heizer om10 ch09-layout

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99 Layout StrategiesLayout Strategies

P P i t t ti tP P i t t ti t

9 - 1© 2011 Pearson Education, Inc. publishing as Prentice Hall

PowerPoint presentation to accompany PowerPoint presentation to accompany Heizer and Render Heizer and Render Operations Management, 10e Operations Management, 10e Principles of Operations Management, 8ePrinciples of Operations Management, 8e

PowerPoint slides by Jeff Heyl

OutlineOutline

Global Company Profile: McDonald’sThe Strategic Importance of


The Strategic Importance of Layout DecisionsTypes of LayoutOffice Layout

Outline Outline –– ContinuedContinued

Retail LayoutServicescapes

Warehousing and Storage Layouts


Cross-DockingRandom DockingCustomizing

Fixed-Position Layout


Process-Oriented LayoutComputer Software for Process-Oriented Layouts

W k C ll


Work CellsRequirements of Work CellsStaffing and Balancing Work CellsThe Focused Work Center and the Focused Factory


Repetitive and Product-Oriented Layout

Assembly-Line Balancing


y g

Learning ObjectivesLearning ObjectivesWhen you complete this chapter, you When you complete this chapter, you should be able to:should be able to:

1. Discuss important issues in office layout2 Define the objectives of retail layout


2. Define the objectives of retail layout3. Discuss modern warehouse

management and terms such as ASRS, cross-docking, and random stocking

4. Identify when fixed-position layouts are appropriate

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Learning ObjectivesLearning ObjectivesWhen you complete this chapter, you When you complete this chapter, you should be able to:should be able to:5. Explain how to achieve a good process-

oriented facility layout


y y6. Define work cell and the requirements of

a work cell7. Define product-oriented layout8. Explain how to balance production flow

in a repetitive or product-oriented facility

Innovations at McDonald’sInnovations at McDonald’sIndoor seating (1950s)Drive-through window (1970s)Adding breakfast to the menu (1980s)


(1980s)Adding play areas (late 1980s)Redesign of the kitchens (1990s)Self-service kiosk (2004)Now three separate dining sections

Innovations at McDonald’sInnovations at McDonald’sIndoor seating (1950s)Drive-through window (1970s)Adding breakfast to the menu (1980s)

Six out of the seven are


(1980s)Adding play areas (late 1980s)Redesign of the kitchens (1990s)Self-service kiosk (2004)Now three separate dining sections

seven are layout

decisions!

McDonald’s New LayoutMcDonald’s New LayoutSeventh major innovation Redesigning all 30,000 outlets around the worldThree separate dining areas


p gLinger zone with comfortable chairs and Wi-Fi connectionsGrab and go zone with tall countersFlexible zone for kids and families

Facility layout is a source of competitive advantage

Strategic Importance of Strategic Importance of Layout DecisionsLayout Decisions

The objective of layout strategy The objective of layout strategy is to develop an effective andis to develop an effective and


is to develop an effective and is to develop an effective and efficient layout that will meet the efficient layout that will meet the firm’s competitive requirementsfirm’s competitive requirements

Layout Design Layout Design ConsiderationsConsiderations

Higher utilization of space, equipment, and peopleImproved flow of information, materials,


p , ,or peopleImproved employee morale and safer working conditionsImproved customer/client interactionFlexibility

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Types of LayoutTypes of Layout

1. Office layout 2. Retail layout 3. Warehouse layout


4. Fixed-position layout5. Process-oriented layout6. Work-cell layout 7. Product-oriented layout

Types of LayoutTypes of Layout1. 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 trade-offs between space and material handling


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)


6. Work cell layout: Arranges machinery and equipment to focus on production of a single product or group of related products


group of related products7. Product-oriented layout: Seeks the

best personnel and machine utilizations in repetitive or continuous production

Layout StrategiesLayout StrategiesObjectives Examples

Office Locate workers requiring frequent contact close to one another

Allstate Insurance Microsoft Corp.

Retail Expose customer to high-margin items

Kroger’s SupermarketWalgreen’sBloomingdale’s


Bloomingdale’s

Warehouse (storage)

Balance low cost storage with low-cost material handling

Federal-Mogul’s warehouseThe Gap’s distribution center

Project (fixed position)

Move material to the limited storage areas around the site

Ingall Ship Building Corp.Trump PlazaPittsburgh Airport

Table 9.1

Layout StrategiesLayout StrategiesObjectives Examples

Job Shop (process oriented)

Manage varied material flow for each product

Arnold Palmer HospitalHard Rock CafeOlive Garden

Work Cell (product families)

Identify a product family, build teams, cross train team members

Hallmark CardsWheeled Coach


families) membersStandard Aero

Repetitive/ Continuous (product oriented)

Equalize the task time at each workstation

Sony’s TV assembly lineToyota Scion

Table 9.1

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Good Layouts ConsiderGood Layouts Consider

Material handling equipmentCapacity and space requirementsEnvironment and aesthetics


Environment and aestheticsFlows of informationCost of moving between various work areas

Office LayoutOffice LayoutGrouping of workers, their equipment, and spaces to provide comfort, safety, and movement of informationMovement of i f ti i i


information is main distinctionTypically in state of flux due to frequent technological changes

Relationship ChartRelationship Chart


Figure 9.1

Supermarket Retail LayoutSupermarket Retail Layout

Objective is to maximize profitability per square foot of floor space


Sales and profitability vary directly with customer exposure

Five Helpful Ideas for Five Helpful Ideas for Supermarket LayoutSupermarket 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 locations5. Convey mission of store through careful

positioning of lead-off department

Store LayoutStore Layout


Figure 9.2

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Retail SlottingRetail SlottingManufacturers pay fees to retailers to get the retailers to display (slot) their productContributing factors


Limited shelf spaceAn increasing number of new productsBetter information about sales through POS data collectionCloser control of inventory

Retail Store Shelf Space Retail Store Shelf Space PlanogramPlanogram

Computerized tool for shelf-space management

5 facings

Shampoo

Shampoo

Shampoo

Shampoo

Shampoo


managementGenerated from store’s scanner data on salesOften supplied by manufacturer

Conditioner

Conditioner

Shampoo

Shampoo

Shampoo

Shampoo

Conditioner

2 ft.

ServicescapesServicescapes1.1. Ambient conditionsAmbient conditions - background

characteristics such as lighting, sound, smell, and temperature

2.2. Spatial layout and functionalitySpatial layout and functionality - which involve customer

i l ti th l i


circulation path planning, aisle characteristics, and product grouping

3.3. Signs, symbols, and Signs, symbols, and artifactsartifacts - characteristics of building design that carry social significance

Warehousing and Storage Warehousing and Storage LayoutsLayouts

Objective is to optimize trade-offs between handling costs and costs associated with warehouse space


associated with warehouse spaceMaximize the total “cube” of the warehouse – utilize its full volume while maintaining low material handling costs


All costs associated with the transactionIncoming transport

Material Handling CostsMaterial Handling Costs


StorageFinding and moving materialOutgoing transportEquipment, people, material, supervision, insurance, depreciation

Minimize damage and spoilage


Warehouse density tends to vary inversely with the number of different items storedAutomated Storage and


Automated Storage and Retrieval Systems (ASRSs) can significantly improve warehouse productivity by an estimated 500%Dock location is a key design element

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CrossCross--DockingDockingMaterials are moved directly from receiving to shipping and are not placed in storage in the warehouseRequires tight scheduling and


sc edu g a daccurate shipments, bar code or RFIDidentification used foradvanced shipmentnotification as materialsare unloaded

Random StockingRandom StockingTypically requires automatic identification systems (AISs) and effective information systemsRandom assignment of stocking locations allows more efficient use of space


Key tasks1. Maintain list of open locations2. Maintain accurate records3. Sequence items to minimize travel, pick time4. Combine picking orders5. Assign classes of items to particular areas

CustomizingCustomizingValue-added activities performed at the warehouseEnable low cost and rapid response strategies


strategiesAssembly of componentsLoading softwareRepairsCustomized labeling and packaging

omiz

atio

n

Storage racks

Warehouse LayoutWarehouse LayoutTraditional Layout


Shipping and receiving docks

Office

Cus

to

Conveyor

Staging

Warehouse LayoutWarehouse LayoutCross-Docking Layout




Offi

ce

FixedFixed--Position LayoutPosition LayoutProduct remains in one place Workers and equipment come to siteComplicating factors


Limited space at siteDifferent materials required at different stages of the projectVolume of materials needed is dynamic

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Alternative StrategyAlternative StrategyAs much of the project as possible is completed off-site in a product-oriented facilityThis can


significantly improve efficiency but is only possible when multiple similar units need to be created

ProcessProcess--Oriented LayoutOriented Layout

Like machines and equipment are grouped togetherFlexible and capable of handling a

id i t f d t


wide variety of products or servicesScheduling can be difficult and setup, material handling, and labor costs can be high

Surgery

ER triage room

Emergency room admissions


Patient A Patient A -- broken legbroken leg

Patient B Patient B -- erratic heart erratic heart pacemakerpacemaker


Radiology ER Beds Pharmacy Billing/exit

Laboratories

Figure 9.3

Layout at Arnold Palmer HospitalLayout at Arnold Palmer Hospital

Central break and medical

supply rooms

Local linen

Pie-shaped rooms

Central nurses


supply

Local nursing pod

station


Arrange work centers so as to minimize the costs of material handlingB i t l t


Basic cost elements areNumber of loads (or people) moving between centersDistance loads (or people) move between centers


Minimize cost = ∑ ∑ Xij Cij

n

i = 1

n

j = 1

where n = total number of work centers or


where n = total number of work centers or departments

i, j = individual departmentsXij = number of loads moved from

department i to department jCij = cost to move a load between

department i and department j

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Process Layout ExampleProcess Layout ExampleArrange 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 requirements3. Develop an initial schematic diagram4. Determine the cost of this layout 5. Try to improve the layout6. Prepare a detailed plan

Department Assembly Painting Machine Receiving Shipping Testing(1) (2) Shop (3) (4) (5) (6)

Assembly (1)

Number of loads per week

50 100 0 0 20

Process Layout ExampleProcess Layout Example


Painting (2)

Machine Shop (3)

Receiving (4)

Shipping (5)

Testing (6)

30 50 10 0

20 0 100

50 0

0

Figure 9.4

Area 1 Area 2 Area 3


Assembly Painting Machine ShopDepartment Department Department

(1) (2) (3)


Area 4 Area 5 Area 660’

40’

Receiving Shipping TestingDepartment Department Department

(4) (5) (6)

Figure 9.5

Process Layout ExampleProcess Layout ExampleInterdepartmental Flow Graph

100

50 30 Machine Assembly Painting


Figure 9.6

50

10100

Shop (3)

Testing (6)

Shipping (5)

Receiving (4)

y(1)

g(2)


Cost = $50 + $200 + $40(1 and 2) (1 and 3) (1 and 6)

Cost = ∑ ∑ Xij Cij

n

i = 1

n

j = 1


(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

Process Layout ExampleProcess Layout ExampleRevised Interdepartmental Flow Graph

30

50 100 Machine Painting Assembly


Figure 9.7

50

50 100

Shop (3)

Testing (6)

Shipping (5)

Receiving (4)

g(2)

y(1)

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Cost = $50 + $100 + $20(1 and 2) (1 and 3) (1 and 6)

Cost = ∑ ∑ Xij Cij

n

i = 1

n

j = 1


(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

Area 1 Area 2 Area 3


Painting Assembly Machine ShopDepartment Department Department

(2) (1) (3)


Area 4 Area 5 Area 660’

40’

Receiving Shipping TestingDepartment Department Department

(4) (5) (6)

Figure 9.8

Computer SoftwareComputer SoftwareGraphical approach only works for small problemsComputer programs are available to sol e bigger problems


solve bigger problemsCRAFTALDEPCORELAPFactory Flow

CRAFT ExampleCRAFT ExampleA A A A B B

A A A A B B

D D D D D D

C C D D D D

D D D D B B

D D D D B B

D D D E E E

C C D E E F

9 - 52© 2011 Pearson Education, Inc. publishing as Prentice HallFigure 9.9

TOTAL COST 20,100EST. COST REDUCTION .00ITERATION 0

(a)

C C D D D D

F F F F F D

E E E E E D

TOTAL COST 14,390EST. COST REDUCTION 70ITERATION 3

(b)

C C D E E F

A A A A A F

A A A F F F

Computer SoftwareComputer SoftwareThree dimensional visualization software allows managers to view possible layouts and assess process, material handling


handling, efficiency, and safety issues

Work CellsWork CellsReorganizes people and machines into groups to focus on single products or product groupsGroup technology identifies


p gyproducts that have similar characteristics for particular cellsVolume must justify cellsCells can be reconfigured as designs or volume changes

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Advantages of Work CellsAdvantages of Work Cells1. Reduced work-in-process inventory2. Less floor space required3. Reduced raw material and finished

goods inventory4 Reduced direct labor


4. Reduced direct labor5. Heightened sense of employee

participation6. Increased use of equipment and

machinery7. Reduced investment in machinery and

equipment

Requirements of Work CellsRequirements of Work Cells

1. Identification of families of products2. A high level of training, flexibility

and empowerment of employees


and empowerment of employees3. Being self-contained, with its own

equipment and resources4. Test (poka-yoke) at each station in

the cell

Improving Layouts Using Improving Layouts Using Work CellsWork Cells


Current layout - workers in small closed areas.

Improved layout - cross-trained workers can assist each other. May be able to add a third worker as additional output is needed.

Figure 9.10 (a)

Improving Layouts Using Improving Layouts Using Work CellsWork Cells


Current layout - straight lines make it hard to balance tasks because work may not be divided evenly

Improved layout - in U shape, workers have better access. Four cross-trained workers were reduced.

Figure 9.10 (b)

U-shaped line may reduce employee movement and space requirements while enhancing communication, reducing the number of workers, and facilitating inspection

Staffing and Balancing Staffing and Balancing Work CellsWork Cells

Determine the takt timeDetermine the takt time

Takt time =Total work time available

Units required


Units required

Determine the number Determine the number of operators requiredof operators required

Workers required =Total operation time required

Takt time

Staffing Work Cells ExampleStaffing Work Cells Example600 Mirrors per day requiredMirror production scheduled for 8 hours per dayFrom a work balance

chart totaloperation time d

60

50


p= 140 seconds

Stan

dard

tim

e re

quire

d

Operations

Assemble Paint Test Label Pack forshipment

40

30

20

10

0

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Staffing Work Cells ExampleStaffing Work Cells Example600 Mirrors per day requiredMirror production scheduled for 8 hours per dayFrom a work balance

chart totaloperation time


p= 140 seconds

Takt time = (8 hrs x 60 mins) / 600 units = .8 mins = 48 seconds

Workers required =Total operation time required

Takt time

= 140 / 48 = 2.91

Work Balance ChartsWork Balance ChartsUsed for evaluating operation times in work cellsCan help identify bottleneck operations


operationsFlexible, cross-trained employees can help address labor bottlenecksMachine bottlenecks may require other approaches

Focused Work Center and Focused Work Center and Focused FactoryFocused Factory

Focused Work CenterIdentify a large family of similar products that have a large and stable demandMoves production from a general-purpose,


Moves production from a general purpose, process-oriented facility to a large work cell

Focused FactoryA focused work cell in a separate facilityMay be focused by product line, layout, quality, new product introduction, flexibility, or other requirements

Focused Work Center and Focused Work Center and Focused FactoryFocused Factory

Work Cell Focused Work Center Focused Factory

Description: Work cell is a temporary product-oriented arrangement of machines and

A focused work center is a permanent product-oriented arrangement of machines and personnel in what is

A focused factory is a permanent facility to produce a product or component in a product-oriented

9 - 64© 2011 Pearson Education, Inc. publishing as Prentice Hall Table 9.2

personnel in what is ordinarily a process-oriented facility

ordinarily a process-oriented facility

facility. Many focused factories currently being built were originally part of a process-oriented facility

Example: A job shop with machinery and personnel rearranged to produce 300 unique control panels

Example: Pipe bracket manufacturing at a shipyard

Example: A plant to produce window mechanism for automobiles

Repetitive and ProductRepetitive and Product--Oriented LayoutOriented Layout

1. Volume is adequate for high equipment tili ti

Organized around products or families of Organized around products or families of similar highsimilar high--volume, lowvolume, low--variety productsvariety products


utilization2. Product demand is stable enough to justify high

investment in specialized equipment3. 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

ProductProduct--Oriented LayoutsOriented LayoutsFabrication line

Builds components on a series of machinesMachine-pacedRequire mechanical or engineering changes to balance


Assembly linePuts fabricated parts together at a series of workstationsPaced by work tasksBalanced by moving tasks

Both types of lines must be balanced so that the time to perform the work at each station is the same

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ProductProduct--Oriented LayoutsOriented Layouts

1. Low variable cost per unit2. Low material handling costs3. Reduced work-in-process inventories4. Easier training and supervision

AdvantagesAdvantages


5. Rapid throughput

1. High volume is required2. Work stoppage at any point ties up the

whole operation3. Lack of flexibility in product or production

rates

DisadvantagesDisadvantages

McDonald’s Assembly LineMcDonald’s Assembly Line


Figure 9.12

Disassembly LinesDisassembly LinesDisassembly is being considered in new product designs“Green” issues and recycling standards are important consideration


Automotive disassembly is the 16th

largest industry in the US

AssemblyAssembly--Line BalancingLine BalancingObjective is to minimize the imbalance between machines or personnel while meeting required outputStarts with the precedence relationships


relationshipsDetermine cycle timeCalculate theoretical minimum number of workstationsBalance the line by assigning specific tasks to workstations

Wing Component ExampleWing Component Example

This means that tasks B and E cannot be done

Performance Task Must FollowTime Task Listed

Task (minutes) BelowA 10 —B 11 AC 5 B


cannot be done until task A has been completed

D 4 BE 12 AF 3 C, DG 7 FH 11 EI 3 G, HTotal time 66

Wing Component ExampleWing Component ExamplePerformance Task Must Follow

Time Task ListedTask (minutes) Below

A 10 —B 11 AC 5 B


D 4 BE 12 AF 3 C, DG 7 FH 11 EI 3 G, HTotal time 66 I

GF

C

D

H

B

E

A10

1112

5

4 3

711 3

Figure 9.13

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Wing Component ExampleWing Component Example480 available

mins per day40 units required

C l iProduction time available per day


I

GF

C

D

H

B

E

A10

1112

5

4 3

711 3

Figure 9.13


Cycle time =p y

Units required per day= 480 / 40= 12 minutes per unit

Minimum number of

workstations=

∑ Time for task i

Cycle time

n

i = 1

= 66 / 12= 5.5 or 6 stations

Wing Component ExampleWing Component ExamplePerformance Task Must Follow

Time Task ListedTask (minutes) Below

A 10 —B 11 AC 5 B

480 available mins per day

40 units requiredCycle time = 12 mins

Minimum workstations = 5.5 or 6

Line-Balancing Heuristics

1. Longest task time Choose the available task with the longest task time

2. Most following tasks Choose the available task with the largest number of following tasks

3. Ranked positional Choose the available task for


I

GF

C

D

H

B

E

A10

1112

5

4 3

711 3

Figure 9.13


3. Ranked positional weight

Choose the available task for which the sum of following task times is the longest

4. Shortest task time Choose the available task with the shortest task time

5. Least number of following tasks

Choose the available task with the least number of following tasks

Table 9.4

480 available mins per day

40 units requiredCycle time = 12 mins

Minimum workstations = 5.5 or 6



Wing Component ExampleWing Component Example

Station 2

5


D 4 BE 12 AF 3 C, DG 7 FH 11 EI 3 G, HTotal time 66Station

1

Station 3Station 3

Station 4

Station 5

Station 6Station 6

I

GF

H

C

D

B

E

A10 11

12

4

3 7

11

3

Figure 9.14



Wing Component ExampleWing Component Example480 available

mins per day40 units required

Cycle time = 12 minsMinimum

workstations = 5.5 or 6



Efficiency =∑ Task times

(Actual number of workstations) x (Largest cycle time)

= 66 minutes / (6 stations) x (12 minutes)= 91.7%


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