1. Chapter 9 : Layout Strategies

2. Outline
The Strategic Importance of Layout Decisions
Types of Layout
Office Layout
Retail Layout
Warehousing and Storage Layouts
Fixed-Position Layout

3. Process-Oriented Layout Work Cells
Outline – Continued
Process-Oriented Layout
Work Cells
Requirements of Work Cells
Staffing and Balancing Work Cells
The Focused Work Center and the Focused Factory
Repetitive and Product-Oriented Layout
Assembly-Line Balancing

4. Volume must justify cells
Work Cells
Reorganizes people and machines into groups to focus on single products or product groups
Group technology identifies products that have similar characteristics for particular cells
Volume must justify cells
Cells can be reconfigured as designs or volume changes

5. Advantages of Work Cells
Reduced work-in-process inventory
Less floor space required
Reduced raw material and finished goods inventory
Reduced direct labor
Heightened sense of employee participation
Increased use of equipment and machinery
Reduced investment in machinery and equipment

6. Requirements of Work Cells
Identification of families of products
A high level of training, flexibility and empowerment of employees
Being self-contained, with its own equipment and resources
Test (poka-yoke) at each station in the cell

7. Improving Layouts Using Work Cells
Current layout - workers in small closed areas.
Improved layout - cross-trained workers can assist each other. May be able to add a third worker as additional output is needed.
Figure 9.10 (a)

8. Improving Layouts Using Work Cells
Current layout - straight lines make it hard to balance tasks because work may not be divided evenly
Improved layout - in U shape, workers have better access. Four cross-trained workers were reduced.
U-shaped line may reduce employee movement and space requirements while enhancing communication, reducing the number of workers, and facilitating inspection
Figure 9.10 (b)

9. Staffing and Balancing Work Cells
Determine the takt time
Takt time =
Total work time available
Units required
Determine the number of operators required
Workers required =
Total operation time required
Takt time

10. 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
Standard time required
Operations
Assemble
Paint
Test
Label
Pack for
shipment 60 50 40 30 20 10

11. 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
Workers required =
Total operation time required
Takt time
= 140 / 48 = 2.91

12. Repetitive and Product-Oriented Layout
Organized around products or families of similar high-volume, low-variety products
Volume is adequate for high equipment utilization
Product demand is stable enough to justify high investment in specialized equipment
Product is standardized or approaching a phase of life cycle that justifies investment
Supplies of raw materials and components are adequate and of uniform quality

13. 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

14. Product-Oriented Layouts
Low variable cost per unit
Low material handling costs
Reduced work-in-process inventories
Easier training and supervision
Rapid throughput
Advantages
High volume is required
Work stoppage at any point ties up the whole operation
Lack of flexibility in product or production rates
Disadvantages

15. 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

16. Assembly-Line Balancing
Objective is to minimize the imbalance between machines or personnel while meeting required output
Starts with the precedence relationships
Determine cycle time
Calculate theoretical minimum number of workstations
Balance the line by assigning specific tasks to workstations

17. Wing Component Example
Performance Task Must Follow
Time Task Listed
Task (minutes) Below
A 10 —
B 11 A
C 5 B
D 4 B
E 12 A
F 3 C, D
G 7 F
H 11 E
I 3 G, H
Total time 66
This means that tasks B and E cannot be done until task A has been completed

18. Wing Component Example
Performance Task Must Follow
Time Task Listed
Task (minutes) Below
A 10 —
B 11 A
C 5 B
D 4 B
E 12 A
F 3 C, D
G 7 F
H 11 E
I 3 G, H
Total time 66 10 11 12 5 4 3 7 C D F A B E G I H
Figure 9.13

19. Wing Component Example
480 available mins per day
40 units required
Performance Task Must Follow
Time Task Listed
Task (minutes) Below
A 10 —
B 11 A
C 5 B
D 4 B
E 12 A
F 3 C, D
G 7 F
H 11 E
I 3 G, H
Total time 66
Cycle time =
Production time available per day
Units required per day
= 480 / 40
= 12 minutes per unit I G F C D H B E A 10 11 12 5 4 3 7
Figure 9.13
Minimum number of workstations =
∑ Time for task i
Cycle time n
i = 1
= 66 / 12
= 5.5 or 6 stations

20. Wing Component Example
480 available mins per day
40 units required
Cycle time = 12 mins
Minimum workstations
= 5.5 or 6
Performance Task Must Follow
Time Task Listed
Task (minutes) Below
A 10 —
B 11 A
C 5 B
D 4 B
E 12 A
F 3 C, D
G 7 F
H 11 E
I 3 G, H
Total time 66 I G F H C D B E A 10 11 12 5 4 3 7
Station 2
Station 3
Station 1
Station 6
Station 4
Station 5
Figure 9.14

21. Wing Component Example
480 available mins per day
40 units required
Cycle time = 12 mins
Minimum workstations
= 5.5 or 6
Performance Task Must Follow
Time Task Listed
Task (minutes) Below
A 10 —
B 11 A
C 5 B
D 4 B
E 12 A
F 3 C, D
G 7 F
H 11 E
I 3 G, H
Total time 66
Efficiency =
∑ Task times
(Actual number of workstations) x (Largest cycle time)
= 66 minutes / (6 stations) x (12 minutes)
= 91.7%

22. Summary
The Strategic Importance of Layout Decisions
Types of Layout
Office Layout
Retail Layout
Warehousing and Storage Layouts
Fixed-Position Layout

23. Process-Oriented Layout Work Cells
Summary – Continued
Process-Oriented Layout
Work Cells
Requirements of Work Cells
Staffing and Balancing Work Cells
The Focused Work Center and the Focused Factory
Repetitive and Product-Oriented Layout
Assembly-Line Balancing

24. Chapter 12: Inventory Management

25. Global Company Profile: Amazon.com The Importance of Inventory
Outline
Global Company Profile: Amazon.com
The Importance of Inventory
Functions of Inventory
Types of Inventory

26. Managing Inventory Inventory Models Outline – Continued ABC Analysis
Record Accuracy
Cycle Counting
Control of Service Inventories
Inventory Models
Independent vs. Dependent Demand
Holding, Ordering, and Setup Costs

27. Inventory Models for Independent Demand
Outline – Continued
Inventory Models for Independent Demand
The Basic Economic Order Quantity (EOQ) Model
Minimizing Costs
Reorder Points
Production Order Quantity Model
Quantity Discount Models

28. Probabilistic Models and Safety Stock
Outline – Continued
Probabilistic Models and Safety Stock
Other Probabilistic Models
Single-Period Model
Fixed-Period (P) Systems

29. Inventory Management
The objective of inventory management is to strike a balance between inventory investment and customer service

30. Importance of Inventory
One of the most expensive assets of many companies representing as much as 50% of total invested capital
Operations managers must balance inventory investment and customer service

31. Functions of Inventory
To decouple or separate various parts of the production process
To decouple the firm from fluctuations in demand and provide a stock of goods that will provide a selection for customers
To take advantage of quantity discounts
To hedge against inflation

32. Maintenance/repair/operating (MRO)
Types of Inventory
Raw material
Purchased but not processed
Work-in-process
Undergone some change but not completed
Maintenance/repair/operating (MRO)
Necessary to keep machinery and processes productive
Finished goods
Completed product awaiting shipment

33. The Material Flow Cycle
Cycle time
95% 5%
Input Wait for Wait to Move Wait in queue Setup Run Output
inspection be moved time for operator time time
Figure 12.1

34. How inventory items can be classified
Managing Inventory
How inventory items can be classified
How accurate inventory records can be maintained