9
Layout Strategies
© 2011 Pearson Education, Inc. publishing as Prentice Hall
9-1
Outline
 The Strategic Importance of Layout
Decisions
 Types of Layout:
1. Office Layout
2. Retail Layout
3. Warehousing and Storage Layouts
4. Process-Oriented Layout
5. Fixed-Position Layout
6. Work Cells
7. Product-Oriented Layout
© 2011 Pearson Education, Inc. publishing as Prentice Hall
9-2
Learning Objectives
When you complete this chapter, you
should be able to:
1. Define important issues in 7
types of layouts.
2. Learn how to balance
production flow in a productoriented facility
© 2011 Pearson Education, Inc. publishing as Prentice Hall
9-3
Innovations at McDonald’s
 Indoor seating (1950s)
 Drive-through window (1970s)
 Adding breakfast to the menu
(1980s)
 Adding play areas (late 1980s)
 Redesign of the kitchens (1990s)
 Self-service kiosk (2004)
 Now three separate dining sections
© 2011 Pearson Education, Inc. publishing as Prentice Hall
9-4
Innovations at McDonald’s
 Indoor seating (1950s)
 Drive-through window (1970s)
 Adding breakfast to Six
the out
menu
of the
(1980s)
seven are
 Adding play areas (late layout
1980s)
decisions!
 Redesign of the kitchens (1990s)
 Self-service kiosk (2004)
 Now three separate dining sections
© 2011 Pearson Education, Inc. publishing as Prentice Hall
9-5
McDonald’s New Layout
 Redesigning all 30,000 outlets around
the world to have three separate
dining areas:
 Linger zone with comfortable chairs and
Wi-Fi connections
 Grab and go zone with tall counters
 Flexible zone for kids and families
(tables and chairs are movable)
 Facility layout is a source of
competitive advantage
© 2011 Pearson Education, Inc. publishing as Prentice Hall
9-6
Strategic Importance of
Layout Decisions
Developing an effective
and efficient layout that
will meet the firm’s
competitive requirements
will contribute a lot to the
profitabilitity of the firm
© 2011 Pearson Education, Inc. publishing as Prentice Hall
9-7
Objectives in Layout Design
 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
© 2011 Pearson Education, Inc. publishing as Prentice Hall
9-8
A good Layout Requires
Determining the Following
 Material handling equipment (manual
hand trucks, conveyors, cranes, AGVs)
 Cost of moving material between work
areas
 Capacity and space requirements
 Environment and aesthetics (windows,
height and walls of the offices to
facilitate air flow, to reduce noise etc.)
 Information flow (open offices versus
dividers)
© 2011 Pearson Education, Inc. publishing as Prentice Hall
9-9
Types of Layout
1. Office layout
2. Retail layout
3. Warehouse layout
4. Fixed-position layout
5. Process-oriented layout
6. Work-cell layout
7. Product-oriented layout
© 2011 Pearson Education, Inc. publishing as Prentice Hall
9 - 10
1. Office Layout
 Grouping of employees, their equipment,
and spaces to provide comfort, safety, and
movement of information
 Movement of
information is main
distinction
 It is affected a lot by
technological
changes
© 2011 Pearson Education, Inc. publishing as Prentice Hall
9 - 11
Relationship Chart: A tool to use in
Office Layout Decisions
Figure 9.1
© 2011 Pearson Education, Inc. publishing as Prentice Hall
9 - 12
2. Retail Layout
Retail layouts (as are found in stores,
and restaurants) are based on the idea
that sales and profitability vary directly
with customer exposure to products
 Objective is to maximize profitability
per square foot of floor space by
exposing the customers to as many
products as possible
 Sales and profitability vary directly
with customer exposure
© 2011 Pearson Education, Inc. publishing as Prentice Hall
9 - 13
Store Layout
Figure 9.2
© 2011 Pearson Education, Inc. publishing as Prentice Hall
9 - 14
Retail Slotting
 Due to:
 Limited shelf space
 An increasing number of new
products
Manufacturers pay fees to retailers (up to
$2500) to get the retailers to display (slot)
their product
Small companies complain about unfair
competition
Wal-Mart is one of the few major retailers
that does not demand slotting fees.
© 2011 Pearson Education, Inc. publishing as Prentice Hall
9 - 15
Planogram
Shampoo
Shampoo
Shampoo
Shampoo
Conditioner
Shampoo
Shampoo
Shampoo
Conditioner
Conditioner
© 2011 Pearson Education, Inc. publishing as Prentice Hall
Shampoo
 It is a diagram that
shows where a
product should be
placed on a shelf
and how many
faces that product
should hold. Often
supplied by the
manufacturerer
5 facings
Shampoo
 A planogram is a
computerized
marketing tool
used in retail
stores.
2 ft.
9 - 16
Servicescapes
The physical surroundings in which a
service takes place, and how they affect
customers and employees
1. Ambient conditions - background music,
lighting, smell, and temperature (Leather
chairs at Starbucks, Cinnamon smell at
Tarchy)
2. Layout/Functionality – The wide aisles at
METRO, Carpeted areas of a department
store that encourage shoppers to slow
down and browse)
3. Signs, symbols, and artifacts – Guitars
on Hard Rock Cafes’s Walls.
© 2011 Pearson Education, Inc. publishing as Prentice Hall
9 - 17
3. Warehousing and Storage
Layouts
 Objective is to optimize trade-offs
between handling costs and costs
associated with warehouse space
 Maximize the total “cube” of the
warehouse – utilize its full volume
while maintaining low material
handling costs
© 2011 Pearson Education, Inc. publishing as Prentice Hall
9 - 18
Automated Storage and
Retrieval Systems (ASRSs)
 ASRSs can significantly
improve warehouse
productivity.
 Random stocking Vs
Dedicated Stocking:
Typically requires
Automatic Identification
Systems (AISs) and
effective information
systems.
© 2011 Pearson Education, Inc. publishing as Prentice Hall
9 - 19
Cross-Docking
 Materials are moved directly from
receiving to shipping and are not placed
in storage in the warehouse
 Requires tight
scheduling and
accurate product
identification
 The global retail giant,
Wal-Mart uses this
strategy to gain a huge competitive
advantage over it’s competitors.
© 2011 Pearson Education, Inc. publishing as Prentice Hall
9 - 20
Customizing
 Value-added activities are performed at
the warehouse (warehouse assembly
jobs are common nowadays)
 Enable low cost and rapid response
strategies (Warehouses adjacent to major
Airports)
 Assembly of components
 Loading software
 Repairs
 Customized labeling and packaging
© 2011 Pearson Education, Inc. publishing as Prentice Hall
9 - 21
4. Fixed-Position Layout
 Product remains in one place,
workers and equipment come to
site
 Preferred where the size of the
job is bulky and heavy. Example
of such type of layout is
locomotives, ships, wagon
building, aircraft manufacturing,
etc.
© 2011 Pearson Education, Inc. publishing as Prentice Hall
9 - 22
5. Process-Oriented Layout
 Similar machines and equipment
are grouped together
 Flexible and capable of handling a
wide variety of products or
services
 Scheduling can be difficult and
setup, material handling, and
labor costs can be high
© 2011 Pearson Education, Inc. publishing as Prentice Hall
9 - 23
Process-Oriented Layout
Patient A - broken leg
ER
triage
room
Emergency room admissions
Patient B - erratic heart
pacemaker
Surgery
Laboratories
Radiology
ER Beds
Pharmacy
Billing/exit
Figure 9.3
© 2011 Pearson Education, Inc. publishing as Prentice Hall
9 - 24
Manufacturing Process
Layout
Lathe Department
L
L
L
L
L
L
L
L
L
L
Milling
Department
Drilling Department
M
M
D
D
D
D
M
M
D
D
D
D
G
G
G
P
G
G
G
P
Grinding
Department
Receiving and
Shipping
Painting Department
A
A
A
Assembly
9 - 25
Process-Oriented Layout
 Arrange work centers so as to
minimize the costs of material
handling
 Basic cost elements are
 Number of loads (or people)
moving between centers
 Distance loads (or people) move
between centers
© 2011 Pearson Education, Inc. publishing as Prentice Hall
9 - 26
Process-Oriented Layout
n
Minimize cost = ∑
n
∑ Xij Cij
i=1 j=1
where
n = total number of work centers or
departments
i, j = individual departments
Xij = number of loads moved from
department i to department j
Cij = cost to move a load between
department i and department j
© 2011 Pearson Education, Inc. publishing as Prentice Hall
9 - 27
Process Layout Example
Area 1
Area 2
Area 3
Assembly
Department
(1)
Painting
Department
(2)
Machine Shop
Department
(3)
40’
Figure 9.5
Receiving
Department
(4)
Shipping
Department
(5)
Testing
Department
(6)
Area 4
Area 5
Area 6
© 2011 Pearson Education, Inc. publishing as Prentice Hall
60’
9 - 28
From-to Matrix
Number of loads per week
Department Assembly Painting
(1)
(2)
Assembly (1)
50
Painting (2)
Machine Shop (3)
Receiving (4)
Shipping (5)
Machine Receiving
Shop (3)
(4)
Shipping
(5)
Testing
(6)
100
0
0
20
30
50
10
0
20
0
100
50
0
0
Testing (6)
Figure 9.4
© 2011 Pearson Education, Inc. publishing as Prentice Hall
9 - 29
Process Layout Example
Interdepartmental Flow Graph
100
Assembly
(1)
50
Painting
(2)
30
Machine
Shop (3)
10
100
Receiving
(4)
50
Shipping
(5)
Testing
(6)
Figure 9.6
© 2011 Pearson Education, Inc. publishing as Prentice Hall
9 - 30
Process Layout Example
 The cost of moving one load
between adjacent departments
is estimated to be $1.
 Moving a load between
nonadjecent departments costs
$2.
© 2011 Pearson Education, Inc. publishing as Prentice Hall
9 - 31
Process Layout Example
n
Cost = ∑
n
∑ Xij Cij
i=1 j=1
Cost =
$50
+ $200 +
$40
(1 and 2)
(1 and 3)
(1 and 6)
+
$30
+
$50
+
$10
(2 and 3)
(2 and 4)
(2 and 5)
+
$40
+ $100 +
$50
(3 and 4)
(3 and 6)
(4 and 5)
= $570
© 2011 Pearson Education, Inc. publishing as Prentice Hall
9 - 32
Process Layout Example
Revised Interdepartmental Flow Graph
30
Painting
(2)
50
Assembly
(1)
100
Machine
Shop (3)
100
50
Receiving
(4)
50
Shipping
(5)
Testing
(6)
Figure 9.7
© 2011 Pearson Education, Inc. publishing as Prentice Hall
9 - 33
Process Layout Example
n
Cost = ∑
n
∑ Xij Cij
i=1 j=1
Cost =
$50
+ $100 +
$20
(1 and 2)
(1 and 3)
(1 and 6)
+
$60
+
$50
+
$10
(2 and 3)
(2 and 4)
(2 and 5)
+
$40
+ $100 +
$50
(3 and 4)
(3 and 6)
(4 and 5)
= $480
© 2011 Pearson Education, Inc. publishing as Prentice Hall
9 - 34
Process Layout Example
Area 1
Area 2
Area 3
Painting
Department
(2)
Assembly
Department
(1)
Machine Shop
Department
(3)
40’
Figure 9.8
Receiving
Department
(4)
Shipping
Department
(5)
Testing
Department
(6)
Area 4
Area 5
Area 6
© 2011 Pearson Education, Inc. publishing as Prentice Hall
60’
9 - 35
Computer Software
 Graphical approach only works for
small problems
 Computer programs are available to
solve bigger problems
 CRAFT
 ALDEP
 CORELAP
 Factory Flow
© 2011 Pearson Education, Inc. publishing as Prentice Hall
9 - 36
6. Work Cells
 Reorganizes people and machines into
groups to focus on single products or
product groups (PART FAMILIES)
 Group technology is a philosophy
wherein similar products are grouped
together
 Processes required to make these
similar parts are arranged as Work Cells
 Similarity can be either in shape, size or
in manufacturing process
 Production Volume must justify forming
the cells
© 2011 Pearson Education, Inc. publishing as Prentice Hall
9 - 37
Part families
Part families with
similarity in
manufacturing process
Part families with
similarity in shape
9 - 38
Original Process Layout
Assembly
4
6
7
8
5
2
A
B
12
10
3
1
9
C
11
Raw materials
9 - 39
Part Routing Matrix
Parts
1
2
A
B
C
D
E
F
G
H
x
x
Figure 5.8
3
Machines
4 5 6 7
8 9 10 11 12
x
x
x
x
x
x
x
x
x
x
x
x
x
x x
x
x
x
x
x
x
x
x
x
x
x
x
x
9 - 40
Reordered Routing Matrix
Parts
1
2
4
Machines
8 10 3 6
A
D
F
C
G
B
H
E
x
x
x
x
x
x
x
x
x x
x x
x
x
x
x
x
9 5
x
x
x
x
7 11 12
x
x
x
x
x
x
x
x
x
9 - 41
Revised Cellular Layout
Assembly
8
10
9
12
11
4
Cell 1
Cell 2
6
Cell 3
7
2
1
3
5
A B C
Raw materials
9 - 42
Advantages of Work Cells
1. Reduced work-in-process
inventory
2. Less floor space required
3. Reduced direct labor, and setup
cost
4. More employee participation
5. Increased use of equipment and
machinery
© 2011 Pearson Education, Inc. publishing as Prentice Hall
9 - 43
Staffing and Balancing
Work Cells
Determine the takt time (Also called cycle time)
Takt time =
Total work time available per day
Required output per day (in units)
Determine the number
of operators required
Total operation time required
Workers required =
Takt time
© 2011 Pearson Education, Inc. publishing as Prentice Hall
9 - 44
Staffing Work Cells
Example
Takt time?
# of workers required?
Standard time required
Required output: 600 Auto Mirrors
per day
Total work time: 8 hours per day 60
Total operation time
per mirror =140 seconds
50
40
30
20
10
0
© 2011 Pearson Education, Inc. publishing as Prentice Hall
Assemble Paint
Test
Label Pack for
shipment
Operations
9 - 45
Staffing Work Cells Example
600 Mirrors per day required
Mirror production scheduled for 8 hours per day
From a work balance chart total operation time
= 140 seconds
Takt time = (8 hrs x 60 mins) / 600 units
= .8 mins = 48 seconds
Total operation time required
Workers required =
Takt time
= 140 / 48 = 2.91
© 2011 Pearson Education, Inc. publishing as Prentice Hall
9 - 46
Focused Work Center and
Focused Factory
 Focused Work Center (Plant within the plant)
 Production moves from a general-purpose,
process-oriented facility to a productoriented large work cell producing a family
of similar products. Example: Only bumpers
and dashboards are produced in Toyota’s
Texas Plant.
 Focused Factory (manufacturing/service)
 A focused work cell in a separate facility
Examples are: Silhouette, A world leading
international frame manufacturer based in
Austria. Children Hospital, Maternity Hospital
© 2011 Pearson Education, Inc. publishing as Prentice Hall
9 - 47
7. Repetitive and ProductOriented Layout
Organized around products or families of
similar high-volume, low-variety products
1. Volume is adequate for high
equipment utilization
2. Product demand is stable enough to
justify high investment in
specialized equipment
3. Product is standardized
© 2011 Pearson Education, Inc. publishing as Prentice Hall
9 - 48
Product-Oriented Layouts
 Fabrication line
 Builds components on a series of machines
 Machine-paced
 Require mechanical or engineering changes
to balance
 Assembly line
 Puts fabricated parts together at a series of
workstations
 Paced by work tasks
 Balanced by moving tasks
Both types of lines must be balanced so that the
time to perform the work at each station is the same
© 2011 Pearson Education, Inc. publishing as Prentice Hall
9 - 49
Product-Oriented Layouts
Advantages
1.
2.
3.
4.
5.
Low variable cost per unit
Low material handling costs
Reduced work-in-process inventories
Easier training and supervision
Rapid throughput
Disadvantages
1. High production volume is required to be
justifiable
2. Work stoppage at any point ties up the
whole operation
3. Lack of flexibility in product or production
rates
© 2011 Pearson Education, Inc. publishing as Prentice Hall
9 - 50
Production/Assembly Line
Raw
materials
or customer
Materials
and/or
labor
Station
1
Station
2
Materials
and/or
labor
Materials
and/or
labor
Station
3
Station
4
Finished
item
Materials
and/or
labor
Used for Repetitive or Continuous Processing
Example: automobile assembly lines, cafeteria serving line
9 - 51
U-Shaped Production Line
In
1
2
3
4
5
Workers
6
Out
10
9
8
7
9 - 52
McDonald’s Assembly Line
Figure 9.12
© 2011 Pearson Education, Inc. publishing as Prentice Hall
9 - 53
Disassembly Lines
 Disassembly is being considered in new
product designs
 “Green” issues and recycling standards are
important consideration
 Automotive
disassembly
is the 16th
largest
industry in
the US
© 2011 Pearson Education, Inc. publishing as Prentice Hall
9 - 54
Assembly-Line Balancing
 Line Balancing is the process of assigning
tasks to workstations in such a way that the
workstations have approximately equal time
requirements.
 Starts with the precedence
relationships
 Determine cycle time
 Calculate theoretical
minimum number of
workstations
 Balance the line by
assigning specific
tasks to workstations
© 2011 Pearson Education, Inc. publishing as Prentice Hall
 Compute efficiency
9 - 55
Line Balancing
 Goal is to minimize idle time along the line,
which leads to high utilization of labor and
equipment
 Perfect balance is often impossible to
achieve
9 - 56
Cycle Time
Cycle time is the maximum time allowed
at each workstation to complete its set
of tasks on a unit.
9 - 57
Example 1: Cycle Times
0.1 min.
0.7 min.
1.0 min.
With 5 workstations, CT =
0.5 min.
0.2 min.
1.0 minute.
Cycle time of a system = longest processing time in a workstation.
9 - 58
Example 1: Cycle Times
0.1 min.
0.7 min.
1.0 min.
0.5 min.
0.2 min.
With 1 workstation, CT = 2.5 minutes.
Cycle time of workstation = total processing time in of tasks.
With 3 workstations, can CT = 1.0 minute?
0.1 min.
0.7 min.
Workstation 1
1.0 min.
Workstation 2
0.5 min.
0.2 min.
Workstation 3
9 - 59
Output Capacity
OT
Output capacity =
CT
OT = operating time per day
CT = cycle time
Example: 8 hours per day
OT = 8 x 60 = 480 minutes per day
Cycle Time = CT = 1.0 min
Output = OT/CT = 480/1.0 = 480 units per
day (Maximum Capacity)
Cycle Time = CT = 2.5 min
Output = OT/CT = 480/2.5 = 192 units per
day
9 - 60
Cycle Time Determined by Desired Output
OT
CT = cycle time =
D
D = Desired output rate
Example: 8 hours per day
OT = 8 x 60 = 480 minutes per day
D = 480 units per day
CT = OT/D = 480/480 = 1.0 Minute
9 - 61
Theoretical Minimum Number of Stations Required
Nmin =
t
CT
 t = sum of task times
Nmin = theoretical Minimum Number of
Workstations Required
Example: 8 hours per day, desired
output rate is 480 units per day
CT = OT/D = 480/480 = 1.0 Minute
Nmin = ∑t /CT = 2.5/1.0 = 2.5
stations
≈ 3 stations
9 - 62
Wing Component Example
Performance
Time
Task
(minutes)
A
10
B
11
C
5
D
4
E
12
F
3
G
7
H
11
I
3
Total time 66
Immediate
Predecessors
© 2011 Pearson Education, Inc. publishing as Prentice Hall
—
A
B
B
A
C, D
F
E
G, H
This means that
tasks B and E
cannot be done
until task A has
been completed
9 - 63
Wing Component Example
Performance
Time
Task
(minutes)
Immediate
Predecessors
A
10
B
11
C
5
D
4
E
12
F
3
G
7
H
11
I
3
Total time 66
—
A
B
B
A
C, D
F
E
G, H
5
10
11
A
B
3
7
F
G
4
12
E
© 2011 Pearson Education, Inc. publishing as Prentice Hall
C
D
3
11
I
H
Figure 9.13
9 - 64
Wing Component Example
Performance
Time
Task
(minutes)
A
10
B
11
C
5
D
4
E
12
F
3
G
7
H
11
I
3
Total time 66
480 available
mins per day
40 units required
Task Must Follow
Task Listed
Below
—
A
Production time
B
available per day
Cycle
B time = Units required per day
A
= 480 / 40
5
C, D
= 12 minutes per unit
C
F
10
11
3
7
n
E
for taskFi
A ∑ Time
B
G
Minimum
G, H
i=1
4
number of =
workstations
Cycle Dtime
12
11
3
I
= 66 / 12
E
H
= 5.5 or 6 stations
© 2011 Pearson Education, Inc. publishing as Prentice Hall
Figure 9.13
9 - 65
WingLine-Balancing
Component
Example
Heuristics
1. Longest task time
Choose the available
480 task
available
Performance Task Must
Follow
with the longest task time
mins per day
Time
Task Listed
Task2. Most
(minutes)
40 task
units required
following tasksBelow
Choose the available
number
of= 12 mins
A
10
—with the largestCycle
time
B
11
Afollowing tasksMinimum
= 5.5 or 6
C 3. Ranked5 positional
BChoose the available
workstations
task for
D
Bwhich the sum of following
weight4
E
12
Atask times is the longest
5
F
3
C, D
the available
C task
G 4. Shortest
7 task time
FChoose
10 shortest
11
3
7
with the
task time
H
11
E
A
B
G
F
I 5. Least number
3
G,
H
of
Choose the available
task
4
3
with the least number
of
Totalfollowing
time 66 tasks
D
I
12
11
following tasks
E
© 2011 Pearson Education, Inc. publishing as Prentice Hall
H
Table 9.4
Figure 9.13
9 - 66
Wing Component Example
Performance
Time
Task
(minutes)
480 available
mins per day
40 units required
Task Must Follow
Task Listed
Below
A
10
B
11
Station
C
52
D
4
11
E 10
12
F A
B
3
G
7
H
11
I
3
12
Stationtime 66
Total
E
1
—
Cycle time = 12 mins
A
Minimum
5 B
workstations = 5.5 or 6
C B
3
7
A
C, D
F
G
4
3
F
D E Station 3
I
Station 3
G, H
11
Station
4
© 2011 Pearson Education, Inc. publishing as Prentice Hall
H
Station
5
Station
6 6
Station
Figure 9.14
9 - 67
Wing Component Example
Performance
Time
Task
(minutes)
Task Must Follow
Task Listed
Below
480 available
mins per day
40 units required
A
10
—
Cycle time = 12 mins
B
11
A
Minimum
C
5
B
workstations = 5.5 or 6
D
4
B
E
12
A
F
3
C, D
∑ Task times
G
7
F
Efficiency =
(Actual number ofEworkstations) x (Largest cycle time)
H
11
I
3
G, H
= 66 minutes / (6 stations) x (12 minutes)
Total time 66
= 91.7%
© 2011 Pearson Education, Inc. publishing as Prentice Hall
9 - 68