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C o n f i d e n t i a l

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Program : MBA

Semester : II

Subject Code : MB0044

BOOK ID : B1133

Subject Name : Production and Operations Management

Unit number : 5

Unit Title : Facility Management

Lecture Number : 5

Lecture Title : Facility Management

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Facility Management

Objectives :

Describe facility management

Discuss the facility planning process

Explain different methods for selecting a suitable plant location

Analyze the features and importance of different types of layouts

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Unit-5 Facility Management

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Lecture Outline

Introduction Facility Management

Facility Planning Process

Rating Methods

Facility Layout

Optimization of Resource Utilization

Summary

Check Your Learning

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Introduction Facility Management

Facilities management is an important strategic level decision taken by an

organisation

It involves planning and management of the plant location and layout.

Location decisions are made on the basis of parameters such as suppliersand markets distance.

Layout means the positioning of various equipments, machineries, and

department facilities so as to maximise productivity and valuable space

utilisation.

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C o n f i d e n t i a lHOME NEXTPREVIOUS

Facility Planning Process

Involves

Planning the location of the plant

Planning the manufacturing facility layouts

More


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General Factors Special Factors

Availability of land Economic stability outsideinvestments

Availability of inputs (labour, raw

materials)

Cultural factors

Closeness to market places Wages

Communication facilities Joint ventures support of bigtime players

Infrastructure, Housing

Transport

Governement Support

Factors influencing Plant Location can be broadly divided into two types

namely:


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Rating methods

The Rating methods rank and give weightage to general and/or special

factors for determining the location.

The methods which determine the most likely location are:

Rating plan method

Factor rating method

Point rating method

Break-even analysis

Centre of gravity method

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Rating plan method Ratings are given by the management to various factors for locating

the plant. The location which gets the maximum rating, considering

all the factors is chosen for locating the plant.

Factor rating method

Each of the factors for location is rated and the rating of the

competitive locations is considered. The products of the rating

(factor & location) are added and the location which gets the

maximum product of rating is selected.

Point rating method Each of the factors will be given a maximum point, a portion of which

is awarded for all the location under consideration. The location

gaining the maximum points after summing all the factors is

considered.

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Break Even Analysis The total costs (fixed and variable) for different locations are

estimated on amounts per annum. The location whichever costs the

least is chosen.

Centre of Gravity method

We use this method when, both distance and load have to be

considered for optimality in terms of cost.

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Facility Layouts

Product Layout:

In a product (or line) layout, various facilities, such as machine,

equipment, work force, etc., are located as per the sequence of

operation on parts. Product layout is preferred when production is

continuous, part variety is less, production volume is high and part

demand is relatively stable.


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Facility Layouts

Process Layout:

Process layouts are found primarily in job shops, or firms that

produce customized, low-volume products that may require different

processing requirements and sequences of operations


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Facility Layouts

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Fixed Position Layout:

In a Fixed position layout the main product being produced is fixed at

a particular location. Resources, such as equipment, labor and

material are brought to that fixed location. This type of layout is

useful when the product being processed is very big, heavy or difficult

to move. Some examples of fixed position layout are shipbuilding,

aircraft assembly, wagon building, etc.


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Facility Layouts

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Cellular Layout: Cellular manufacturing is a type of layout where machines are

grouped according to the process requirements for a set of similar

items (part families) that require similar processing. These groups are

called cells. Therefore, a cellular layout is an equipment layout

configured to support cellular manufacturing.


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Resources can broadly be classified under three categories as shownbelow.

Category 1

Land, Machinery, Equipments, Tools, Raw materials, Inventory, and

Power

Category 2

Processes, Technology, Techniques which have been developed or

acquired for making the products, and Delivering the services for the

customers

Category 3

People inside and outside the organisation, such as, employees,

suppliers, customers and members of the society

Optimisation of Resource Utilsation


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Planning the facilities for manufacturing is a very crucial activity

involving, huge amounts of finance and thus requiring top

management decisions.

The way machines are laid out is important to achieve the maximum

productivity and minimum movement of materials inside the plant.

Different types of layouts were dealt depending on the variety of

products and their volumes.

Summary


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Check Your Learning

1. What are the factors influencing Plant location?

Ans. General factors & Special factors.

2. Mention the different types of Rating methods.

Ans. Rating Plan method, Factor plan method, Point rating method, Break

even analysis method, Center of gravity method.

3. Mention the different types ofFacility Layouts.

Ans. Product, Process, Fixed Position and Cellular layouts.

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