Facilities Planning - Unit 01 Facilities Planning Introduction

Definition of Facility Planning Facility Planning determines how an activity’s tangible fixed assets best support achieving the activity’s objectives. Examples: In manufacturing, the objective is to support production. In an airport, the objective is to support the passenger airplane interface. In a hospital, the objective is to provide medical care to patients. Facilities Planning Introduction - 2

Hierarchy of Facility Planning Structural Design Facility Location Facility Design Handling System Design Layout Design Source for Figure: Tompkins and White, Facilities Planning, 2nd edition, Wiley Location - is the placement of a facility with respect to customers, suppliers, and other facilities with which it interfaces. Structure - consists of the building and services (e.g., gas, water, power, heat, light, air, sewage). Layout - consists of all equipment, machinery, and furnishings within the structure. Handling System - consists of the mechanism by which all interactions required by the layout are satisfied (e.g., materials, personnel, information, and equipment handling systems). Facilities Planning Introduction - 3

Strategic Facilities Planning Issues 1. Number, location, and sizes of warehouses and/or distribution centers. 2. Centralized versus decentralized storage supplies, raw materials, work-in-process, and finished goods for single- and multi-building sites, as well as single- and multi-site companies. 3. Acquisition of existing facilities versus design of model factories and distribution centers of the future. 4. Flexibility required because of market and technological uncertainties. 5. Interface between storage and manufacturing. 6. Level of vertical integration, including "subcontract versus manufacture" decisions. 7. Control systems, including materials control and equipment control. 8. Movement of materials between buildings, between sites. 9. Changes in customers' and suppliers' technology as well as firm's own manufacturing technology and materials handling, storage, and control technology. 10. Design-to-cost goals for facilities. Facilities Planning Introduction - 4

Facility Design Sequential Approach vs. Integrated Approach Material Handling System Design Product Design Process Design Facility Layout Production Planning Sequential Approach Facilities Planning Introduction - 5

Facility Design Sequential Approach vs. Integrated Approach Impressive results in cost, quality, productivity, sales, customer satisfaction, delivery time, inventory levels, space + handling requirements, building size, etc. Concurrent Engineering Terms of product, process, scheduling and facility design planners work with marketing, purchasing, etc. Personnel address the design process in an integrated way. Product Design Process Design Schedule Design Layout Design + Material Handling System Design Facilities Planning Introduction - 6

Productivity = Output / Input Productivity Model Enterprise Input Output Productivity = Output / Input Facilities Planning Introduction - 7

Productivity = Output / Input Productivity Model Enterprise Input Output Productivity = Output / Input Facilities Planning Introduction - 8

Hierarchy of Facility Planning Layout Design Facility Location Structural Design Facility Planning Facility Design Layout Design Handling System Design Facilities Planning Introduction - 9

Layout Design - Introduction Facility layout means planning: for the location of all machines, utilities, employee workstations, customer service areas, material storage areas, aisles, restrooms, lunchrooms, internal walls, offices, and computer rooms for the flow patterns of materials and people around, into, and within buildings Facilities Planning Introduction - 10

Layout Design – Introduction Planning for required Spaces and Areas Equipment Work stations Material storage Rest/break areas Utilities Eating areas Aisles Offices Facilities Planning Introduction - 11

Layout Design – Introduction Characteristics of the Facility Layout Decision Location of these various areas impacts the flow through the system. The layout can affect productivity and costs generated by the system. Layout alternatives are limited by the amount and type of space required for the various areas the amount and type of space available the operations strategy Facilities Planning Introduction - 12

Layout Design – Introduction Characteristics of the Facility Layout Decision Layout decisions tend to be: Infrequent Expensive to implement Studied and evaluated extensively Long-term commitments Facilities Planning Introduction - 13

Facility Layout A Layout problem may be to: determine the location for a new machine, develop a new layout for an existing production plant, develop a layout for a new production plant, etc. A Layout problem may arises due to: changes in the design of a product, addition or deletion of a product, change in the demand of a product, changes in the design of the process, addition or deletion of a process, replacement of equipment, Facilities Planning Introduction - 14

Facility Layout – Strategic Importance 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 Poor Layout costs you time and money. Facilities Planning Introduction - 15

McDonald’s over 95 billion served Example of how a facility layout can save you money McDonald’s - New Kitchen Layout No food prepared ahead except patty Elimination of some steps, shortening of others New bun toasting machine (11 seconds vs. 30 seconds) Repositioning condiment containers (one motion, not two) Sandwiches assembled in order Production levels controlled by computer Discard only meat when sandwiches do not sell fast enough Savings of $100,000,000 per year in food costs McDonald’s over 95 billion served Facilities Planning Introduction - 16

Facility Innovations at McDonald’s over the years Example of how a facility layout can save you money McDonald’s - New Kitchen Layout Facility Innovations at McDonald’s over the years Indoor seating (1950’s) Drive-through window (1970s) Adding breakfast to the menu (1980s) Adding play areas (1990s) McDonald’s over 95 billion served Three out of the four are layout decisions, which one isn’t? Facilities Planning Introduction - 17

Layout Strategies - Manufacturing vs. Service Characteristic Manufacturing Service Output Tangible Intangible Customer contact Uniformity of input Labor content Uniformity of output Measure of Productivity Easy Difficult Correcting Quality High Low Facilities Planning Introduction - 18

Layout Strategies Fixed-position layout When building large bulky projects such as ships and buildings Process-oriented layout When you have low-volume, high-variety production (“job shop”, intermittent production) Product-oriented layout When you need the best personnel and machine use in repetitive or continuous production Facilities Planning Introduction - 19

Layout Strategies Office layout When you have office workers, their equipment, and spaces/offices to provide for movement of information Retail/service layout When you need lots of shelf space and to be able to respond to customer behavior Warehouse layout When you need to trade-off between space and material handling Facilities Planning Introduction - 20

Layout Strategies – Examples and Criteria Layout strategy Example Criteria Service/retail Drug store Grocery store Department store Expose customer to high margin items Storage Distributor Warehouse Minimize storage and handling costs Product oriented TV assembly line Minimize line imbalance, delay, and idle time Facilities Planning Introduction - 21

Areas of Concern in Layout Strategy Communication Service Areas Material Attributes Layout Strategy Warehousing Work Cell Safety Material Flow Facilities Planning Introduction - 22

Requirements of a Good Layout an understanding of capacity and space requirements selection of appropriate material handling equipment decisions regarding environment and aesthetics identification and understanding of the requirements for information flow identification of the cost of moving between the various work areas Facilities Planning Introduction - 23

Principles of a Good Layout Manufacturing Straight-line Flow Pattern when possible Backtracking kept to a Minimum Predictable Production Time Little In-process materials storage Open Floor plans so everyone can see what is going on Bottlenecks under control Workstations close together Minimum of material handling Easy adjustment to changing conditions Facilities Planning Introduction - 24

Layout in Services - Office Situation: The office layout process deals with situations where the primary consideration is the movement of information and communications carried out by: face-to-face conversations phone or computers movement of hard copy e-mail meetings intercom speakers Examples: Hotel Executive Offices Accounting Firm Offices An increasing number of the U.S. workforce work in an office environments Facilities Planning Introduction - 25

Layout in Services – Office Situation: Service buildings differ from manufacturing facilities in that instead of product flow, the flow involves people and information. Buildings must: be attractive have handicap access be secure be wired for communications (computer networks, etc) provide for efficient customer flow have adequate parking Facilities Planning Introduction - 26

Layout in Services – Office Facilities Planning Introduction - 27

Principles of a Good Layout Face to Face Services Easily understood service flow pattern Adequate waiting facilities Easy communication with customers Customers in view of servers throughout the process Clear entry and exit points with adequate checkout facilities Customers see only what you want them to see Balance between waiting and service areas Minimum walking and material movement Lack of clutter Facilities Planning Introduction - 28

Layout Levels Workstation Tool & Fixture Locations Workstation Design                      Workstation Tool & Fixture Locations Workstation Design V Sub Micro Layout                   Cells or Departments Workstations or Work cell Features Work cell of Department IV Micro Layout Building Work cells or Departments Building Department or Block Layout III Macro Layout                              Site Buildings or Site Features Site Planning II Supra                                   World or Country Sites Site Location & Selection I Global Output Environment Space Planning Unit Activity Level From: http://www.strategosinc.com/facility_plan_levels.htm Facilities Planning Introduction - 29

Layout Levels - Continued At the Global level, we select a site location. This involves factors such as freight cost, labor cost, skill availability and site focus. At the Supra-Layout level we plan the site. This includes number, size, and location of buildings. It includes infrastructure such as roads, water, gas and rail. This plan should look ahead to plant expansions and eventual site saturation The Macro-Layout plans each building, structure or other sub-unit of the site. Operating departments are defined and located at this level. Frequently, this is the most important level of planning. A Macro-Layout institutionalizes the fundamental organizational structure in steel and concrete. From: http://www.strategosinc.com/facility_plan_levels.htm Facilities Planning Introduction - 30

Layout Levels - Continued The Micro-Level IV determines the location of specific equipment and furniture. The emphasis shifts from gross material flow to personal space and communication. Socio-Technical considerations dominate. The sub micro level focuses on individual workers. Here we design workstations for efficiency, effectiveness and safety. Ergonomics is key. Ideally, the design progresses from Global to Sub-Micro in distinct, sequential phases. At the end of each phase, the design is "frozen" by consensus. From: http://www.strategosinc.com/facility_plan_levels.htm Facilities Planning Introduction - 31

New Trends in Manufacturing Layouts Designed for quality and flexibility Ability to quickly shift to different product models or to different production rates Cellular layout within larger process layouts Automated material handling U-shaped production lines More open work areas with fewer walls, partitions, or other obstacles Smaller and more compact factory layouts Less space provided for storage of inventories throughout the layout Facilities Planning Introduction - 32

Wrap-Up: World-Class Practices Strive for flexibility in layouts Multi-job training of workers Sophisticated preventive-maintenance programs Flexible machines Empowered workers trained in problem solving Layouts small and compact Services follow the above practices plus incorporate customer needs in design Facilities Planning Introduction - 33

Few More Words on Layout Strategy Objectives Develop an economical layout which will meet the requirements of: product design and volume (product strategy) process equipment and capacity (process strategy) quality of work life (human resource strategy) building and site constraints (location strategy) Facilities Planning Introduction - 34

Facilities Planning – What’s Coming up? Unit 01 - Facilities Planning Introduction Unit 02 - Transformation Systems and Process Selection Unit 03 - Layout Flow Analysis Unit 04 - Layout Types: Manufacturing Unit 05 - Layout Types: Service and Retail Unit 06 - Balancing Production Lines Unit 07 - Layout Design: Systematic Layout Planning Unit 08 - General Layout Planning and Evaluation Unit 09 - Material Handling Principles Unit 10 - Material Handling Equipment Unit 11 - Warehousing and Storage Unit 12 - Facilities Location Planning and Analysis Facilities Planning Introduction - 35