Section Objectives

1

• Section Objectives
• After completing this section, you should be able
  to
• 1. List some of the different reasons for
  redesign of layouts.
• 2. Identify the inputs to facility layout
  decisions.
• 3. Distinguish between the four basic types of
  facility layouts.
• 4. List the primary advantages and limitations
  of both product and process
  
  
  
  layout.
• 5. Develop appropriate process layouts.
• 6. Solve line balancing problems.
• 7. Describe new layout approaches.

2

• Facility Layout
• The optimum placement or arrangement of
  space-consuming components within a productive
  system. The space-consuming components are
• machines
• materials
• manpower
• The benefits of a good layout include
• smooth material flow
• reduced inventories
• better scheduling
• effective space utilization
• fewer production bottlenecks
• reduced material handling costs

3

• Inputs to Facility Layout
• 1. Output (product / service) design - product or
  service design affects the layout of a facility.
  Design issues that have to be considered include
• Dimensions / weights of components
• Perishability / obsolescence
• Customer interaction requirements
• 2. Capacity Design - capacity design affects
  layout by determining the
• output rate and output flexibility, and
• the level of capital intensity
• 3. Process Design - the way a product or service
  is produced will influence layout. Design issues
  include the
• Sequence of processing operations for each output
• Processing equipment required for each operation
• Floor space requirements for equipment
• Inventory storage requirements for raw materials,
  work-in-progress, and finished goods

4

• 4. Facility Location - the current site what
  flexibility does it have in terms of
• Size and configuration
• Expansion options
• 5. Job Design - the tasks that constitute work,
  and the activities necessary to complete the
  tasks. These influence
• Work station operations and output
• Work station layout
• 6. Support Services - these are resources that
  support the primary production functions. They
  include
• Maintenance, supervision, employee facilities
• Loading docks, storage, aisles, elevators

5

• General Classification of Layouts
• Product (Flow Shop) Layout
• The physical components are arranged according to
  the progressive stages by which the product /
  service is provided. e.g. assembly lines,
  cafeterias. Layout built around a product that
  seeks the best personnel and machine utilization
  through repetitive or continuous production.
• Process (Job Shop) Layout
• The physical components are arranged, or grouped,
  according to the general function they perform,
  without regard to specific products / services
  provided. e.g. metal fabricators, hospitals,
  cafeterias. A layout that deals with low-volume,
  high-variety production.
• Fixed-Position Layout
• The product, because of its bulk or weight,
  remains in one location. All physical components
  are moved to the location where the product is
  being produced. e.g. shipyards, buildings.
  Layout that address the requirements of
  stationary projects or large, bulky projects.
• Group Technology Layout
• Dissimilar machines are grouped into work centres
  in order to work on products with similar shapes
  and processing requirements. e.g. aircraft
  manufacturing. It is basically a hybrid product
  / process layout.

6

• Job Shop vs. Group Technology Layout

Job Shop
L
L
L
M
M
M
L
L
L
M
M
M
Work Flow Output
Work Flow Inputs
Lathe Work Centre
Milling machines
D
D
D
G
G
G
D
D
D
G
G
G
Drill presses
Grinding work centre
Group Technology
G
L
L
M
D
Work Flow Output
D
M
Work Flow Inputs
L
L
D
D
L
D
L
7

• Characteristics of Product and Process Layouts

Characteristics Product Layout
Process Layout Work Flow
Fixed Variable Output Mix
Small, standard Variable Output
Volume High Moderate /
low Inventories Raw materials
High Low
Work-in-progress Low
High Finished goods
High Low Floor Space
Utilization High
Low Capital Costs High
Low Materials Handling
Mechanized Labour intensive Output Costs
Fixed costs High
Low Direct labour
Low High
Direct materials
Variable High
8
Innovations at McDonalds

• Indoor seating (1950s)
• Drive-through window (1970s)
• Adding breakfast to the menu (1980s)
• Adding play areas (1990s)

Three out of the four are layout decisions!
9
McDonalds New Kitchen Layout

• Fifth major innovation
• Sandwiches assembled in order
• Elimination of some steps, shortening of others
• No food prepared ahead except patty
• New bun toasting machine and new bun formulation
• Repositioning condiment containers
• Savings of 100,000,000 per year in food costs

10
McDonalds New Kitchen Layout
11

• Objectives for Facility Layouts
• Objectives for Manufacturing Operation Layouts
• Provide enough productive capacity
• Reduce materials-handling costs
• Conform to site and building constraints
• Allow space for production machines
• Allow high labour, machine and space utilization
  and productivity
• Provide for volume and product flexibility
• Provide space for restrooms, cafeterias and other
  personal-care needs
• Provide for employee safety and health
• Allow ease of supervision
• Allow ease of maintenance
• Control capital investment

12

• Additional Objectives for Warehouse Operation
  Layouts
• Promote efficient loading and unloading of
  shipping vehicles
• Provide for effective stock picking, order filing
  and unit loading
• Allow ease of inventory counts
• Promote accurate inventory recordkeeping
• Additional Objectives for Service Operation
  Layouts
• Provide for customer comfort and convenience
• Provide an appealing setting for customers
• Allow an attractive display of merchandise
• Reduce travel of personnel or customers
• Provide for privacy in work areas
• Promote communication between work areas
• Provide for stock rotation for shelf life
• Additional Objectives for Office Operation
  Layouts
• Reinforce organization structure
• Reduce travel of personnel or customers
• Provide for privacy in work areas

• Objectives for Facility Layouts - continued

13
Supermarket Retail Layout

• Objective is to maximize profitability per square
  foot of floor space
• Sales and profitability vary directly with
  customer exposure

• Five Helpful Ideas for Supermarket Layout
• Locate high-draw items around the periphery of
  the store
• Use prominent locations for high-impulse and
  high-margin items
• Distribute power items to both sides of an aisle
  and disperse them to increase viewing of other
  items
• Use end-aisle locations
• Convey mission of store through careful
  positioning of lead-off department

14
Supermarket Retail Layout
15

• Product Layout for a Bread Bakery

Raw Material
Milling
Note the logical sequence of operations
Mixing
Baking
Cutting
Packaging
Bread
16

• Process Layout for a Hospital

Admissions
Emergency
Maternity Ward
X-Ray
General Ward
Surgery
Labour Room
Laboratory
Delivery Room
Intensive Care
Kitchen
Children's Ward
17

• Process Layouts Its All About Flows
• Resource Flows of Importance
• 1. Manufacturing systems - material flows
• 2. Administrative offices - personnel flows
• 3. Hospital flows - patient, staff flows
• 4. Postal service - customer, mail flows
• 5. Restaurants - customer, staff flows
• Advantages of Process Layouts
• 1. Systems can handle a variety of processing
  requirements.
• 2. System not vulnerable to equipment failure.
• 3. General-purpose equipment is less costly than
  the specialized equipment used in product layouts
  and is easier to maintain.
• 4. Possible to use individual incentive systems.
• Disadvantages of Process Layouts
• 1. In-process inventory costs are high.
• 2. Routing and scheduling are difficult.

18

• 3. Equipment utilization rates are low.
• 4. Material handling is slow and inefficient and
  more costly per unit than under product layouts.
• 5. Job complexities often reduce the span of
  supervision and result in higher supervisory
  costs than product layouts do.
• 6. Special attention for each product or customer
  (routing, scheduling, machine setups, and so on)
  and low volumes result in higher unit costs than
  with product layouts.
• 7. Accounting, inventory control and purchasing
  are much more involved than under product
  layouts.
• Designing Process Layouts
• Main issue in the design of process layouts
  concerns the relative positioning of the
  departments involved. Process layouts features
• 1. Some departments benefit from adjacent
  locations.
• 2. Some departments must be kept separate.
• 3. External factors such as the location of
  entrances, loading docks, elevators, windows, and
  areas of reinforced flooring have to be
  considered.
• 4. Flow costs for material and personnel within
  the building are critical.

19

• Steps for Process Layout
• Step 1 Construct a from-to-matrix showing the
  flow of parts or materials from department to
  department.
• Step 2 Determine the space requirements for each
  department.
• Step 3 Develop an initial schematic diagram
  showing the sequence of departments through which
  parts will have to move. Try to place
  departments with a heavy flow of materials or
  parts next to one another.
• Step 4 Determine the cost of this layout by
  using the following equation
• Minimize cost
  ??XijCij
• where n number of work centres or
  departments
• i,j individual departments
• Xij number of moves between
  department i and department j
• Cij cost of a move between
  department i and department j
• Step 5 Try to improve this layout by trial and
  error or by use of a computer program.
• Step 6 Prepare a detailed plan considering space
  or size requirements of each department.

20
Process Layout Illustration - Minimizing Flow
Costs for a Toy Company
Step 1
1 2 3 4 5
6 7 8 175
25 0 30 200 20
25 0 100
75 90 80 90
17 88 125 99
180
20 5 0 25

0 180 187
374
103
7
1 2 3 4 5 6 7 8
1 2 3 4 5 6 7 8
Shipping receiving Plastic molding
stamping Metal forming Sewing department Small
toy assembly Large toy assembly Painting Mechanism
assembly
Flows Between Departments (number of moves)
Department
Activity
Step 2
40
40
40
40
1
3
5
7
40
40
40
40
80
40
40
40
40
2
4
6
8
40
40
40
40
160
21
Process Layout Illustration - Minimizing Flow
Costs for a Toy Company
Step 3
25
88
1
3
5
200
20
175
100
5
2
4
6
Step 4
Cost Matrix - First Solution Assume flow cost 1
for adjacent moves Assume flow cost 2 for moves
over 1 dept Assume flow cost 3 for moves over 2
depts (Assume diagonal moves are
possible) Sample Calculations 1 to 2 175 x
1 175 1 to 6 200 x 2 400 1 to 8 25
x 3 75, etc. Total cost 3,449
1 2 3 4 5
6 7 8 175
25 0 60 400 60
75 0 100
150 180 240 270
17 88 125 198
360
20 5 0 50
0
180 187
374 103

7
1 2 3 4 5 6 7 8
22
Process Layout Illustration - Minimizing Flow
Costs for a Toy Company
Step 5
Revised Layout Exchange 1 4 Why 1 4?
You want to bring 1 and 6 next to each other, and
this is one way to do it! Costs affected 15,
16, 17, 18, 45, 46, 47, 48
4
3
5
7
2
1
6
8
1 2 3 4 5
6 7 8 175
50 0 30 200 40
50 0 100 150
180 240 270
17 88 125 198
360
40 10 0 75
0
180 187
374 103

7
1 2 3 4 5 6 7 8
Cost Matrix - Second Solution Cost
reductions 15 30, 16 200 17 20, 18
25 Cost additions 45 20, 46 5 47 0,
48 25 Total cost 3,234
23
Process Layout Illustration - Minimizing Flow
Costs for a Toy Company
Step 6
Small Toy Assembly 5
Mechanism Assembly 8
Shipping and Receiving 1
Large Toy Assembly 6
A final, feasible solution after
several iterations
Metal Forming 3
Plastic Mldg. / Assb. 2
Sewing 4
Painting 7
24

• Process Layout Illustration - Systematic Layout
  Planning
• Even though the approach of minimizing flow costs
  is widely used, it suffers from the limitation of
  being able to focus on only one objective, and
  many situations involve multiple criteria.
• A more general approach, systematic layout
  planning (SLP), allows for subjective input from
  analysts or managers to indicate the relative
  importance of each combination of department
  pairs.
• The following is an example of SLP for the
  floor of a department store

• From
• Credit dept
• 2. Toy dept.
• 3. Wine dept.
• 4. Camera dept.
• 5. Candy dept.

To 2 3 4
5
Area (sq. ft.)
I U A U
6 --- 1,6 ---

100
U I
A --- 1
1,6
400
Letter Number
Closeness Rating Reason for Rating
A
E 2,3
1
300

X
1
100
100
25
Reason Type of customer Ease of
supervision Common personnel Contact
necessary Share same space Psychology
Code 1 2 3 4 5 6
Initial layout based upon relationship
requirements (ignoring space and building
constraints)
5
2
4
1
3
2
4
Final layout adjusted by square footage and
building size
20 ft.
3
1
5
50 ft.
26

• Product Layout
• These are layouts used to achieve a smooth and
  rapid flow of large volumes of products or
  customers through a system. The main
  characteristics of product layouts
• Standardized products requiring standardized
  processing
• Job divided into a series of tasks
• Specialization of labour and equipment
• Substantial investment in equipment and in job
  design
• Each item follows the same sequence of operations
  

27
Product Layout The Assembly Line
Begin
End
Work flow
Station 1
Station 2
Station 4
Station 3
Materials and/or labour
Materials and/or labour
Materials and/or labour
Materials and/or labour
OMFloor Animation
28

• Main Advantages of Product Layouts
• 1. High rate of output
• 2. Low unit costs as fixed costs of specialized
  equipment spread over many units.
• 3. Labour specialization reduces training costs
  and time.
• 4. High utilization of labour and equipment.
• 5. Routing and scheduling are included in the
  initial design of system and do not require much
  attention once the system is in operation.
• 6. Accounting, purchasing and inventory control
  are fairly routine.
• Primary Disadvantages of Product Layouts
• 1. Division of labour usually creates dull,
  repetitive jobs with little opportunity for
  advancement and may lead to morale problems.
• 2. System is inflexible in response to changes in
  volume of output or changes in product or process
  design.
• 3. System is susceptible to shutdowns caused by
  equipment breakdowns or employee absenteeism.
• 4. Preventative maintenance, the capacity for
  quick repairs and spare parts inventories are
  necessary expenses.

29

• Steps in Product Layout
• Step 1 Develop the precedence diagram showing
  the sequence and performance times for each task.
• Step 2 Calculate cycle time to meet the output
  requirement. Take the demand per day and divide
  it into the productive time available per day (in
  minutes or seconds).
• productive time
  
• Demand per day or production rate per day
• Step 3 Determine the theoretical minimum number
  of workstations. This is the sum of all task
  times divided by the cycle time. Fractions are
  rounded to the next higher whole number.
• 
  ? time for task i
  
• 
  Cycle time
• Step 4 Perform the line balance by assign
  specific assembly tasks to each workstation. An
  efficient balance is one that will complete the
  required assembly, follow the specified sequence,
  and keep the idle time at each workstation to a
  minimum.

Cycle time
Minimum number of workstations
30
Line-Balancing Heuristics (Rules of Thumb)
Meaning
Rule
1. Longest operating task time Choose the available task with the longest task time
2. Greatest number of following tasks Choose the available task with the largest number of following tasks
3. Ranked positional weight Choose the available task for which the sum of following task times is the longest
4. Shortest operating task time Choose the available task with the shortest task time
5. Least number of following tasks Choose the available task with the least number of following tasks
31
Assembly Line Balancing Illustration

• The problem Pproduce 500 Model J Wagons per
  8-hour day
• Setup time and work breaks total 45 minutes
• Production time available 480 45 435
  minutes
• Assembly steps and times for the Model J Wagon
  are given below

Tasks That Must Precede
Time
Task
Task Description
A B C D E F G H I J K
Position rear axle support and hand fasten 4
screws to nuts Insert rear axle Tighten rear axle
support screws to nuts Position front axle
assembly and hand fasten with 4 screws to
nuts Tighten front axle assembly screws Position
rear wheel 1 and fasten hub cap Position rear
wheel 2 and fasten hub cap Position front wheel
1 and fasten hub cap Position front wheel 2 and
fasten hub cap Position wagon handle shaft on
front axle assembly and fasten bolt and
nut Tighten bolt and nut
45 11 9 50 15 12 12 12 12 8 9 195
A A,B D A,B,C A,B,C D,E D,E A,B,C,D,E,F,G,H,I J

32
Assembly Line Balancing Illustration
Step 1 Draw the precedence diagram
12
F
9
11
B
C
45
12
A
G
8
9
J
K
50
15
12
D
E
H
12
I
33
Assembly Line Balancing Illustration

• Step 2 Calculate the cycle time
• Cycle Time time available / output required
• 435 minutes / 500 units 0.87
  minutes 52.2 seconds
• Step 3 Calculate the minimum number of
  workstations
• Minimum number of work stations total task
  time / cycle time
• 195 seconds / 52.2 seconds 3.74
  4 stations
• Step 4 Balance the line using the following
  heuristics (rules of thumb)
• According to Greatest-Number-of-Following-Tasks
  rule
• According to the Longest-Operating-Time rule

34
Assembly Line Balancing Illustration
Step 4 Balancing the line using the
Greatest-Number-of-Following-Tasks rule
Feasible Remaining Tasks
Tasks With Most Followers
Workstation
Task
Task Time
Idle Time
Station 1 Station 2 Station 3 Station 4
Station 5
A D B/E/C/F G/H/I/J K
45 50 11/15/9/12 12/12/12/8 9
7.2 2.2 41.2/26.2/17.2/5.2 40.2/28.2/16.2/8.2
43.2
None None C,E/C,H,I/F,G,H,I/None H,I/I/J/None
None
C,E/C/F,G,H,I H,I
35
Assembly Line Balancing Illustration
Step 4 Balancing the line using the
Longest-Operating-Time rule
Feasible Remaining Tasks
Tasks With Longest Operating Time
Workstation
Task
Task Time
Idle Time
Station 1 Station 2 Station 3 Station 4
D A E/H/I/B C/F/G/J/K
50 45 15/12/12/11 9/12/12/8/9
2.2 7.2 37.2/25.2/13.2/2.2 43.2/31.2/19.2/11.2/
3.2
None None H,I,B/I,B/B/None F,G/G/J/K
E/H/I/B C/F/G/J/K
Efficiency of the line total task time /
(number of stations cycle time)
Efficiency of line balance using the
greatest-number-of-following-tasks rule 195 /
(5 x 52.2) .747 74.7 Efficiency of the line
using the longest -operating-time rule 195 /
(4 x 52.2) .934 93.4
36

• Production Lines Western vs. Japanese

Western 1. Top priority line balance 2.
Strategy stability - long production runs.
Rebalancing seldom occurs 3. Assume fixed
labour assignments 4. Use inventory buffers to
cushion effect of equipment failure 5.
Plan to run at fixed rate. Send quality
problems off line 6. Linear or L-shaped lines
7. Material movement by conveyor is
desirable 8. Buy supermachines and keep them
busy on a continuous basis 9. Applied in
labour-intensive final assembly 10. Run
mixed models where labour content is
similar from model to model
Japanese 1. Top priority flexibility 2.
Strategy flexibility - expect to rebalance
often to match output to changing demand 3.
Flexible labour move to current workload 4.
Employ maximal preventive maintenance to
keep equipment from breaking down 5. Slow for
quality problems speed up when quality is
right 6. U-shaped or parallel lines 7. Put
stations close together and avoid conveyors
8. Install small machines add more as
needed 9. Applied even to capital-intensive
subassembly 10. Strive for mixed-model
production, even in subassembly and
fabrication
37

• Characteristics of Japanese Manufacturing Layouts
• Chief Objective Manufacturing flexibility to
  give the ability to modify
  production rates quickly and to change to
  different models.
• Means of Achieving Objective
• 1. Workers trained at many jobs.
• 2. Large investment in preventative maintenance.
• 3. Workers encouraged to solve production
  problems as they arise.
• 4. Workers and machines shifted as needed to
  solve production problems.
• 5. Production lines stopped or slowed when
  machine breakdowns or quality problems occur.
• 6. Little inventory carried.
• 7. Work stations placed close together.
• Appearance of Layouts
• 1. Small manufacturing floor plans.
• 2. Compact and tightly packed layouts.
• 3. Large percentage of floor space utilized for
  production.
• 4. U-shaped production lines.

38
Process Layout - Additional Illustration 1
A small printing shop wishes to locate its seven
departments in a one-floor building that is 40
units wide and 50 units long. Department sizes
are
Department Length (units) Width (units) Layout
10 10 Cutting
20 10 Shipping 10
10 Supply Storage 20
15 Printing 25
20 Binding 20 20 Art
20 20
The average number of loads flowing between
departments is expected to be
From Dept Layout Cutting
Shipping Supply Storage Painting
Binding Art Layout ---
--- ---
--- ---
--- --- Cutting
--- --- ---
100 ---
400 --- Shipping
--- --- ---
500 ---
--- --- Supply
Storage --- 600
100 ---
400 100 --- Printing
--- ---
--- ---
--- 1200 100 Binding
--- 100
1000 ---
200 --- --- Art
--- 100
--- ---
100 --- ---
What is your layout recommendation?
39
Process Layout - Additional Illustration 2
Eight work centres must be arranged in an
L-shaped building. The location of centres A and
E are designated as shown in the accompanying
diagram. Assuming transportation costs are 2
per load per metre, develop a suitable layout
that minimizes transportation costs using the
information below.
Distances (metres)
From / To A B C
D E F G
H A -- 40
40 60 120 80
100 110 B
-- 60 40 60
140 120 130 C
-- 45
85 40 70 90
D
-- 40 50
40 45 E

-- 90 50 40 F

--
40 60 G

-- 60 H


--
A
B
C
D
E
F
G
H
Loads per day
From / To A B C
D E F G
H A -- 10
5 90 365 135
125 0 B 0
-- 140 10 0
35 0 120 C
0 220 -- 110
10 0 0
200 D 0 110
240 -- 10 0
0 170 E 5
40 100 180 --
10 40 10 F
0 80 40 70
0 -- 10 20
G 0 45
20 50 0 40
-- 20 H 0
0 0 20 0
0 0 --
cannot be moved
40
Process Layout - Additional Illustration 3
Hercules Manufacturing, a producer of corrugated
cardboard boxes, is planning a 3600 square foot
layout. The operations manager has obtained SLP
ratings for locating departments next to each
other.
From / To Storage Corrugator
Folder/Gluer Taper/Bailer Inspection
Shipping Storage ---
AN U
U I U
Corrugator --- ---
I U
U X Folder/Gluer
--- ---
--- AN I
U Taper/Bailer ---
--- ---
--- U
I Inspection ---
--- ---
--- --- AN
Shipping --- ---
--- ---
--- ---
Area(sq.ft.) 1200 400 400 400 400 800
AN Absolutely Necessary I Important
U Unimportant X Undesirable
What should be the layout used by Hercules
Manufacturing?
41
Product Layout - Additional Illustration 1
Rival Manufacturing Company, a producer of can
openers, has to balance its assembly line. Given
below are the work elements, their times and
their precedence requirements
Work Element Time (sec.) Precedence A 30 --
B 60 A C 70 A D 50 A E 20 A
F 40 A,B,C G 50 A,C H
50 A,B,C,D,E,F,G
370
Demand per day is 400 can openers. Working time
per day is 8 hours.
a. Draw the precedence diagram. b. What is the
theoretical number of work stations? c. What is
the minimum number of work stations needed to
achieve a cycle time of 70 seconds, using the
greatest-number-of-following-tasks rule? d. What
is the minimum number of stations needed to meet
a cycle time of 100 seconds, according to the
longest-operating-time rule? e. What are the
balance delays in parts (c) and (d) ?
42
Product Layout - Additional Illustration 2
Able Manufacturing has an opportunity to bid on a
contract to produce an electronic assembly.
Able could use excess assembly capacity at its
main production facility. The contract would
require (over two years) of 30,000 units. Ables
engineers suggest an assembly line consisting of
nine tasks
Work Element Time (min) Must Follow A 4 G
B 6 G C 2 B,D D 5 A,F E 3 D
F 4 G G 3 I H 2 C,E
I 4 ---
Assembly would occur on one shift with average
productive time of 7.5 hours per employee daily.
There would be twenty-two productive days per
month on average. Direct labour costs are 11
per hour variable overhead is estimated at 10
percent of direct labour direct materials are
18 per unit initial tooling for the project is
150,000 and semifixed costs of manufacturing for
the assembly line are estimated at 8,000 per
month. Able would like a 15 percent margin on
selling price for such a contract. Should Able
submit a bid and, if so, at what price?