1. Operations Management Layout Strategy

2. What is Facility Layout
Location or arrangement of everything within & around buildings
Determines long-run efficiency of operations
Helps achieve a strategy that supports differentiation, low cost or quick response
In addition to discussing what facility layout is, you might also raise some of the issues that may make it problematic.

3. Strategic Importance of Layout
Proper layout enables:
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 to change--use small, movable or modular equipment; etc
May be useful here to present a brief discussion of each benefit.

4. Layout Strategies Office layout Retail/service layout Warehouse layout
positions workers, their equipment, and spaces/offices to provide for movement of communication and information
Retail/service layout
allocates shelf space and responds to customer behavior
Warehouse layout
addresses trade-offs between space and material handling

5. Seven Layout Strategies
Fixed-position layout
large bulky projects such as ships and buildings
Process-oriented layout
deals with low-volume, high-variety production (“job shop”, intermittent production)
Product-oriented layout
seeks the best personnel and machine use in repetitive or continuous production, line balancing

6. Office Layout
Design positions people, equipment, & offices for maximum people and information flow, comfort and safety
Relationship chart used
Examples
Banks
Software company

7. Office Layout Floor Plan
Accounting
Manager
Brand X
Finance
Fin.
Acct.
This slide could be used to initiate a discussion of layout designed around product flow as opposed to layout designed around information flow.

8. Retail/Service Layout
Design maximizes product exposure to customers
Decision variables
Store flow pattern
Allocation of (shelf) space to products
Students should be asked for examples of features they find common to the design of retail layouts with which they are familiar.

9. Retail Layouts - Some Rules of Thumb
Locate high-draw items around the periphery of the store
Use prominent locations such as the first or last aisle for high-impulse and high margin items
Distribute “power items” (items that may dominate a shopping trip) to both sides of an aisle, and disperse them to increase the viewing of other items
Use end aisle locations because they have a very high exposure rate
Students can be asked to provide examples of instances in which these rules were implemented.

10. A Good Service Layout Considers
Ambient conditions - background characteristics such as lighting, sound, smell, and temperature.
Spatial layout and functionality - which involve customer circulation path planning
Signs, Symbols, and Artifacts - characteristics of building design that carry significance

11. Warehouse Layout
Design balances between space utilization & handling cost
Similar to process layout
Items moved between dock & various storage areas
Optimum layout depends on
Variety of items stored
Number of items picked

12. Fixed-Position Layout
Design is for stationary project
Workers and equipment come to site
Complicating factors
Limited space at site
House, shipyard etc….
Students should be able to supply examples of the use of this layout strategy.

13. Process-Oriented Layout
Design places departments with large flows of material or people together
Department areas having similar processes located in close proximity
e.g., All x-ray machines in same area
Supports process-focused strategy i.e. product differentiation stategy
Students should be asked to suggest why this is not our “standard” layout - at least where the product is movable or transportable.

14. Emergency Room Layout Surgery Radiology E.R. beds Pharmacy
Billing/exit
Triage room
E.R. Admissions
Patient B – heart problems
Patient A - broken leg
Labs
Students may be asked to evaluate alternative layouts for an emergency room. Perhaps a visit to view a local emergency room might be helpful.

15. Product-Oriented Layout
Facility organized around product
Design minimizes line imbalance
Delay between work stations
Types: Fabrication line; assembly line
Students should be asked to suggest the conditions under which a product-oriented layout is most appropriate.

16. Steps in Developing a Process-Oriented Layout
Construct a “from-to matrix”
Determine space requirements for each department
Develop an initial schematic diagram
Determine the cost of this layout
By trial-and-error (or more sophisticated means), try to improve the initial layout
Prepare a detailed plan that evaluates factors in addition to transportation cost
The criterion for this methodology is basically a number-of-parts (or people)-times-distance measure. Is this always useful or appropriate? 16

17. Cost of Process-Oriented Layout
Now that cost can be determined, ask students (1) whether this is an appropriate criteria, and (2) how they would go about minimizing cost. 17

18. Interdepartmental Flow of Parts1 2 3 4 5 6 50
100 20 30 10
Note that the matrix above basically measures the flow between sites, direction is immaterial. We can also develop entries for the remainder of the matrix if a different cost or route applies depending upon whether one is coming or going. 18

19. Interdepartmental Flow Graph Showing Number of Weekly Loads
100 1 3 2 50 30 20
100 50 20 10 4 5 6 50 19

20. Possible Layout 1 Assembly Department (1) Printing (2) Machine Shop
(3)
Receiving
(4)
Shipping
(5)
Testing
(6)
Room 1 Room 2 Room 2
Room 4 Room 5 Room 6
60’
40’ 20

21. Interdepartmental Flow Graph Showing Number of Weekly Loads30 2
221 3 1 50
100
100 20 50 20 10 4 5 6 50 21

22. Possible Layout 3 Painting Department (2) Assembly (1) Machine Shop
(3)
Receiving
(4)
Shipping
(5)
Testing
(6)
Room 1 Room 2 Room 2
Room 4 Room 5 Room 6
60’
40’ 22

23. Assembly Line Balancing
Analysis of production lines
Nearly equally divides work between workstations while meeting required output
Objectives
Maximize efficiency
Minimize number of work stations 23

24. Assembly Line Balancing The General Procedure
Determine cycle time by taking the demand (or production rate) per day and dividing it into the productive time available per day
Calculate the theoretical minimum number of work stations by dividing total task time by cycle time
Perform the line balance and assign specific assembly tasks to each work station
Students should be aware that it is best to run balanced assembly lines - if they are not, then the need for balancing should be covered before discussing the process. 24

25. Assembly Line Balancing Steps
1. Determine tasks (operations)
2. Determine sequence
3. Draw precedence diagram
4. Estimate task times
5. Calculate cycle time
6. Calculate number of work stations
7. Assign tasks
8. Calculate efficiency
Students should be walked through an example in class. One of the most useful examples is typically the student registration system. Students are familiar with it, they are able to estimate task time, and they are certainly impacted by the overall process, 25

26. Precedence Diagram ExampleB E H C D F G I
10 Min. 5 11 12 3 7 4 26

27. Assembly Line Balancing Equations
Cycle time =
Production time available
Demand per day
Minimum number of work stations
 Task times
Cycle time
Efficiency = =
* (Cycle time)
(Actual number of work stations) 27

28. Cycle time calc.
On the basis of precedence diagram and activity times given above, the firm determines that there are 480 productive minutes of work available per day. Furthermore, production schedule requires that 40 units be completed as output from the assembly line each day.
Cycle time:480/40=12 minutes per unit
Min no. of workstations:66/12=5.5 or 6

29. Six Station Solution A B C E D F G I H 10 11 5 3 7 12 29