location also can bedetermined by plotting the graph f(a) vsai and f(b) vs bi. The optimum point islocated at the lowest curve.



Evaluating Location Alternatives

There are several useful techniques for evaluating

location alternatives:

Break even analysis

Transportation method

Factor Rating, and

The Center of Gravity Method




Locational Cost-Profit-Volume Analysis

The economic comparison of locationalternatives is facilitated by the use ofthis method.

The analysis can be done numerically

or graphically.


Total CostsThe sum of variable and fixed costs.

or

TC = VC + FC

Variable Costs The portion of the total cost that variesdirectly with the volume of output.

e.g. labor, materials, transportation, and

variable overhead

Fixed Costs The portion of the total cost that remainsconstant regardless of output levels.

e.g. land, property taxes, insurance,

equipment, and building


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For cost analysis, the total cost are:

Total Cost = FC + VC(Q)FC = Fixed Cost

VC = Variable Cost per unit

Q = Quantity/volume of output

Exercise 2

Thursday, March 07, 2013 Industrial Engineering 32Thursday, March 07, 2013 Industrial Engineering 32

Assumption1. Only one product is involved (main product)

2. Variable cost/unit is constant regardless of production qty.

3. Fixed cost remains unchanged when output quantity changed

4. Sale price is fixed regardless of sale quantity



The procedure for this analysis involvesthese steps:

1. Determine the fixed and variable cost associated with eachlocation alternatives.2. Plot the total-cost lines for all location alternatives on thesame graph.3. Determine which location will have the lowest total cost forthe expected level of output.4. Fixed costs are constant for the range of probable output.5. Variable costs are linear for the range of probable output.6. The required level of output can be closely estimated.7. Only one product is involves


LocationBreak-Even Analysis

Fi xed Co st s Var iab le Co st s To tal Co st sCommunity per Year per Unit (Fixed + Variable)

A $150,000 $62B $300,000 $38C $500,000 $24D $600,000 $30

Example 10.3

TC = FC + VC(Q)




A $150,000 $62B $300,000 $38C $500,000 $24

D $600,000 $30

for 20,000 units

Total Variable Costs

Example 10.3

TC = FC + VC(Q)




A $150,000 $62B $300,000 $38C $500,000 $24D $600,000 $30

for 20,000 units


$62 (20,000)

Example 10.3

TC = FC + VC(Q)


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A $150,000 $62B $300,000 $38C $500,000 $24D $600,000 $30

for 20,000 units


$62 (20,000) = $1,240,000

Example 10.3

TC = FC + VC(Q)




A $150,000 $62 $1,390,000B $300,000 $38C $500,000 $24

D $600,000 $30

for 20,000 units


$62 (20,000) = $1,240,000

Example 10.3

TC = FC + VC(Q)




A $150,000 $62 $1,390,000B $300,000 $38 $1,060,000C $500,000 $24 $ 980,000D $600,000 $30 $1,200,000

for 20,000 units

Example 10.3

TC = FC + VC(Q)

Thursday, March 07, 2013 Industrial Engineering 40Q (thousands of units)

0

200

400

600

800

1000

1200

1400

1600

2 4 6 8 10 12 14 16 18 20 22

Annualcost(thousandsofdollars)


F ix ed Co st s To ta l Co st sCo mm un it y p er Ye ar (Fi xe d + Va ri ab le )

A $150,000 $1,390,000B $300,000 $1,060,000

C $500,000 $ 980,000D $600,000 $1,200,000

Example 10.3

Thursday, March 07, 2013 Industrial Engineering 41Q (thousands of units)

0

200

400

600

800

1000

1200

1400

1600

2 4 6 8 10 12 14 16 18 20 22

A

D

BC

(20, 1390)

(20, 1200)

(20, 1060)

(20, 980)

Annualcost(thousands

ofdollars)


Fi xe d Co st s To ta l Co st sCo mm un it y p er Yea r (Fi xed + Va ri ab le )

A $150,000 $1,390,000B $300,000 $1,060,000C $500,000 $ 980,000D $600,000 $1,200,000

Example 10.3


A

D

BC

(20, 1390)

(20, 1200)

(20, 1060)

(20, 980)

A bes t

Break-evenpoint

Q (thousands of units)

0

200

400

600

800

1000

1200

1400

1600

2 4 6 8 10 12 14 16 18 20 22


ofdollars)

LocationBreak-Even AnalysisF ix ed Co st s To ta l Co st s

Co mm un it y p er Ye ar (Fi xe d + Va ri ab le )

A $150,000 $1,390,000B $300,000 $1,060,000C $500,000 $ 980,000D $600,000 $1,200,000

Example 10.3


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B best

Break-even point

A

D

BC

(20, 1390)

(20, 1200)

(20, 1060)

(20, 980)

A best

6.25

Break-evenpoint


0

200

400

600

800

1000

1200

1400

1600

2 4 6 8 10 12 14 16 18 20 2214.3




A $150,000 $1,390,000B $300,000 $1,060,000

C $500,000 $ 980,000D $600,000 $1,200,000

Example 10.3


C best

(20, 980)

B best

Break-even point

A

D

BC

(20, 1390)

(20, 1200)

(20, 1060)

A best

6.25

Break-evenpoint


0

200

400

600

800

1000

1200

1400

1600

2 4 6 8 10 12 14 16 18 20 2214.3


ofdollars)



A $150,000 $1,390,000B $300,000 $1,060,000C $500,000 $ 980,000D $600,000 $1,200,000

Example 10.3



Figure 10.2Q (thousands of units)

0

200

400

600

800

1000

1200

1400

1600

2 4 6 8 10 12 14 16 18 20 22

A best B best C best

Break-even point

6.25 14.3

A

D

BC

(20, 1390)

(20, 1200)

(20, 1060)

(20, 980)

Break-evenpoint


ofdollars)

46Q (thousands of units)

0

200

400

600

800

1000

1200

1400

1600

2 4 6 8 10 12 14 16 18 20 22

A bes t B best C best

Break-even po int

6.25 14.3

A

D

BC

(20, 1390)

(20, 1200)

(20, 1060)

(20, 980)

Break-evenpoint



(A) (B)

$150,000 + $62Q = $300,000 + $38QQ = 6,250 uni ts

$300,000 + $38Q = $500,000 + $24QQ = 14,286 units

(B) (C)

Break-Even Quantities




The Transportation Model

Involves finding the lowest-cost plan fordistributing stocks of goods or supplies frommultiple destinations that demand thegoods.

Used to determine how to allocate thesupplies available from the various factoriesto the warehouses that stock or demandthose goods, in such way that total shippingcost is minimized.


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Demand

Demand

Demand

Supply

Supply

DemandSupply

Figure 1:

The transportationproblem involvesdetermining aminimum-cost planfor shipping frommultiple sources tomultiple destination.



100

200

150

80 90 120 160

A B C D

Warehouse

1

2

3

Demand

Supply

4 7 7 1

12 3 8 8

8 10 16 5

Factory 2 cansupply 200units per period

Factory

Cost to ship oneunit from factory 1to warehouse A

450

450

Total supplycapacity perperiod

Total demandper period

Exercise 1

100 0

90 0

60

0

0

0

110

0

80

0

10


LocationTransportation MethodSetting up the Initial Tableau

Create a row for each plant and a column for each warehouse

PlantWarehouse

1 2 3

Phoenix

Atl anta


LocationTranspor tation Method

Setting up the Initial TableauAdd a col umn for p lant capac iti es and a ro w for w areho use deman d

PlantWarehouse

Capacity1 2 3

Requirements

Phoenix

Atl anta

400

500

900900200 400 300


LocationTranspor tation Method

Setting up the Initial Tableau

PlantWarehouse

Capacity1 2 3

Requirements

Phoenix

Atl anta

$5.00 $6.00 $5.40

$7.00 $4.60 $6.60

400

500

900900200 400 300

Figure 10.3

Insert costs into the shipping route option cells


LocationTranspor tation MethodSetting up the Initial Tableau

PlantWarehouse

Capacity1 2 3

Requirements

Phoenix

Atl anta

$5.00 $6.00 $5.40

$7.00 $4.60 $6.60

400

500(100)

900900

200 400 300(0)

Figure 10.3


400


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LocationTransportation Method


PlantWarehouse

Capacity1 2 3

Requirements

Phoenix

Atl anta

$5.00 $6.00 $5.40

$7.00 $4.60 $6.60

400(200)

500(100)

900900

200 400 300(0) (0)

Figure 10.3


400

200




PlantWarehouse

Capacity1 2 3

Requirements

Phoenix

Atl anta

$5.00 $6.00 $5.40

$7.00 $4.60 $6.60

400(200)(0)

500(100)

900900

200 400 300(0) (0) (100)

Figure 10.3


400

200 200

Industrial Engineering 57

LocationTransportation MethodSetting up the Initial Tableau

PlantWarehouse

Capacity1 2 3

Requirements

Phoenix

Atl anta

$5.00 $6.00 $5.40

$7.00 $4.60 $6.60

400(200)(0)

500(100)(0)

900900

200 400 300(0) (0) (100)(0)


400

200 200

100

Total Cost = 200(5) + 200(5.4) + 400(4.6) + 100(6.6) = $ 4580



Interpreting the Optimal Solution

Figure 10.4



FACILITIES LAYOUT


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Developing a facilities layout is a criticalstep in the facilities planning process.

Facilities Planner must be CREATIVE andCOMPREHENSIVE in generating layoutalternatives.

Which comes FIRST, the materialhandling system or the facilities layout?

Facilities Layout


Facilities Layout

Layout is effected by:

9 Centralized vs. Decentralize Storage ofWIP, Tooling, & Supplies

9 Fixed Path vs. Variable Path Handling

9

Unit Load Size9 Degree of Automation

9 Type and Level of Inventory andControl of Materials


Facilities Layout

Handling less is BEST:

- Number of times material is handled

- Not necessarily the handling distance

Layout or MHS First? -- BOTH

- Sequential approach which considers anumber of alternative handling systemsand the corresponding layoutalternatives.


Layout: the configuration of departments, workcenters, and equipment, with particularemphasis on movement of work (customers ormaterials) through the system.

Product layouts

Process layouts

Fixed-Position layout

Combination layouts

Facilities Layout


Objective of LayoutDesign

1. Facilitate attainment of product or servicequality

2. Use workers and space efficiently

3. Avoid bottlenecks

4. Minimize unnecessary material handling costs

5. Eliminate unnecessary movement of workers ormaterials

6. Minimize production time or customer servicetime

7. Design for safety


Requires substantial investmentsof money and effort

Involves long-term commitments

Has significant impact on cost andefficiency of short-termoperations

Importance of LayoutDecisions


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Inefficient operations

For Example:

High CostBottlenecks

Changes in the designof products or services

The introduction of newproducts or services

Accidents

Safety hazards

The Need for LayoutDecisions


Changes inenvironmentalor other legalrequirements

Changes in volume ofoutput or mix of

products

Changes in methodsand equipment

Morale problems

The Need for LayoutDesign (Contd)


Product layouts

Process layouts

Fixed-Position layout

Combination layouts

Basic Layout Types


Raw

materials

or customer

Finished

itemStation

2

Station

3

Station

4

Material

and/or

labor

Station

1

Material

and/or

labor

Material

and/or

labor

Material

and/or

labor

Used for Repetitive or Continuous Processing

Product Layout(sequential)Layout that uses standardized processing operations to

achieve smooth, rapid, high-volume flow


Product Layout: Advantages

Output rate high (rapid production)

Unit cost - Low

Labor specialization job scope is more specific.

Material handling cost - Low

Utilization of machine / equipment - High

Established scheduling (easy)

Accounting and purchasing Routine and Systematic

Product Layout: Disadvantages

Repetitive jobs

Poor skill workers may not maintain equipment or quality of output

Changes in product type not flexible

Affected by machine/equipment failure high risk to shutdowns

Individual incentive plans not practical


Dept. A

Dept. B Dept. D

Dept. C

Dept. F

Dept. E

Used for Intermittent processing

Job Shop or Batch Processes

Process LayoutLayout that can handle variety of process requirements


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9-73

Process Layout


Process Layouts: Advantages

Can handle a variety of process requirements.

Not affected by machine breakdown.

Cost of machine / equipment is lower (not integrated)

Individual incentive plans is possible.

Process Layouts: Disadvantages

In-process inventory costs can be higher

Challenge in scheduling (more difficult)

Equipment utilization rates - low

Material handling - slow and inefficient

Complexities often reduce span of supervision

Special attention for each product / customer

Accounting and purchasing are more involved


Fixed Position Layouts(project type)

The product remains stationary, whereas workers,

materials, and equipment are moveable.

Nature of the product dictates this type of layout

Weight, Size, Bulk


Fixed Position Layouts Large construction projects


Fixed Position Layouts Large construction projects

9-78

Fixed Position Layout


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9-79

Cellular Layout

Cellular Layout is a type of layout wheremachines are grouped according to the processrequirements for a set of similar items (partfamilies) that require similar processing. Thesegroups are called cells.

A cellular layout is an equipment layoutconfigured to support cellular manufacturing.

9-80

Cellular Layout

Processes are grouped into cells using atechnique known as group technology (GT).Group technology involves identifying parts withsimilar design characteristics (size, shape, andfunction) and similar process characteristics(type of processing required, available machinery

that performs this type of process, andprocessing sequence).

9-81

Improving Layouts by Moving to theWork Cell Concept


Dimension Functional Cellular

Number of movesbetween departments

many few

Travel distances longer shorter

Travel paths variable fixed

Job waiting times greater shorter

Throughput time higher lower

Amount of work inprocess

higher lower

Supervision difficulty higher lower

Scheduling complexity higher lower

Equipment utilization lower higher

Functional vs. Cellular

Layouts


Warehouse and storage layouts

Retail layouts

Office layouts

Service layouts must be aestheticallypleasing as well as functional

Service Layouts

9-84

Warehouse Layout Floor Plan

Zones

ConveyorTruck

Order Picker


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9-85

Retail /Service Layout -Grid Design

Office CartsCheck-out

Grocery StoreMeatBread

Milk

Produce

FrozenFoods

9-86

Retail/Service Layout -Free-Flow Design

Feature

DisplayTable

Trans.Counter

Apparel Store

9-87

Office Layout Floor Plan

Accounting

Manager Brand X

Finance

Fin. Acct.


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ToAccompanyKrajewski &RitzmanOperations Management: Strategy and Analysis, Seventh Edition 2004 PrenticeHall, Inc. All rights reserved.

Line Balancing

Green Grass, Inc.

Big Broadcaster


Line Balancing Big Broadcaster


Line BalancingBig Broadcaster

A Bol t leg f rame to hopper 40 None

B Insert impeller shaft 30 A

C Attach axle 50 AD Attach agitator 40 B

E Attach drive wheel 6 B

F Attach free wheel 25 C

G Mount lower post 15 C

H Attach controls 20 D, E

I Mount nameplate 18 F, G

Total 244

Work Time Immediate

Element Description (sec) Predecessor(s)

Example 7.3

ToAccompanyKrajewski &RitzmanOperations Management: Strategy and Analysis, Seventh Edition 2004P renticeHall, Inc. All rights reserved.


A Bolt leg frame to hop per 40 None




F Attach free wheel 25 CG Mount lower post 15 C



Total 244

DRAWING THE PRECEDENCE DIAGRAM

Work Time Immediate

Element Descr iption (sec) Predecessor(s)

Example 7.3



A Bolt leg frame to hop per 40 NoneB Insert impeller shaft 30 A

C Attach axle 50 A

D Attach agitator 40 B





Total 244

Work Time Immediate

Element Descr ipti on (sec) Predecessor(s)

40

A

Example 7.3


Line BalancingBig Broadcaster

A Bolt leg frame to hop per 40 None







Total 244

Work Time Immediate

Element Descr ipti on (sec) Predecessor(s)

40

30

B

A

Example 7.3


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c = 60 seconds/unit

TM = 5 stationsEfficiency = 81.3%

S1

S2

S3

S5S4

As n = TM = 5, we can do no b etter than

this with a 60 second cycle time.

40

6

20

50

15

18

E30

25

40H

I

D

B

F

C

A

G

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