© 2006 Prentice Hall, Inc.9 – 1 Operations Management Chapter 9 – Layout Strategy © 2006 Prentice Hall, Inc. PowerPoint presentation to accompany Heizer/Render Operations Management, 8e

© 2006 Prentice Hall, Inc.9 – 2 Innovations at McDonald’s  Indoor seating (1950s)  Drive-through window (1970s)  Adding breakfast to the menu (1980s)  Adding play areas (1990s)  Redesign of sandwich preparation process Three out of the four are layout decisions! Layout decisions impact operations because they often impact movement of goods, people and capacity acquisition decisions, such as inventory and machines.

© 2006 Prentice Hall, Inc.9 – 3 McDonald’s New Kitchen Layout

© 2006 Prentice Hall, Inc.9 – 4 Dimensions of Layout 1.Space size (sq. ft) impacts storage 2.Space layout impacts flow of resources, flexibility for re-arrangements 3.Space design impacts accessibility, safety, customer interaction and lighting

© 2006 Prentice Hall, Inc.9 – 5 Types of Office Layouts Closed layout Semi-open layout Office layout Appropriateness - isolated work - less work collaboration -less information sharing -High need for privacy Appropriateness - some field work -direct customer interaction - some work collaboration -some information sharing -low need for privacy Appropriateness - heavy field work - heavy worker-to worker interaction -heavy information sharing -no need for privacy

© 2006 Prentice Hall, Inc.9 – 6 Relationship Chart ValueCloseness A Absolutely necessary E Especially important IImportant OOrdinary OK UUnimportant XNot desirable President Chief Technology Officer Engineer’s area Secretary Office entrance Central files Equipment cabinet Photocopy equipment Storage room O U A X O U A I O A I O U A I I A U O A U O U X O I U O I I I E E E E E Figure 9.1

© 2006 Prentice Hall, Inc.9 – 7 Relationship Chart After a layout is chosen, the next challenge is the assignment of workers/activities to rooms. Assign activities to the following rooms. Use relationship chart provided in textbook. Semi-open layout 6 Rest Rest Door

© 2006 Prentice Hall, Inc.9 – 8 Types of Retail Layouts Shelf-centered layout Product-centered layout Open layout Appropriateness - high customer traffic - use of carts -High volume of SKUs -Low variety of SKUs Appropriateness - medium customer traffic - use of baskets -medium volume of SKUs -medium variety of SKUs Appropriateness - low - medium traffic -very heavy items -low volume of SKUs -high variety of SKUs

© 2006 Prentice Hall, Inc.9 – 9 Types of Retail Layouts Manual picking layout Mechanized picking layout Automated layout Appropriateness - low number of SKUs - low-medium storage area -medium volume of SKUs -Low-med variety of SKUs -Small units SKUs Appropriateness - med number of SKUs - med-large storage area -Med-high volume of SKUs -Low-med variety of SKUs -Large SKU packages Appropriateness - med-large no. of SKUs - med-large storage area -Med-high volume of SKUs -Low-high variety of SKUs -Small-med SKU packages

© 2006 Prentice Hall, Inc.9 – 10 Warehousing and Storage Layouts  Warehouse density tends to vary inversely with the number of different items stored  Automated Storage and Retrieval Systems (ASRS) can significantly improve warehouse productivity  Dock location is a key design element

© 2006 Prentice Hall, Inc.9 – 11 Warehouse Layout Cross-Docking Layout Shipping and receiving docks Office Shipping and receiving docks

© 2006 Prentice Hall, Inc.9 – 12 Surgery Radiology ER triage room ER BedsPharmacy Emergency room admissions Billing/exit Laboratories Process-Oriented Layout Patient A - broken leg Patient B -erratic heart pacemaker Figure 9.3

© 2006 Prentice Hall, Inc.9 – 13 Process-Oriented Layout Minimize cost = ∑ ∑ X ij C ij n i = 1 n j = 1 wheren=total number of work centers or departments i, j=individual departments X ij =number of loads moved from department i to department j C ij =cost to move a load between department i and department j

© 2006 Prentice Hall, Inc.9 – 14 DepartmentAssemblyPaintingMachineReceivingShippingTesting (1)(2)Shop (3)(4)(5)(6) Assembly (1) Painting (2) Machine Shop (3) Receiving (4) Shipping (5) Testing (6) Number of loads per week Process Layout Example: Loadings Figure 9.4

© 2006 Prentice Hall, Inc.9 – 15 Room 1Room 2Room 3 Room 4Room 5Room 6 60’ 40’ Process Layout Example: Distances ReceivingShippingTesting DepartmentDepartmentDepartment (4)(5)(6) Figure 9.5 AssemblyPaintingMachine Shop DepartmentDepartmentDepartment (1)(2)(3)

© 2006 Prentice Hall, Inc.9 – 16 Process Layout Example Cost =$50+$200+$40 (1 and 2)(1 and 3)(1 and 6) +$30+$50+$10 (2 and 3)(2 and 4)(2 and 5) +$40+$100+$50 (3 and 4)(3 and 6)(4 and 5) = $570 Cost = ∑ ∑ X ij C ij n i = 1 n j = 1

© 2006 Prentice Hall, Inc.9 – Process Layout Example Interdepartmental Flow Graph Figure 9.6

© 2006 Prentice Hall, Inc.9 – 18 Process Layout Example Cost =$50+$100+$20 (1 and 2)(1 and 3)(1 and 6) +$60+$50+$10 (2 and 3)(2 and 4)(2 and 5) +$40+$100+$50 (3 and 4)(3 and 6)(4 and 5) = $480 Cost = ∑ ∑ X ij C ij n i = 1 n j = 1

© 2006 Prentice Hall, Inc.9 – 19 Process Layout Example Interdepartmental Flow Graph (Loads only) Figure 9.7

© 2006 Prentice Hall, Inc.9 – 20 Process Layout Example (2) 30 x $2 50 x $1 10 x $1 50 x $1 20 x $1 20 x $2 50 x $1 100 x $1 Interdepartmental Flow Graph (Loads and distance only) Figure 9.7

© 2006 Prentice Hall, Inc.9 – 21 Room 1Room 2Room 3 Room 4Room 5Room 6 60’ 40’ Process Layout Example ReceivingShippingTesting DepartmentDepartmentDepartment (4)(5)(6) Figure 9.8 Painting Assembly Machine Shop DepartmentDepartmentDepartment (2)(1)(3)

© 2006 Prentice Hall, Inc.9 – 22 Advantages of Work Cells 1.Reduced work-in-process inventory 2.Less floor space required 3.Reduced raw material and finished goods inventory 4.Reduced direct labor 5.Heightened sense of employee participation 6.Increased use of equipment and machinery 7.Reduced investment in machinery and equipment

© 2006 Prentice Hall, Inc.9 – 23 Product-Oriented Layouts Straight line layout U shape layout U-shaped line may reduce employee movement and space requirements while enhancing communication, reducing the number of workers, and inspection Automated layout

© 2006 Prentice Hall, Inc.9 – 24 Product-Oriented Layouts (Automated type only) 1.Low variable cost per unit 2.Low material handling costs 3.Reduced work-in-process inventories 4.Easier training and supervision 5.Rapid throughput Advantages 1.High volume is required 2.Work stoppage at any point ties up the whole operation 3.Lack of flexibility in product or production rates Disadvantages

© 2006 Prentice Hall, Inc.9 – 25 Assembly-Line Balancing  Objective is to minimize the imbalance between machines or personnel while meeting required output  Starts with the precedence relationships 1.Determine cycle time 2.Calculate theoretical minimum number of workstations 3.Balance the line by assigning specific tasks to workstations

© 2006 Prentice Hall, Inc.9 – 26 Assembly-Line Balancing  If the conveyor must move at uniform speed, at which speed should it move?  4 minutes  3 minutes  3.5 minutes  6.5 minutes  7 minutes  10.5 minutes  14 minutes F C BA

© 2006 Prentice Hall, Inc.9 – 27 Copier Example PerformanceTask Must Follow TimeTask Listed Task(minutes)Below A10— B11A C5B D4B E12A F3C, D G7F H11E I3G, H Total time 66 I G F C D H B E A Figure 9.13

© 2006 Prentice Hall, Inc.9 – 28 Copier Example 480available mins per day 40units required Cycle time = Production time available per day Units required per day = 480 / 40 = 12 minutes per unit Minimum number of workstations = ∑ Time for task i Cycle time n i = 1 = 66 / 12 = 5.5 or 6 stations

© 2006 Prentice Hall, Inc.9 – 29 Copier Example I GF H C D B E A Station 1 Station 2 Station 3 Station 5 Station 4 Station 6 Figure 9.14  Every dis-aggregation process for automated processing could be done at different levels of detail.

© 2006 Prentice Hall, Inc.9 – 30 Copier Example 480available mins per day 40units required Cycle time = 12 mins Minimum workstations = 5.5 or 6 Efficiency = ∑ Task times (actual number of workstations) x (largest cycle time) = 66 minutes / (6 stations) x (12 minutes) = 91.7%