Operations Management: Layout Strategy

Operations Management
Layout Strategy
What is Facility Layout
Location or arrangement of everything within & around buildings
Determines long-run efficiency of operations
Helps achieve a strategy that supports differentiation, low cost or quick response
2
Strategic Importance of Layout

Proper layout enables:
Higher utilization of space, equipment and people Improved flow of information, materials, or
people
Improved employee morale and safer working conditions Improved customer/client interaction Flexibility to change--use small, movable or
3
Layout Strategies
Office layout
positions workers, their equipment, and spaces/offices to provide for movement of communication and information
allocates shelf space and responds to customer behavior addresses trade-offs between space and material handling
4
Retail/service layout
Warehouse layout
Seven Layout Strategies
Fixed-position layout
large bulky projects such as ships and buildings deals with low-volume, high-variety production (job shop, intermittent production) seeks the best personnel and machine use in repetitive or continuous production, line balancing
Process-oriented layout
Product-oriented layout
Office Layout
Design positions people, equipment, & offices for maximum people and information flow, comfort and safety Relationship chart used Examples

Banks Software company
Office Layout Floor Plan
Finance Manager
Accounting
Fin. Acct.
Brand X
Retail/Service Layout
Design maximizes product exposure to customers Decision variables
Store flow pattern Allocation of (shelf) space to products
Retail Layouts Some Rules of Thumb
Locate high-draw items around the periphery of the store Use prominent locations such as the first or last aisle for high-impulse and high margin items Distribute power items (items that may dominate a shopping trip) to both sides of an aisle, and disperse them to increase the viewing of other items Use end aisle locations because they have a very high exposure rate
9
A Good Service Layout Considers
Ambient conditions - background
characteristics such as lighting, sound,

smell, and temperature.
Spatial layout and functionality - which involve customer circulation path planning Signs, Symbols, and Artifacts characteristics of building design that carry significance
10
Warehouse Layout

Design balances between space utilization & handling cost Similar to process layout
Items moved between dock & various storage areas
Optimum layout depends on

Variety of items stored

Number of items picked
11
Fixed-Position Layout

Design is for stationary project Workers and equipment come to site Complicating factors

Limited space at site House, shipyard etc.
12
Process-Oriented Layout
Design places departments with large

flows of material or people together Department areas having similar processes located in close proximity
e.g., All x-ray machines in same area
Supports process-focused strategy i.e. product differentiation stategy

13
Emergency Room Layout

Triage room
Patient A broken leg Patient B heart problems
Labs
E.R. beds
Pharmacy
Billing/exit
14
Product-Oriented Layout
Facility organized around product Design minimizes line imbalance
Delay between work stations
Types: Fabrication line; assembly line
15
Steps in Developing a Process-Oriented Layout

1
2 3 4 5 6
Construct a from-to matrix Determine space requirements for each department Develop an initial schematic diagram Determine the cost of this layout By trial-and-error (or more sophisticated means), try to improve the initial layout Prepare a detailed plan that evaluates factors in addition to transportation cost
Cost of Process-Oriented Layout

Minimize cost X ij C ij
i 1 j1 n n
where n total number of workcenters or departments i, j individual departments X ij number of loads moved from department i to department j C ij cost tomove a load between department i and department j
Interdepartmental Flow of Parts

1 1 2 3 4 5 6 2 3 4 5 6
50
100 30
0 50
0 10
20 0
20
0
50
100
0 0
Interdepartmental Flow Graph Showing Number of Weekly Loads

100
1
50
30
100 10
4
50
Possible Layout 1
Room 1 Assembly Department (1) Room 2 Printing Department (2) Room 2 Machine Shop Department (3)
Receiving Department (4)
Shipping Department (5)
Testing Department (6)
40
Room 4
Room 5 60
Room 6
Interdepartmental Flow Graph Showing Number of Weekly Loads

30
2 2
2 1
50
100
100
50
Possible Layout 3
Room 1 Painting Department (2) Room 2 Assembly Department (1) Room 2 Machine Shop Department (3)
Receiving Department (4)
Shipping Department (5)
Testing Department (6)
40
Room 4
Room 5 60
Room 6
Assembly Line Balancing
Analysis of production lines Nearly equally divides work between workstations while meeting required output Objectives

Maximize efficiency Minimize number of work stations
Assembly Line Balancing The General Procedure
Determine cycle time by taking the demand (or production rate) per day and dividing it into the productive time available per day Calculate the theoretical minimum number of work stations by dividing total task time by cycle time Perform the line balance and assign specific assembly tasks to each work station
Assembly Line Balancing Steps

1. 2. 3. 4. 5. 6. 7. 8. Determine tasks (operations) Determine sequence Draw precedence diagram Estimate task times Calculate cycle time Calculate number of work stations Assign tasks Calculate efficiency
Precedence Diagram Example
10 Min. A
11
C
4
5
3 7 3
B
12
F
11
Assembly Line Balancing Equations

Production time available
Cycle time
Minimum number of work stations Efficiency
Demand per day Task times
Cycle time Task times
(Actual number * (Cycle time) of work stations)
Cycle time calc.
On the basis of precedence diagram and activity times given above, the firm determines that there are 480 productive minutes of work available per day. Furthermore, production schedule requires that 40 units be completed as output from the assembly line each day. Cycle time:480/40=12 minutes per unit Min no. of workstations:66/12=5.5 or 6
Six Station Solution

5
C
10
A
11
B
3
F
7
G
3
D I
12
E
11
H

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Operations Management

What is Facility Layout

Location or arrangement of everything within & around buildings

Determines long-run efficiency of operations

Strategic Importance of Layout

Seven Layout Strategies

Banks Software company

Office Layout Floor Plan

Design maximizes product exposure to customers Decision variables

Store flow pattern Allocation of (shelf) space to products

Retail Layouts Some Rules of Thumb

A Good Service Layout Considers

Ambient conditions - background

characteristics such as lighting, sound,

Items moved between dock & various storage areas

Optimum layout depends on

Variety of items stored

Limited space at site House, shipyard etc.

Design places departments with large

e.g., All x-ray machines in same area

Supports process-focused strategy i.e. product differentiation stategy

Emergency Room Layout

Facility organized around product Design minimizes line imbalance

Delay between work stations

Types: Fabrication line; assembly line

Steps in Developing a Process-Oriented Layout

Cost of Process-Oriented Layout

Interdepartmental Flow of Parts

Interdepartmental Flow Graph Showing Number of Weekly Loads

Receiving Department (4)

Shipping Department (5)

Testing Department (6)

Interdepartmental Flow Graph Showing Number of Weekly Loads

Receiving Department (4)

Shipping Department (5)

Testing Department (6)

Assembly Line Balancing

Maximize efficiency Minimize number of work stations

Assembly Line Balancing The General Procedure

Assembly Line Balancing Steps

Precedence Diagram Example

Assembly Line Balancing Equations

Demand per day Task times

Cycle time Task times

(Actual number * (Cycle time) of work stations)

Cycle time calc.

Six Station Solution

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