Facilities Location, Layout and Planning
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Transcript of Facilities Location, Layout and Planning
Facilities Location, Layout and Planning
FACILITY PLANNING
• The placement of facility – customers, suppliers, other links in the supply chain
• Resources• Strategy – 99cents Only example• Access to customers• Government impacts
Objectives of Facility Layout
Minimize material handling costsMinimize material handling costs Utilize space efficientlyUtilize space efficiently Utilize labor efficientlyUtilize labor efficiently Eliminate bottlenecksEliminate bottlenecks Facilitate communication and interaction Facilitate communication and interaction
between workers, between workers and their between workers, between workers and their supervisors, or between workers and customerssupervisors, or between workers and customers
Reduce manufacturing cycle time or customer Reduce manufacturing cycle time or customer service timeservice time
Objectives of Facility Layout
Eliminate waste or redundant movementEliminate waste or redundant movement Facilitate the entry, exit, and placement of Facilitate the entry, exit, and placement of
material, products, or peoplematerial, products, or people Incorporate safety and security measuresIncorporate safety and security measures Promote product and service qualityPromote product and service quality Encourage proper maintenance activitiesEncourage proper maintenance activities Provide a visual control of operations or Provide a visual control of operations or
activitiesactivities Provide flexibility to adapt to changing Provide flexibility to adapt to changing
conditionsconditions Increase capacityIncrease capacity
Questions on Layout Planning
• How should the facility be laid out?• Does my layout cause unnecessary
movement/excess travel time?• Does my work flow in a logical manner?• Does size dictate layout or does
layout/product flow dictate the size?
Process LayoutProcess Layout Machines grouped by process they performMachines grouped by process they perform
Product LayoutProduct Layout Linear arrangement of workstations to produce a Linear arrangement of workstations to produce a
specific productspecific product Fixed Position LayoutFixed Position Layout
Used in projects where the product cannot be movedUsed in projects where the product cannot be moved
Basic Types of Layouts
Manufacturing Process Layout
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Lathe DepartmentMilling
Department Drilling Department
Grinding Department
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Manufacturing Process Layout
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Grinding Department
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Manufacturing Process Layout
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Grinding Department
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Fixed-Position Layouts
Typical of projectsEquipment, workers, materials, other
resources brought to the siteHighly skilled laborOften low fixed Typically high variable costs
Designing Process Layouts
Minimize material handling costs Block Diagramming
Minimize nonadjacent loads Use when quantitative data
is available Relationship Diagramming
Based on location preference between areas Use when quantitative data is not available
Block Diagramming Create load summary chartCreate load summary chart Calculate composite (two way) movementsCalculate composite (two way) movements Develop trial layouts minimizing number of Develop trial layouts minimizing number of
nonadjacent loadsnonadjacent loads
ExampleExample
Relationship Diagramming(Murther’s Grid)
Used when quantitative data is not available
Muther’s grid displays preferences
Denote location preferences with weighted lines
Relationship Diagramming Example
ProductionProduction
OfficesOffices
StockroomStockroom
Shipping and Shipping and receivingreceiving
Locker roomLocker room
ToolroomToolroom
Relationship Diagramming Example
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ProductionProduction
OfficesOffices
StockroomStockroom
Shipping and Shipping and receivingreceiving
Locker roomLocker room
ToolroomToolroom
A Absolutely necessaryE Especially importantIImportantO OkayUUnimportantX Undesirable
Relationship Diagramming Example
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ProductionProduction
OfficesOffices
StockroomStockroom
Shipping and Shipping and receivingreceiving
Locker roomLocker room
ToolroomToolroom
1 Absolutely necessary2 Especially important3 Important4 Okay5 Unimportant6 Undesirable
Facility Location Facility Location ModelsModels
Types Of Facilities
Heavy manufacturingAuto plants, steel mills, chemical plants
Light industrySmall components mfg, assembly
Warehouse & distribution centersRetail & service
Factors in Heavy Manufacturing Location
Construction costsLand costsRaw material and finished goods
shipment modesProximity to raw materialsUtilitiesLabor availability
Factors in Light Industry Location
Construction costsConstruction costs Land costsLand costs Easily accessible Easily accessible
geographic regiongeographic region Education & training capabilitiesEducation & training capabilities
Factors in Warehouse Location
Transportation costsProximity to markets (Customers)
Service Location Considerations
• Labor• Cost of Living • Real Estate• Construction• Government Incentives• Examples – Amoco, Mass St, Tattoo Parlors,
Walgreen’s
Global Location Factors Government stability Government regulations Political and economic systems Economic stability and growth Exchange rates Culture Climate Export import regulations,
duties and tariffs
Raw material availability Number and proximity of
suppliers Transportation and
distribution system Labor cost and education Available technology Commercial travel Technical expertise Cross-border trade regulations Group trade agreements
Regional Location Factors Community government Local business regulations Government services Business climate Community services Taxes
Availability of sites Financial Services Community inducements Proximity of suppliers Education system
Site Location Factors
Customer baseConstruction/ leasing
cost Land costSite sizeTransportationUtilities
Zoning restrictionsTrafficSafety/securityCompetitionArea business climate Income level
Location Incentives
Tax credits Wal-Mart in WyandotteRelaxed government regulation Job training Infrastructure improvementMoney
Locate facility at center of geographic area Based on weight and distance traveled Establish grid-map of area Identify coordinates and weights shipped
for each location
Center-of-Gravity Technique
Facility Summary
• Why is it important?• Location analysis • Location Criteria – global, local, regional -
education• Location and Strategy• Location and Customers• Layout planning
Project Managementand Operations
Project Project ManagementManagement
First Essay on Project Management:1697 – “An Essay Upon Projects”
1959 HBR Article – “The Project Manager”
Air Force Manual 1964
Project Management
In today’s global marketplace, complexity and speed are certainties. In such an environment, a good axiom for project management is, Do It, Do It Right, Do It Right Now. Creating clear direction, efficiency, timely response, and quality outcomes requires project managers who are agile -- adept at change. The associated disciplinary areas are clearly spelled out in the following PMI definition.
“Project management is the application of knowledge, skills, tools, and techniques to a broad range of activities in order to meet the requirements of a particular project. Project management is comprised of five Project Management Process Groups – Initiating Processes, Planning Processes, Executing Processes, Monitoring and Controlling Processes, and Closing Processes.
Source: Project Management Institute - http://www.pmi.org/info/PP_AboutProfessionOverview.asp?nav=0501
Elements of Project Management
Project team Individuals from different departments within company
Matrix organization Team structure with members from different functional areas
depending on skills needed Project manager - Leader of project team Project Charter – high level description of what is to be
accomplished in a project and delegates authority to project manager to implement actions to complete project
Project PlanningStatement of work
Written description of goals, work & time frame of project
Activities require labor, resources & timePrecedence relationship shows sequential
relationship of project activities
Elements of Project Planning
Define project objective(s) Identify activitiesEstablish precedence relationshipsMake time estimatesDetermine project completion timeCompare project schedule objectivesDetermine resource requirements to meet
objective
Work Breakdown Structure
Hierarchical organization of work to be done on a project
Project broken down into modulesModules subdivided into subcomponents,
activities, and tasks Identifies individual tasks, workloads, and
resource requirements
Project Control
All activities identified and includedCompleted in proper sequenceResource needs identifiedSchedule adjustedMaintain schedule and
budgetComplete on time
A Gantt Chart
Popular tool for project scheduling Graph with bar for representing the time for
each task Provides visual display of project schedule Also shows slack for activities - amount of time
activity can be delayed without delaying project
Around since 1914
A Gantt Chart| | | | |
Activity
Design house and obtain financing
Lay foundation
Order and receive materials
Build house
Select paint
Select carpet
Finish work
00 22 44 66 88 1010MonthMonth
MonthMonth11 33 55 77 99
CPM/PERTCritical Path Method (CPM)
DuPont & Remington-Rand (1956) Deterministic task times
Project Evaluation & Review Technique (PERT)
US Navy, Lockheed Multiple task time estimates
Project Network for a House
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Lay Lay foundationfoundation
Design house Design house and obtain and obtain financingfinancing
Order and Order and receive receive materialsmaterials
DummyDummy
Finish Finish workwork
Select Select carpetcarpet
Select Select paintpaint
Build Build househouse
Critical Path A path is a sequence of connected
activities running from start to end node in network
The critical path is the path with the longest duration in the network
Project cannot be completed in less than the time of the critical path
The Critical Path
A: 1-2-3-4-6-73 + 2 + 0 + 3 + 1 = 9 months
B: 1-2-3-4-5-6-73 + 2 + 0 + 1 + 1 + 1 = 8 months
C: 1-2-4-6-73 + 1 + 3 + 1 = 8 months
D: 1-2-4-5-6-73 + 1 + 1 + 1 + 1 = 7 months
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Design house Design house and obtain and obtain financingfinancing
Order and Order and receive receive materialsmaterials
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Finish Finish workwork
Select Select carpetcarpet
Select Select paintpaint
Build Build househouse
The Critical Path 33
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Design house Design house and obtain and obtain financingfinancing
Order and Order and receive receive materialsmaterials
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Finish Finish workwork
Select Select carpetcarpet
Select Select paintpaint
Build Build househouse
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Start at 5 months
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Figure 6.6
Activity Start Times
Project Crashing
Crashing is reducing project time by expending additional resources
Crash time is an amount of time an activity is reduced
Crash cost is the cost of reducing the activity time
Goal is to reduce project duration at minimum cost
Crashing costs increase as project duration decreases
Indirect costs increase as project duration increases
Reduce project length as long as crashing costs are less than indirect costs
Time-Cost Relationship
Life Cycle Management• Long term view of projects to guide decision making
– solutions that provide life time success vice short term
• Acquisition; development; production; introduction; sustainment; disposal
• Links system costs to big picture; better use of resources; minimize total cost of ownership
Capacity and Capacity and Aggregate Aggregate Planning Planning
Capacity Outputs: Examples
Type of Business Input Measures of Capacity
Output Measures of Capacity
Car manufacturer Labor hours Cars per shift
Hospital Available beds Patients per month
Pizza parlor Labor hours Pizzas per day
Retail store Floor space in square feet Revenue per foot
The goal of capacity planning decisions
(1) The capacity of the firm to produce the service or good
(2) The processes for providing the service or making the good
(3) The layout or arrangement of the work space
(4) The design of work processes to enhance productivity
Capacity
• The max output that an organization be capable of producing
• Measure a single facility:– Design vs. Effective capacity– Capacity Utilization: design vs. efficient utilization
• For systems have more than one facility and flows of product– System capacity and bottleneck– Improve system capacity
Determinants of Effective Capacity• Facilities• Human considerations
– Adding people– Increasing employee motivation
• Operations– Improving operating rate of a machine– Improving quality of raw materials and components
• External forces– Safety regulations
Capacity Utilization
Measures how much of the available capacity is actually being used:
– Always <=1(percentage of usage)– Higher the better– Denominator:
• If effective capacity used: efficient utilization• If design capacity used: design utilization
actual output rateUtilization 100%available capacity
Capacity Planning
• The process of determining the amount of capacity required to produce in the future. May be at the aggregate or product line level
• Master Production Schedule - anticipated build schedule
• Time horizon must exceed lead times for materials
Capacity Planning• Look at lead times, queue times, set up times, run times, wait
times, move times• Resource availability• Material and capacity - should be in synch• driven by dispatch list - listing of manufacturing orders in
priority sequence - ties to layout planning• load profiles - capacity of each section
the capacity decisions:
• When to add capacity• How much capacity to add• Where to add capacity• What type of capacity to add• When to reduce capacity
Capacity Planning
• Rough Cut Capacity Planning - process of converting the master production schedule into requirements for key resources
• capacity requirements plan - time-phased display of present and future capacity required on all resources based on planned and released orders
Capacity Planning
• Capacity Requirements Planning (CRP) - process of determining in detail the amount of labor and machine resources required to meet production plan
• RCCP may indicate sufficient capacity but the CRP may indicate insufficient capacity during specific time periods
Theory of Constraints
• Every system has a bottle neck• capacity of the system is constrained by the
capacity of the bottle neck• increasing capacity at other than bottle
neck operations does not increase the overall capacity of the system
Theory of Constraints
• What needs to be changed• What to change to • How to make the change happen
Capacity Planning
Establishes overall level of productive resources
Affects lead time responsiveness, cost & competitiveness
Determines when and how much to increase capacity
Capacity Expansion
Volume & certainty of anticipated demand
Strategic objectives for growthCosts of expansion & operation Incremental or one-step expansion
Sales and Operations Planning (S&OP)
• Brings together all plans for business• performed at least once a month• Internal and external
Adjusting Capacity to Meet Demand
1. Producing at a constant rate and using inventory to absorb fluctuations in demand (level production)
2. Hiring and firing workers to match demand (chase demand)
3. Maintaining resources for high demand levels4. Increase or decrease working hours (overtime
and undertime)5. Subcontracting work to other firms6. Using part-time workers7. Providing the service or product at a later time
period (backordering)
Demand Management
Shift demand into other periods Incentives, sales promotions, advertising
campaignsOffer product or services with
countercyclical demand patternsPartnering with suppliers to reduce
information distortion along the supply chain