7-1 Copyright 2009, John Wiley & Sons, Inc. Chapter 7: Capacity and Facilities   Capacity Planning   Basic Layouts   Designing Process Layouts   Designing Service Layouts   Designing Product Layouts   Hybrid Layouts

7-2 Copyright 2009, John Wiley & Sons, Inc. Capacity  Maximum capability to produce  Capacity planning establishes overall level of productive resources for a firm establishes overall level of productive resources for a firm  3 basic strategies for timing of capacity expansion in relation to steady growth in demand (lead, lag, and average)

7-3 Copyright 2009, John Wiley & Sons, Inc. Capacity Expansion Strategies

7-4 Copyright 2009, John Wiley & Sons, Inc. Capacity (cont.)   Capacity increase depends on volume and certainty of anticipated demand strategic objectives costs of expansion and operation   Best operating level % of capacity utilization that minimizes unit costs   Capacity cushion % of capacity held in reserve for unexpected occurrences

7-5 Copyright 2009, John Wiley & Sons, Inc. Economies of Scale   it costs less per unit to produce high levels of output fixed costs can be spread over a larger number of units production or operating costs do not increase linearly with output levels quantity discounts are available for material purchases operating efficiency increases as workers gain experience

7-6 Copyright 2009, John Wiley & Sons, Inc. Best Operating Level for a Hotel

7-7 Copyright 2009, John Wiley & Sons, Inc. Facility Layout   Minimize material-handling costs   Utilize space efficiently   Utilize labor efficiently   Increase capacity   Facilitate communication and interaction   Incorporate safety and security measures   Provide flexibility to adapt to changing conditions   Increase quality Arrangement of areas within a facility to:

7-8 Copyright 2009, John Wiley & Sons, Inc. BASIC LAYOUTS   Process layouts group similar activities together according to process or function they perform   Product layouts arrange activities in line according to sequence of operations for a particular product or service   Fixed-position layouts are used for projects in which product cannot be moved

7-9 Copyright 2009, John Wiley & Sons, Inc. Process Layout in Services Women’s lingerie Women’s dresses Women’s sportswear Shoes Cosmetics and jewelry Entry and display area Housewares Children’s department Men’s department

7-10 Copyright 2009, John Wiley & Sons, Inc. Manufacturing Process Layout L L L L L L L L L L M M M M D D D D D D D D G G G G G G A AA Receiving and Shipping Assembly Painting Department Lathe Department Milling Department Drilling Department Grinding Department P P

7-11 Copyright 2009, John Wiley & Sons, Inc. A Product Layout In Out

7-12 Copyright 2009, John Wiley & Sons, Inc.   Description   Type of process   Product   Demand   Volume   Equipment   Description   Type of process   Product   Demand   Volume   Equipment  Sequential arrangement of activities  Continuous, mass production, mainly assembly  Standardized, made to stock  Stable  High  Special purpose Process Comparison of Product and Process Layouts  Functional grouping of activities  Intermittent, job shop, batch production, mainly fabrication  Varied, made to order  Fluctuating  Low  General purpose Product

7-13 Copyright 2009, John Wiley & Sons, Inc.   Workers   Inventory   Storage space   Material handling   Aisles   Scheduling   Layout decision   Goal   Advantage   Workers   Inventory   Storage space   Material handling   Aisles   Scheduling   Layout decision   Goal   Advantage  Limited skills  Low in-process, high finished goods  Small  Fixed path (conveyor)  Narrow  Part of balancing  Line balancing  Equalize work at each station  Efficiency Process Comparison of Product and Process Layouts  Varied skills  High in-process, low finished goods  Large  Variable path (forklift)  Wide  Dynamic  Machine location  Minimize material handling cost  Flexibility Product

7-14 Copyright 2009, John Wiley & Sons, Inc. Fixed-Position Layouts  Typical of projects  Equipment, workers, materials, other resources brought to the site  Highly skilled labor  Often low fixed cost  Typically high variable costs

7-15 Copyright 2009, John Wiley & Sons, Inc. Designing Process Layouts  Goal: minimize material handling costs  Block Diagramming  minimize nonadjacent loads  use when quantitative data is available  Relationship Diagramming  based on location preference between areas  use when quantitative data is not available

7-16 Copyright 2009, John Wiley & Sons, Inc. Computerized layout Solutions   CRAFT Computerized Relative Allocation of Facilities Technique   CORELAP Computerized Relationship Layout Planning   PROMODEL and EXTEND visual feedback allow user to quickly test a variety of scenarios   Three-D modeling and CAD integrated layout analysis available in VisFactory and similar software

7-17 Copyright 2009, John Wiley & Sons, Inc. Designing Service Layouts   Must be both attractive and functional   Types Free flow layouts encourage browsing, increase impulse purchasing, are flexible and visually appealing Grid layouts encourage customer familiarity, are low cost, easy to clean and secure, and good for repeat customers Loop and Spine layouts both increase customer sightlines and exposure to products, while encouraging customer to circulate through the entire store

7-18 Copyright 2009, John Wiley & Sons, Inc. Types of Store Layouts

7-19 Copyright 2009, John Wiley & Sons, Inc. Designing Product Layouts   Objective Balance the assembly line   Line balancing tries to equalize the amount of work at each workstation   Precedence requirements physical restrictions on the order in which operations are performed   Cycle time maximum amount of time a product is allowed to spend at each workstation

7-20 Copyright 2009, John Wiley & Sons, Inc. Desired Cycle Time, Desired Cycle Time, C d C d = production time available desired units of output C d = (8 hours x 60 minutes / hour) (120 units) C d = = 4 minutes

7-21 Copyright 2009, John Wiley & Sons, Inc. Flow Time vs Cycle Time  Cycle time = max time spent at any station  Flow time = time to complete all stations minutes Flow time = = 12 minutes Cycle time = max (4, 4, 4) = 4 minutes

7-22 Copyright 2009, John Wiley & Sons, Inc. Efficiency of Line  i i = 1 titititi nC a E =E =E =E =  i i = 1 titititi CdCdCdCd N =N =N =N = Efficiency Minimum number of workstations where t i = completion time for element i j = number of work elements n = actual number of workstations C a = actual cycle time C d = desired cycle time

7-23 Copyright 2009, John Wiley & Sons, Inc. Line Balancing Rules  Use heuristics to assign tasks to workstations  Longest processing time (LPT) rule (Pick the feasible task with the LPT)  Most number of following tasks rule (Pick the feasible task with the largest number of following tasks)  Ranked positional weight rule

7-24 Copyright 2009, John Wiley & Sons, Inc. Designing Product Layouts – con’t Step 1: Identify tasks & immediate predecessors Step 2: Determine output rate Step 3: Determine cycle time Step 4: Compute the Theoretical Minimum number of Stations Step 5: Assign tasks to workstations (balance the line) line) Step 6: Compute efficiency, idle time & balance delay

7-25 Copyright 2009, John Wiley & Sons, Inc. Step 1: Identify Tasks & Immediate Predecessors

7-26 Copyright 2009, John Wiley & Sons, Inc. Layout Calculations  Step 2: Determine output rate Vicki needs to produce 60 pizzas per hour Vicki needs to produce 60 pizzas per hour  Step 3: Determine cycle time The amount of time each workstation is allowed to complete its tasks The amount of time each workstation is allowed to complete its tasks Limited by the bottleneck task (the longest task in a process): Limited by the bottleneck task (the longest task in a process):

7-27 Copyright 2009, John Wiley & Sons, Inc. Layout Calculations (continued)  Step 4 : Compute the theoretical minimum number of stations TM = number of stations needed to achieve 100% efficiency (every second is used) TM = number of stations needed to achieve 100% efficiency (every second is used) Always round up (no partial workstations) Always round up (no partial workstations) Serves as a lower bound for our analysis Serves as a lower bound for our analysis

7-28 Copyright 2009, John Wiley & Sons, Inc. Layout Calculations (continued)  Step 5 : Assign tasks to workstations Start at the first station & choose the longest eligible task following precedence relationships Start at the first station & choose the longest eligible task following precedence relationships Continue adding the longest eligible task that fits without going over the desired cycle time Continue adding the longest eligible task that fits without going over the desired cycle time When no additional tasks can be added within the desired cycle time, begin assigning tasks to the next workstation until finished When no additional tasks can be added within the desired cycle time, begin assigning tasks to the next workstation until finished

7-29 Copyright 2009, John Wiley & Sons, Inc. Layout Calculations (Continued)  Step 6 : Compute efficiency and balance delay Efficiency (%) is the ratio of total productive time divided by total time Efficiency (%) is the ratio of total productive time divided by total time Balance delay (%) is the amount by which the line falls short of 100% Balance delay (%) is the amount by which the line falls short of 100%

7-30 Copyright 2009, John Wiley & Sons, Inc. Hybrids Layouts   Cellular layouts group dissimilar machines into work centers (called cells) that process families of parts with similar shapes or processing requirements   Flexible manufacturing system automated machining and material handling systems automated machining and material handling systems which can produce an enormous variety of items   Mixed-model assembly line processes more than one product model in one line

7-31 Copyright 2009, John Wiley & Sons, Inc. Cellular Layouts 1.Identify families of parts with similar flow paths 2.Group machines into cells based on part families 3.Arrange cells so material movement is minimized 4.Locate large shared machines at point of use

7-32 Copyright 2009, John Wiley & Sons, Inc. Parts Families A family of similar parts A family of related grocery items

7-33 Copyright 2009, John Wiley & Sons, Inc. Original Process Layout CABRaw materials Assembly

7-34 Copyright 2009, John Wiley & Sons, Inc. Part Routing Matrix Machines Parts Axxxxx Bxxxx Cxxx Dxxxxx Exxx Fxxx Gxxxx Hxxx Figure 5.8

7-35 Copyright 2009, John Wiley & Sons, Inc. Revised Cellular Layout Assembly A C B Raw materials Cell 1 Cell 2 Cell 3

7-36 Copyright 2009, John Wiley & Sons, Inc. Reordered Routing Matrix Machines Parts Axxxxx Dxxxxx Fxxx Cxxx Gxxxx Bxxxx Hxxx Exxx

7-37 Copyright 2009, John Wiley & Sons, Inc. Key: S= Saw L= Lathe HM= Horizontal milling machine VM= Vertical milling machine G= Grinder Paths of three workers moving within cell Material movement In Out Worker 1 Worker 2 Worker 3 Direction of part movement within cell S L HM VM G L Final inspection Finished part A Manufacturing Cell with Worker Paths Source: J.T. Black, “Cellular Manufacturing Systems Reduce Setup Time, Make Small Lot Production Economical.” Industrial Engineering (November 1983).

7-38 Copyright 2009, John Wiley & Sons, Inc. Automated Manufacturing Cell Source: J. T. Black, “Cellular Manufacturing Systems Reduce Setup Time, Make Small Lot Production Economical.” Industrial Engineering (November 1983)

7-39 Copyright 2009, John Wiley & Sons, Inc. Advantages and Disadvantages of Cellular Layouts  Advantages Reduced material handling and transit time Reduced material handling and transit time Reduced setup time Reduced setup time Reduced work-in- process inventory Reduced work-in- process inventory Better use of human resources Better use of human resources Easier to control Easier to control Easier to automate Easier to automate  Disadvantages Inadequate part families Inadequate part families Poorly balanced cells Poorly balanced cells Expanded training and scheduling of workers Expanded training and scheduling of workers Increased capital investment Increased capital investment

7-40 Copyright 2009, John Wiley & Sons, Inc. Flexible Manufacturing Systems (FMS)   FMS consists of numerous programmable machine tools connected by an automated material handling system and controlled by a common computer network   FMS combines flexibility with efficiency   FMS layouts differ based on variety of parts that the system can process size of parts processed average processing time required for part completion

7-41 Copyright 2009, John Wiley & Sons, Inc. Full-Blown FMS

7-42 Copyright 2009, John Wiley & Sons, Inc. Mixed Model Assembly Lines  Produce multiple models in any order on one assembly line  Issues in mixed model lines  Line balancing  U-shaped line  Flexible workforce  Model sequencing

7-43 Copyright 2009, John Wiley & Sons, Inc. Balancing U-Shaped Lines A BC DE Precedence diagram: Cycle time = 12 min A,BC,DE (a) Balanced for a straight line 9 min12 min3 min Efficiency = = =.6666 = 66.7 % (12) 12 min12 min C,D A,B E (b) Balanced for a U-shaped line Efficiency = = = 100 % (12)