CHAPTER SIX

STRATEGIC RESOURCE
ORGANIZATION: FACILITIES
LAYOUT
Layout
Refers to the configuration of departments,
work centers, and equipment, with
particular emphasis on movement of work
(costumers or materials) through the
system.
Why Layout is Important?
They require substantial investments of
money and effort;

They involve long-term commitments, which

makes mistakes difficult to overcome; and

They have a significant impact on the cost

and efficiency of operations.
The basic objective of layout design is to
facilitate a smooth flow of work, material,
and information through the system.
Supporting objectives generally involve the
following:

1. To facilitate attainment of product or

service quality.

2. To use workers and space efficiently.

3. To avoid bottlenecks.
4. To minimize material handling costs.
5. To eliminate unnecessary movements
of workers or materials.
6. To minimize production time or
customer service time.
7. To design for safety.
Three Basic Types of Layout

Product Layout
Process Layout
Fixed-position Layout
I. Repetitive Processing:
Product Layouts
Product Layout
Layout that uses standardized processing
operations to achieve smooth, rapid, high-
volume flow.
a) Production line Standardized
layout arranged according to a fixed sequence
of production tasks.
b) Assembly Line Standardized
layout arranged according to a fixed sequence
of assembly tasks.
The main advantages of Product
Layouts
are:
1. A high rate of output.
2. Low unit cost due to high volume. The
high cost of specialized equipment is
spread over many units.
3. Labor specialization, which reduces
training costs and time, and results in a
wide span of supervision.
4. Low material-handling cost per unit. Material
handling is simplified because units follow the same
sequence of operations. Material handling is often
automated.
5. A high utilization of labor and equipment.
6. The establishment of routing and scheduling in the
initial design of the system. These activities do not
require much attention once the system is operating.
7. Fairly routine accounting, purchasing, and inventory
control.
The primary disadvantages of Produc
Layouts include the following:
1. The intensive division of labor usually creates dull,
repetitive jobs that provide little opportunity for
advancement and may lead to morale problems and to
repetitive stress injuries.
2. Poorly skilled workers may exhibit little interest in
maintaining equipment or in the quality of output.
3. The system is fairly inflexible in response to changes in
the volume of output or changes in product or process
design.
4. The system is highly susceptible to shutdowns caused
by equipment breakdowns or excessive absenteeism
because workstations are highly interdependent.
5. Preventive maintenance, the capacity for quick
repairs, and spare-parts inventories are necessary
expenses.
6. Incentive plans tied to individual output are
impractical since they would cause variations among
outputs of individual workers, which would adversely
affect the smooth flow of work through the system
c) U-Shaped Layouts.
U-shaped line has a number of advantages that make it
worthy of consideration.
One disadvantage of a long, straight line is that it
interferes with cross-travel of workers and vehicles. A
U-shaped line is more compact; it often requires
approximately half the length of a straight production
line. In addition, a U-shaped line permits increased
communication among workers on the line because
workers are clustered, thus facilitating teamwork.
II. Nonrepetitive Processing:
Process Layouts
 Process layouts (functional layouts) are
designed to process items or provide
services that involve a variety of processing
requirements. The variety of jobs that are
processed requires frequent adjustments to
equipment. This causes a discontinuous
work flow, which is referred to as
intermittent processing. The layouts
feature departments or other functional
groupings in which similar kinds of
activities are performed.
Comparison of Process and
Product Layouts
In sum, process layouts have both advantages
and disadvantages. The advantages of process
layouts include the following:

1) The systems can handle a variety of

processing requirements.

2) The systems are not particularly vulnerable

to equipment failures.
3. General-purpose equipment is often less
costly than the specialized equipment
used in product layouts and is easier and
less costly to maintain.
4. It is possible to use individual incentive
systems.
The disadvantages of process
layouts include the following:
1. In-process inventory costs can be high if
batch processing is used in manufacturing
systems.
2. Routing and scheduling pose continual
challenges.
3. Equipment utilization rates are low.
4. Material handling is slow and inefficient, and more
costly per unit than in product layouts.
5. Job complexities often reduce the span of supervision
and result in higher supervisory costs than with product
layouts.
6. Special attention necessary for each product or customer
(e.g., routing, scheduling, machine setups) and low
volumes result in higher unit costs than with product
layouts.
7. Accounting, inventory control, and purchasing are much
more involved than with product layouts.
III. Fixed-Position Layouts
Layout in which the product or project
remains stationary, and workers, materials,
and equipment are moved as needed.
Combination Layouts
The three basic layout types are ideal
models, which may be altered to satisfy
the needs of a particular situation. It is
not hard to find layouts that represent
some combination of these pure types.
Cellular Layouts
Layout in which workstations are
grouped into a cell that can process
items that have similar processing
requirements.
VS
Several Techniques Facilitate
Effective Cellular Layout Design
A. Single-minute Exchange of Die (SMED) enables
an organization to quickly convert a machine or
process to produce a different (but similar) product
type. Thus, a single cell can produce a variety of
products without the time-consuming equipment
changeover associated with large batch processes,
enabling the organization to quickly respond to
changes in customer demand.
B. Right-sized Equipment
is often smaller than equipment used in
traditional process layouts, and mobile, so
that it can quickly be reconfigured into a
different cellular layout in a different
location.
 Group Technology
Effective cellular manufacturing must have groups
of identified items with similar processing
characteristics. This strategy for product and
process design is known as group technology
and involves identifying items with similarities
in either Design Characteristics or
manufacturing characteristics, and grouping
them into part families.
Design characteristics include size, shape, and
function; manufacturing or processing
characteristics involve the type and sequence
of operations required. In many cases, design
and processing characteristics are correlated,
although this is not always the case. Thus,
design families may be different from
processing families.
Three Primary Methods for
Accomplishing of Group
Technology

Visual Inspection is the least accurate of

the three but also the least costly and the
simplest to perform.
 Examination of Design and Production Data is
more accurate but much more time-consuming;
it is perhaps the most commonly used method of
analysis.

Production Flow Analysis has a manufacturing

perspective and not a design perspective, because
it examines operations sequences and machine
routings to uncover similarities.
Conversion to cellular production can
involve costly realignment of equipment.
Consequently, a manager must weigh the
benefits of a switch from a process layout
to a cellular one against the cost of
moving equipment as well as the cost and
time needed for grouping parts.
Flexible Manufacturing Systems (FMS) is a
group of machines that include supervisory
computer control, automatic material
handling, and robots or other automated
processing equipment. Reprogrammable
controllers enable these systems to produce a
variety of similar products.
Computer-Integrated Manufacturing
(CIM) is a system to link a broad range of
manufacturing activities, including
engineering design, flexible manufacturing
systems, purchasing, order processing, and
production planning control
Service Layout
Service layouts can often be categorized as

Product - If the service is organized sequentially, with all customers

or work following the same or similar sequence, as it is in a car wash
or a cafeteria line.

Process layouts - are common in services due mainly to the high

degree of variety in customer processing requirements. Examples
include hospitals, supermarkets and department stores, vehicle
repair centers, and banks.

Fixed-position layouts - In a fixed-position service layout (e.g.,

appliance repair, roofing, landscaping, home remodeling, copier
service), materials, labor, and equipment are brought to the
Warehouse and Storage Layouts
The design of storage facilities presents a different
set of factors than the design of factory layouts.
Frequency of order is an important
consideration; items that are ordered frequently
should be placed near the entrance to the facility,
and those ordered infrequently should be placed
toward the rear of the facility
Retail Layouts
The objectives that guide design of manufacturing layouts
often pertain to cost minimization and product flow.
However, with retail layouts such as department stores,
supermarkets, and specialty stores, designers must take into
account the presence of customers and the opportunity to
influence sales volume and customer attitudes through
carefully designed layouts. Traffic patterns and traffic flow
are important factors to consider. Some large retail chains
use standard layouts for all or most of their stores.
Office Layouts
Office layouts are undergoing transformations as the
flow of paperwork is replaced with the increasing use
of electronic communications. This lessens the need to
place office workers in a layout that optimizes the
physical transfer of information or paperwork.
Another trend is to create an image of openness; office
walls are giving way to low-rise partitions, which also
facilitate communication among workers.
Restaurant Layouts
There are many different types of restaurants,
ranging from food trucks to posh
establishments. Many belong to chains, and
some of those are franchises. That type of
restaurant typically adheres to a floor plan
established by the company.
Ed Norman of MVP Services Group, Inc., in Dubuque, IA,
offers this valuable observation:

The single most important element is process workflow.

Food and non-food products should transition easily
through the operation from the receiving door to the
customer with all phases of storage, pre-preparation,
cooking, holding, and service, unimpaired or
minimized due to good design.
Hospital Layouts
Key elements of hospital layout design are
patient care and safety, with easy access to
critical resources such as X-ray, CAT
scan, and MRI equipment. General layout
of the hospital is one aspect of layout,
while layout of patient rooms is another.
No one expects a stay in a hospital room to be unsafe or having to endure
disruptions in their care, although today, there is need for improvement in
hospital room safety and patient care.The following are suggestions for an
improved hospital room of the future.
Automation in Services
It is one increasingly used alternative. For
example, financial services use ATMs,
automated call answering, online banking, and
electronic funds transfers; retail stores use
optical scanning to process sales; and the travel
industry uses electronic reservation systems.