1. Operations Management Layout Strategy Chapter 9

2. Outline Importance of Layout. Six Layouts: Fixed-Position Layout.
Office Layout.
Process-Oriented Layout (Flow graphs).
Retail Layout.
Warehouse Layout.
Product-Oriented Layout (Assembly line balancing).

3. What is Facility Layout
Location or arrangement of everything within & around buildings.
Objectives are to maximize:
Utilization of space, equipment, & people.
Efficient flow of information, material, & people.
Employee morale & safety.
Trend is towards flexible and dynamic layouts.
In addition to discussing what facility layout is, you might also raise some of the issues that may make it problematic.

4. Facility Layout Helps achieve competitive advantage:
Better, faster, cheaper.
Determines productivity, cost, quality, flexibility, image, etc.
May involve a blend of strategies.
In addition to discussing what facility layout is, you might also raise some of the issues that may make it problematic.

5. Six Layout Strategies 1. Fixed-position layout. 2. Office layout.
For large unique projects such as ships and buildings.
2. Office layout.
Positions workers, equipment, and spaces/offices to provide for movement of information and material.
3. Process-oriented layout.
For low-volume, high-variety production.

6. Six Layout Strategies - continued
4. Retail/service layout.
Arranges facility and allocates shelf space in light of customer behavior.
5. Warehouse layout.
Addresses trade-offs between space utilization and material handling.
6. Product-oriented layout.
For repetitive or continuous production.

7. Requirements for a Good Layout
Understand capacity and space requirements.
Understand information flows.
Understand cost of people and product flows.
Select appropriate material handling equipment.
Consider environment and aesthetics.
Consider safety and regulations.
Students should be asked if they perceive the relative importance of these requirements to be changing with the increased use of automated information technology.

8. 1. Fixed-Position Layout
Project is stationary.
Special purpose: Construction, shipbuilding, etc.
Workers and equipment come to site.
Complicating factors.
Limited space at site.
Changing material needs.
Unique projects.
Students should be able to supply examples of the use of this layout strategy.

9. 2. Office Layout Positions people, equipment, & offices.
Usually for maximum information flow.
Also can consider material flow.
Arranged by process or product.
Example: Payroll dept. is by process.
Different cultures have different expectations for space.
Relationship (or proximity) chart used.

10. Relationship (Proximity) Chart
Uses 6 levels to express desired proximity.
A = Absolutely necessary
E = Especially important
I = Important
O= Ordinary importance
U = Unimportant
X = Not desirable

11. Relationship (Proximity) Chart
1 President O
2 Costing U E A
3 Engineering I
4 President’s Secretary
5 Photocopiers X

12. Relationship (Proximity) Chart
Can determine layout using proximity diagram
1 President O
2 Costing U E A
3 Engineering I
4 President’s Secretary
5 Photocopiers X 1 4 3 2 5 A E I X

13. Office Layout
Locate 5 offices in a linear space. All offices are to be the same size.
1 President O
2 Costing U E A
3 Engineering I
4 President’s Secretary
5 Photocopiers X 1 4 3 2 5 A E I X

14. Office Layout
Locate 5 offices in a linear space. All offices are to be the same size. 1 4 3 2 5 A E I X
1 President O
2 Costing U E A
3 Engineering I
4 President’s Secretary
5 Photocopiers X 1 4 5 3 2
Which is better? 1 4 2 3 5

15. Office Layout
Locate 5 offices in a rectangular space. Offices 2-5 are to be same size.
Office 1 (President’s) is twice as large. 1 4 3 2 5 A E I X
1 President O
2 Costing U E A
3 Engineering I
4 President’s Secretary
5 Photocopiers X

16. Office Layout Solution
1 President O
2 Costing U E A
3 Engineering I
4 President’s Secretary
5 Photocopiers X
Costing 3
Photocopiers 5
President’s
Secretary 4 2
President 1
Engineering
Corridor

17. 3. Process-Oriented Layout
Place departments with large flows of material or people close together.
Similar processes and equipment are located in close proximity.
For example, all x-ray machines in same area.
Used with process-focused processes.
Low volume, high variety.
Students should be asked to suggest why this is not our “standard” layout - at least where the product is movable or transportable.

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

19. Process-Oriented Layout Advantages
Flexibility.
Allows wide variety of products.
Low fixed costs for general purpose equipment.
Breakdown of one machine or worker does not stop processing.

20. Process-Oriented Layout Disadvantages
Scheduling is difficult.
High variable cost.
High work-in-process inventory and waiting.
High labor skills required.

21. Process-Oriented Layout Steps
Goal: Minimize cost of moving between departments.
Construct a matrix of interdepartmental flows.
Determine space requirements for each department.
Develop an initial layout by placing departments with large flows close together.
Determine the cost of this initial layout.
Improve the initial layout (by hand or more sophisticated means).
Consider 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?

22. Cost of Process-Oriented Layout

23. Flows of Parts (loads/week)1 2 3 4 5 6 40
100 10 80 50 20 to
from
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.

24. Interdepartmental Flow of Parts
Number of loads/week between departments 1 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.

25. Initial Layout
Room 1 Room 2 Room 3
Room 4 Room 5 Room 6

26. Cost of Initial Layout 1-2 50 = 50*1 1-3 200 = 100*2 1-6 40 = 20*2
Cost per load for adjacent locations = $1
Cost per load for non-adjacent locations = $2
= 50*1
= 100*2
= 20*2
= 30*1
= 50*1
= 10*1
= 20*2
= 100*1
= 50*1
Total = $570
100 50 30 10 20 1 2 3 4 5 6

27. Large Flows in Initial Layout
100 1 2 3 50 30 20
100 50 20 10 4 5 6 50
Note that Largest Flows are not close together:
100 for 1-3 & 3-6

28. Start Over with Largest Flows
Number of loads/week between departments 1 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.
Flow = 100 for 1-3 & 3-6, so put 3 close to 1 and 6.
Flow = 50 for 1-2, 2-4 & 4-5, so put these close.

29. Improved Layout Room 1 Room 2 Room 3 Department Department Department
(1)
(3)
(6)
Department
Department
Department
(2)
(4)
(5)
Room 4 Room 5 Room 6

30. Improved Layout 50
100 20 30 1 2 6 3 4 5 10

31. Cost of Alternative Improved Layout
Cost per load for adjacent locations = $1
Cost per load for non-adjacent locations = $2
= 50*1
= 100*1
= 20*2
= 30*1
= 50*1
= 10*2
= 20*1
= 100*1
= 50*1
Total = $460 50
100 20 30 1 2 6 3 4 5 10
Is this best?

32. Layout Example 2
Given the following tables of interdepartmental flows and distances between locations A-E, locate the five departments to minimize the total distance x flow.
A B C D E A B C D
Distances between locations E
Interdepartmental flows
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.

33. Layout Example 2
Largest flow 1-3 (flow=18) should be in closest locations: C & D
There are two options:
Solution 1 Solution 2
A = A =
B = B =
C = C = 3
D = D = 1
E = E =
A B C D E A B C D
Distances between locations E
Interdepartmental flows
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.

34. Layout Example 2 – Solution 1
Next largest flow is 2-3 (flow=15). Since 3 is already located, 2 should be placed in location closest to 3.
Solution 1
A =
B = 2
C = 1
D = 3
E =
Solution 1: 3 is in D, and closest open location to D is B, so put 2 in B.
A B C D E A B C D
Distances between locations E
Interdepartmental flows
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.

35. Layout Example 2 – Solution 2
Next largest flow is 2-3 (flow=15). Since 3 is already located, 2 should be placed in location closest to 3.
Solution 1 Solution 2
A = A = 2
B = B =
C = C = 3
D = D = 1
E = E =
Solution 2: 3 is in C, and closest open location to C is A, so put 2 in A.
A B C D E A B C D
Distances between locations E
Interdepartmental flows
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.

36. Layout Example 2 – Solution 1
Next largest flow is 1-2 (flow=13), but 1 and 2 are already located.
So consider next largest flow 2-5.
Solution 1 Solution 2
A = A = 2
B = B =
C = C = 3
D = D = 1
E = E =
Solution 1: 2 is in B, and closest open location to B is E, so put 5 in E.
A B C D E A B C D
Distances between locations E
Interdepartmental flows
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.

37. Layout Example 2 – Solution 2
Next largest flow is 1-2 (flow=13), but 1 and 2 are already located.
So consider next largest flow 2-5.
Solution 1 Solution 2
A = A = 2
B = B = 5
C = C = 3
D = D = 1
E = E =
Solution 2: 2 is in A, and closest open location to A is B, so put 5 in B.
A B C D E A B C D
Distances between locations E
Interdepartmental flows
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.

38. Layout Example 2 – Solution 2
Only one location and one department are left.
Solution 1 Solution 2
A = A = 2
B = B = 5
C = C = 3
D = D = 1
E = E = 4
Solution 1: Put 4 in A.
Solution 2: Put 4 in E.
A B C D E A B C D
Distances between locations E
Interdepartmental flows
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.

39. Layout Example 2 – Cost
Solution 1:Distance = 13x9 + 18x4 + 3x8 + 15x6 + 6x7 + 4x14 + 4x14 = 457
Solution 2: Distance = 13x x4 + 3x x8 + 6x9 + 4x9 + 4x7 = 508
Solution 1 Solution 2
A = A = 2
B = B = 5
C = C = 3
D = D = 1
E = E = 4
Solution 1 is best (lowest cost)!
A B C D E A B C D
Distances between locations E
Interdepartmental flows
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.

40. Layout Example 3
Given the following tables of interdepartmental flows and distances between locations A-E, locate the five departments to minimize the total distance x flow.
Also, now assume that 1 must be in A.
A B C D E A B C D
Distances between locations E
Interdepartmental flows
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.

41. Layout Example 3
1. Largest flow is 1-3 (flow=18) and 1 is already in A. So, place 3 in C.
2. Next largest flow is 2-3, so place 2 in D.
3. Next largest flow is 1-2, but both are already located.
4. Next largest flow is 2-5, so place 5 in B.
5. Last dept is 4, so place 4 in E.
Solution 1
A = 1
B = 5
C = 3
D = 2
E = 4
A B C D E A B C D
Distances between locations E
Interdepartmental flows
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.

42. Computer Programs for Layout
Many different programs:
CRAFT
SPACECRAFT
CRAFT 3-D
CORELAP
ALDEP
All are heuristic - not necessarily optimal!!
It is probably useful to note that these programs operate on the basis of heuristics - and do not necessarily produce the optimal answer.

43. Work Cells in Process Layouts
Special case of product-oriented layout - in a process-oriented facility.
Different machines brought together to make a product.
Use when high volume warrants special arrangement.
For 1 product or a small group of products.
Temporary arrangement.
Example: Assembly line set up to produce 3000 identical parts in a job shop.
Students should be asked to comment upon the technology required to implement the concept of work cells. Under what conditions is such a cellular arrangement possible?

44. Work Cell Floor Plan
Office
Tool Room
Work Cell
Saws
Drills

45. Work Cell Advantages Lower: Higher: Inventory. Equipment utilization.
Floor space.
Direct labor costs.
Higher:
Equipment utilization.
Employee participation.
Quality.

46. Work Cells, Focused Work Centers and the Focused Factory
A temporary assembly-line-oriented arrangement of machines and personnel in what is ordinarily a process-oriented facility.
Focused Work
A permanent assembly-line-oriented arrangement of machines and personnel in what is ordinarily a process-oriented facility.
Center
Focused Factory
A permanent facility to produce a product or component in a product-oriented facility.

47. 4. Retail/Service Layout
Maximize product exposure to customers.
Maximize profitability per square foot of floor space or per linear foot of shelf space.
Decision variables:
Arrangement of store.
Store flow pattern.
Allocation of (shelf) space to products.
Video
Students should be asked for examples of features they find common to the design of retail layouts with which they are familiar.

48. Retail Layouts - Rules of Thumb
Distribute “power items” (that dominate a shopping trip) around store to increase the viewing of other items.
Locate far apart.
Locate on both sides of an aisle.
Use prominent locations (end aisle locations; first or last aisle) for high-impulse and high margin items.
Remove crossover aisles to prevent customers from moving between aisles.
Slotting fees are paid by vendors for product placement.
Students can be asked to provide examples of instances in which these rules were implemented.

49. Grocery Store Layout
Students should be asked to identify differences between this and the previous slide.

50. Retail Store Shelf Space
5 facings
PERT
Consider prominence of shelf location and number of facings.
Can use computerized tools to manage shelf-space.
Track sales and product location (scanner data).

51. Servicescape Considerations
Ambient conditions.
Background characteristics such as lighting, sound, smell, and temperature.
Spatial layout and functionality.
Customer circulation, aisle width, shelf spacing, etc.
Signs, Symbols, and Artifacts.
Various other characteristics of design (carpeting, greeters, etc.).

52. 5. Warehouse Layout Balance space utilization & handling cost.
Similar to process layout.
Items moved between loading docks & various storage areas.
Optimum layout depends on:
Variety of items stored.
Number of items picked.

53. Space Utilization vs. Handling Costs
High space utilization (for storage).
Small, narrow aisles.
Product stacked high and deep (not easily accessible).
Ease of material handling.
Wide, short aisles.
Product easily accessible.
Design facility to optimize space utilization and handling costs tradeoff.

54. Assigned vs. Random Stock Locations
Assigned locations for products:
May be inefficient use of space.
Easier order picking and re-stocking.
Random locations:
More efficient use of space.
Added costs to track location of inventory and “open” space.
More difficult order picking and re-stocking.
Stock products to optimize cost and efficiencies tradeoffs.

55. Cross Docking (Wal-Mart)
Transferring goods:
From incoming trucks at receiving docks.
To outgoing trucks at shipping docks.
Avoids placing goods into storage.
Requires suppliers provide effective addressing (bar codes) and packaging for rapid transshipment.
In-coming
Outgoing

56. 6. Product-Oriented Layout
Used with product-focussed processes.
Facility organized around product.
High volume, low variety.
Types:
Fabrication line - Builds components.
Assembly line - Assembles components into products.
Students should be asked to suggest the conditions under which a product-oriented layout is most appropriate.

57. Product-Oriented Layout
Divide work into small tasks to be done by workers or machines.
Assign tasks to workstations.
Balance output of each workstation.
To smooth operations of the line.
To make workload equal.
To minimize idle time.
To achieve desired output.
Students should be asked to suggest the conditions under which a product-oriented layout is most appropriate.

58. Product-Oriented Layout Advantages
Lower variable cost per unit.
Lower material handling costs.
Lower work-in-process inventories.
Rapid throughput.
Easier training & supervision.

59. Product-Oriented Layout Disadvantages
High volume required.
Higher capital investment for special equipment.
Any work stoppage stops whole process.
Lack of flexibility in volume and product.

60. Repetitive Layout Note: 5 tasks or operations (T1-T5);
Work Station 1
Office
Belt Conveyor
Work Station 3
Work Station 2
Note: 5 tasks or operations (T1-T5);
3 work stations (orange rectangles)

61. Assembly Line Balancing Data
Usually we are given:
Production rate.
Units of product to be produced per unit time.
Production time available per day.
Tasks (operations) & task times.
Precedence relationships for tasks – in table or diagram.
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,

62. Assembly Line Balancing General Procedure
1. Determine cycle time - The time between production of successive units. (May be measured in seconds, minutes, etc.)
2. Calculate the theoretical minimum number of workstations, denoted N. (May not be achievable.)
3. Assign tasks to workstations to “balance” the line. Compute the efficiency.
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.

63. Assembly Line Balancing Equations
Production time available
Cycle time =
Production rate
Minimum number of work stations
 Task times = N
Rounded up =
Cycle time
 Task times
Efficiency =
(Actual number of work stations)
* (Cycle time)

64. Assembly Line Balancing Example 1
Task Time Predecessor
A 0.1 min. -
B 0.7 min. A
C 1.0 min. B
D 0.5 min. C
E 0.2 min. D
2.5 min.
Immediate
Suppose we want to produce 300 units/day and 8 hours are available each day. A B C D E
0.1
0.2
0.7
1.0
0.5

65. Assembly Line Balancing Example 1
Task Time Predecessor
A 0.1 min
B 0.7 min A
C 1.0 min B
D 0.5 min C
E 0.2 min D
2.5 min.
Immediate
Suppose we want to produce 300 units/day and 8 hours are available each day.
So assign tasks A-E to 2 workstations, where neither workstation should exceed 1.6 minutes.

66. Assembly Line Balancing Example 1
Task Time Predecessor
A 0.1 min
B 0.7 min A
C 1.0 min B
D 0.5 min C
E 0.2 min D
2.5 min.
Immediate
Suppose we want to produce 300 units/day and 8 hours are available each day. A B C D E
0.1
0.2
0.7
1.0
0.5
Can not use only 2 workstations! Must use 3.
Efficiency=2.5/(3*1.6) = 52.1%

67. Assembly Line Balancing Example 1
Both of these can produce 300/day in 8 hours. A B C D E
0.1
0.2
0.7
1.0
0.5
Efficiency=2.5/(3*1.6) = 52.1% A B C D E
0.1
0.2
0.7
1.0
0.5
Better balance!
Efficiency=2.5/(3*1.6) = 52.1%
Note: this line could produce 300 units in 5 hours (1 per minute) Efficiency=2.5/(3*1.0) = 83.3%

68. Assembly Line Balancing Example 1
If 2 workstations were required, then it will take more than 8 hours to produce 300 units. A B C D E
0.1
0.2
0.7
1.0
0.5
Cycle time = 1.7 minutes
Efficiency=2.5/(2*1.7) = 73.5%
Time to produce 300 units
1.7 min/unit*300 units = 510 minutes = 8.5 hours

69. Example 1 Summary Cycle Time to produce WS hrs
WS time units per day Efficiency % idle
min hours % %
min hours % %
min hours % %
Can use:
3 WS for 8 hours/day with large idle time, or
3 WS for 6.5 hours/day with low idle time, or
2 WS for 8.5 hours/day (overtime) with moderate idle time.

70. Assembly Line Balancing Heuristics
Longest (or shortest) task time.
Choose task with longest (or shortest) operation time.
Most following tasks.
Choose task with largest number of following tasks.
Ranked positional weight.
Choose task where the sum of the times for each following task is longest.
Least number of following tasks.
Choose task with fewest subsequent tasks.

71. Ranked Positional Weight Heuristic
Positional weight = Sum of times for a task and all tasks that must follow it.
1. Calculate positional weight for each task.
2. Assign task with largest positional weight to the earliest workstation where it fits.
- Obey precedence relations.
- Do not exceed cycle time.
3. Repeat step 2 until all tasks are assigned.

72. Line Balancing Example 2
Task Time Predecessor
A 0.2 min. -
B 0.6 min A,C
C 0.5 min. -
D 0.3 min. -
E 1.0 min B,D
F 0.2 min. D
G min E,F
3.7 min.
Immediate
Suppose we want to produce 450 units/day and 8 hours are available each day.

73. Line Balancing Example 2
Task Time Predecessor
A 0.2 min
B 0.6 min A,C
C 0.5 min
D 0.3 min
E 1.0 min B,D
F 0.2 min D
G min E,F
3.7 min.
Immediate
Suppose we want to produce 450 units/day and 8 hours are available each day.

74. Precedence Diagram - Example 2
0.2 A
0.6 B
1.0
0.5 E
0.9 C G
0.3 D
0.2 F

75. Example 2 - Positional Weight
Task Time Predecessor weight
A 0.2 min
B 0.6 min A,C
C 0.5 min
D 0.3 min
E 1.0 min B,D
F 0.2 min. D
G min E,F
3.7 min.
Immediate Positional

76. Example 2 - Assign Tasks Immediate Positional A(0.2) WS1 WS2 WS3 WS4
Task Time Predecessor weight
A 0.2 min
B 0.6 min A,C
C 0.5 min
D 0.3 min
E 1.0 min B,D
F 0.2 min D
G min E,F
3.7 min.
Immediate Positional
Cycle time = 1.07 min.
N = 4 workstations
WS1 WS2 WS3 WS4
C(0.5)
A(0.2)

77. Example 2 - Assign Tasks (cont.)
Task Time Predecessor weight
A 0.2 min
B 0.6 min A,C
C 0.5 min
D 0.3 min
E 1.0 min B,D
F 0.2 min D
G min E,F
3.7 min.
Immediate Positional
Cycle time = 1.07 min.
N = 4 workstations
WS1 WS2 WS3 WS4
C(0.5) B(0.6)
A(0.2)
D(0.3)

78. Example 2 - Assign Tasks (cont.)
Task Time Predecessor weight
A 0.2 min
B 0.6 min A,C
C 0.5 min
D 0.3 min
E 1.0 min B,D
F 0.2 min D
G min E,F
3.7 min.
Immediate Positional
Cycle time = 1.07 min.
N = 4 workstations
WS1 WS2 WS3 WS4
C(0.5) B(0.6) E(1.0) G(0.9)
A(0.2) F(0.2)
D(0.3)
Efficiency = 3.7/(4*1.07) = 86.4%

79. Precedence Diagram - Example 2
0.2 A
0.6 B
WS3
1.0
0.5 E
0.9 C G
0.3
WS4 D
0.2 F
WS1
WS2

80. Example 2 - Final Comment
Task Time Predecessor
A 0.2 min
B 0.6 min A,C
C 0.5 min
D 0.3 min
E 1.0 min B,D
F 0.2 min D
G min E,F
3.7 min.
Immediate
Could use a cycle time of 1 minute & produce 450 units in 7.5 hours
Efficiency = 3.7/(4*1.0) = 92.5%
WS1 WS2 WS3 WS4
C(0.5) B(0.6) E(1.0) G(0.9)
A(0.2) F(0.2)
D(0.3)