FACILITIES LOCATION AND LAYOUT

KELOMPOK I : LEONARD MERARI 122140085 FIRDAUS ALBARQONI 122140058 RAMADHAN DWI PUTRA 122140159 ERWIN HENRYCO RAJAGUKGUK 122140049

• Overview• Location• Factor Influencing Location• Identify Ideal Location• Layout• Principles of Layout• Type of Layout• Activity Relation Chart

CONTENT

Overview

• Facilities Planning is the process planning new facilities and revising or expanding old capacities. Facility location is the process of determining geographic sites for a firm’s operations.

• Facility Layout is the process of determining the placement of departments, workgroups, workstations, machines and stock holding points within facility are determined, and requires following inputs :- Specification of system objectives in terms of output and flexibility- Estimation of product or service demand on the system- Processing requirements in terms of number of operations and amount of flow between

departments and work centers- Space requirements for the elements in the layout- Space availability within the facility itself

Overview

Why Facility Planning?

• 20-50% of the total expenses within manufacturing are attributed to materials handling. Effective facilities planning can reduce the material handling costs by at least 10-30%

• To be competitive, very few companies will be able to retain all of their old facilities or layouts

- Productivity improvements through elimination or reduction of unnecessary activities- Improved health and safety - To conserve & reduce consumption of energy- Must conform to new rules, regulations, and standards- lower the risk of fire, lower maintenance costs, etc.

Reason for firm should look for additional or alternate location• To establish new venture• Expansion of existing business• Changes in demand and supply• Company policy on diversification and change of working condition• Changing in government policy

Location

Location

Scenario for Management :- Make or Buy decision- Sub-contract instead of expansion- Expand existing organization- Dispose of the existing plant and build new one

Location

Importance of Location1. Competition2. Cost3. Indirect Benefits

Location

Comparison between Urban and Rural Locations

1. Proximity to markets2. Supply of raw material3. Transport facilities4. Infrastruture availability5. Labour and wages

Factor Influencing Location

Factor Influencing Location

6. Law and Taxation7. Suitability of Land and Climate8. Supporting industries and services9. Community and Labour attitudes10. Social Infrastructure

Identify Ideal Location

1. Factor rating method2. Weighted factor rating method3. Load-distance method4. Centre of gravity method5. Break even analysis

Identify Ideal Location – Factor Rating Method

Location factor Factor rating Rating

Location 1 Location 2

Facility utilization 8 3 5

Total patient per month 5 4 3

Employee preferences 5 5 3

Location factor Factor rating Location 1 Location 2Rating Total Rating Total

Facility utilization 8 3 24 5 40Total patient per month 5 4 20 3 15Employee preferences 5 5 25 3 15

Total 69 Total 70

Identify Ideal Location – Weighted Factor Rating Method

Location factor Weight Location 1 Location 2Scores Total Scores Total

Facility utilization 25 3 75 5 125Total patient per month 25 4 100 3 75Average time per emergency trip 25 3 75 3 75Land and construction costs 15 1 15 2 30

Employee preferences 10 5 50 3 30

Total 315 Total 335

Identify Ideal Location – Load Distance Method

The load-distance method is a mathematical model used to evaluate locations based on proximity factors. The objective is to select a location that minimizes the total weighted loads moving into and out of the facility. The distance between two points is expressed by assigning the points to grid coordinates on a map. An alternative approach is to use time rather than distance.

A Load-Distance Model Example: Matrix Manufacturing is considering where to locate its warehouse in order to service its four Ohio stores located in Cleveland, Cincinnati, Columbus, Dayton. Two sites are being considered; Mansfield and Springfield, Ohio. Use the load-distance model to make the decision.• Calculate the rectilinear distance :

miles 4515401030dAB

Identify Ideal Location – Load Distance Method

• Multiply by the number of loads between each site and the four cities

• The load distance score for Mansfield > Springfield. The Warehouse should be located in springfield

Computing the Load-Distance Score for SpringfieldCity Load Distance ld

Cleveland 15 20.5 307.5Columbus 10 4.5 45Cincinnati 12 7.5 90Dayton 4 3.5 14

Total Load-Distance Score(456.5)

Computing the Load-Distance Score for MansfieldCity Load Distance ld

Cleveland 15 8 120Columbus 10 8 80Cincinnati 12 20 240Dayton 4 16 64

Total Load-Distance Score(504)

Note : Load : no of trip from origin to

destination in certain period (week, month , year)

Id : load distance score

Identify Ideal Location – Center of Gravity Method

Center of gravity1. Determine the x and y coordinates of different locations either in the form of the

longitude and latitude of the locations, or by creating an (x, y) grid.2. The center of gravity’s x-coordinate, denoted x*, is found by multiplying each point’s x-

coordinate (either the longitude of the location or the x coordinate on a grid), by its load (li), summing these products (Σ lixi), and then dividing by the sum of the loads (Σ li). The y-coordinate, denoted y*, is found the same way.

Identify Ideal Location – Center of Gravity Method

Census Trac t Population Latitude Longitude Population Latitude Population Longitude 15 2,711 42.134 -80.041 114,225.27 -216,991.15 16 4,161 42.129 -80.023 175,298.77 -332,975.70 17 2,988 42.122 -80.055 125,860.54 -239,204.34 25 2,512 42.112 -80.066 105,785.34 -201,125.79 26 4,342 42.117 -80.052 182,872.01 -347,585.78 27 6,687 42.116 -80.023 281,629.69 -535,113.80 28 6,789 42.107 -80.051 285,864.42 -543,466.24

Tota l 30,190 1,271,536.05 -2,416,462.81

x 1,271,536.05

30,19042.1178

y 2,416,462.81

30,190 80.0418

x lixi

ili

i

and y li

i yi

lii

x* is the longitude and y* is the latitude for the center of gravity.

Identify Ideal Location – Break Even Analysis

Break Even Analysis1. For each location, determine the fixed and variable costs2. Plot the total costs for each location on one graph3. Identify ranges of output for which each location has the lowest total cost4. Solve algebraically for the break-even points over the identified range

Identify Ideal Location – Break Even Analysis

Example 9.6 Using Break-Even AnalysisLocation Fixed Cost Variable Cost Total Cost

A $350,000 $ 5(10,000) $400,000B $170,000 $25(10,000) $420,000C $100,000 $40(10,000) $500,000D $250,000 $20(10,000) $450,000

From the graph you can see that the two lowest cost intersections occur between C & B (4667 units) and B & A (9000 units)The best alternative up to 4,667 units is C, between 4,667 and 9,000 units the best is B, and above 9,000 units the best site is A

Layout – Definition of Plant Layout

Plant layout is a plan of an optimum arrangement of facilities including Personnel , operating equipment, storage space, material handling , equipment and all other supporting services along with the design of best structure to contain all these facilities” (Moore)

Layout – Objective of Facility Layout

1. Streamline the flow of materials through the plant.

2. Facilitate the manufacturing process

3. Maintain high turnover of in-process inventory.

4. Minimize materials handling and cost.

5. Effective utilization of men, equipment and space.

6. Flexibility of manufacturing operations and arrangements.

7. Provide for employee convenience, safety and comfort.

8. Minimize investment in equipment.

9. Minimize overall production time.

10. Facilitate the organizational structure.

Layout – Objective of Facility Layout

Principles of Layout

1. Principle of integration2. Principle of minimum distance3. Principle of cubic space utilization4. Principle of flow5. Principle of maximum flexibility6. Principle of safety, security and satisfaction7. Principle of minimum handling

Type of Layout

1. Process Layout2. Product Layout3. Combination Layout4. Fixed Position Layout

Type of Layout – Process Layout

Advantage :• Flexibility • better utilization of production facility• Lower investment• Increase knowledge of supervisors

Type of Layout – Product Layout

Advantage :• In-process inventory is less• Decrease handling cost• Mechanized handling systems • Unskilled workers can learn and manage the production.• Manufacturing cycle is short due to uninterrupted flow of materials.

Limitation of Product Layout• Stop entire production• Difficult to change product design • Required high investment• Lack of flexibility

Type of Layout – Product Layout

Type of Layout – Combination Layout

Type of Layout – Fixed Position Layout

Advantage :• Interest and pride in doing the job• Enlargement and upgrades the skills• Flexibility• Layout capital investment is lower.

An activity relationship chart is a graphical tool used to represent importance of locating pairs of operations near each other.

Importance is described using letter codes defined below:A - absolutely necessaryE - especially important I - importantO - ordinarily importantU - unimportantX - undesirable

Activity Relation Chart (ARC)

Interpretation of the diagram :To find how important it is to locate office rooms near loading/unloading area, find the diamond shaped block at the intersection of office rooms and loading/unloading area. The block contains “O” meaning ordinarily important. Therefore, it’s ordinarily important to locate office rooms near loading/unloading area.

Activity Relation Chart (ARC)

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