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DOM 102 : Principles of Operations management

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1 DOM 102 : Principles of Operations management
Process Flows & Facilities Layout Ó Irwin/McGraw-Hill, A Division of the McGraw-Hill Companies PowerPoint Supplement developed by: William E. Youngdahl World Business Department Thunderbird, The American Graduate School of International Management 1

2 Recall - Process Flow Structures
Job shop – eg making one chair for an individual by a furniture workshop Batch shop eg making many chairs for the university of Nairobi by a furniture workshop Assembly Line - eg Automobile manufacturer, putting parts together to make the finished product – GM Continuous Flow - eg Petroleum manufacturer – Kenya Oil Refineries 12

3 These are the major stages of product and process life cycles
IV. Continuous Flow III. Assembly Line II. Batch I. Job Shop Low Volume, One of a Kind Multiple Products, Volume Few Major Higher High Standard- ization Commercial Printer French Restaurant Heavy Equipment Automobile Burger King Sugar Refinery Flexibility (High) Unit Cost (High) Flexibility (Low) Unit Cost (Low) These are the major stages of product and process life cycles 13

4 Facility Layout Defined
Facility layout can be defined as the process by which the placement of departments, workgroups within departments, workstations, machines, and stock-holding points within a facility are determined Determined by the type of process flow chosen 3

5 Facilities Layout - Introduction
Layout planning Centers to contain Space & Capacity for each centre Center space configuration Center location – interdepedence 2 2

6 Facilitating material & info flow
Strategic Issues Facilitating material & info flow Efficient labor & equipment utilization Customer convenience & sales Reducing hazards to workers Improving employee morale Maximizing flexibility, co-ordination, visibility Minimizing distance, handling cost etc Creating inherent safety 2 2

7 Choice depends on firms flow strategy Process layout – low volumes
Layout Types Choice depends on firms flow strategy Process layout – low volumes Resources relatively general purpose & less capital intensive Less vulnerable to product mix changes Equipment utilization Employee supervision can be more specialised 2 2

8 Process layout – Disadvantages
Layout Types - Process Process layout – Disadvantages Processing rates slow Productive time lost More space & capital tied up in inventory Time lags between jobs – productivity Material handling costly Diversity in routings – variable path devices Pdtcn planning & control difficult 2 2

9 Layout Types – Product Line flow strategy for continuous prdtn – high volumes Advantages Processing rates high Less Productive time lost Lower inventories Disadvantages Risk of layout redesign for short product lives Less flexibility Low resource utilization for low volumes Pdtcn planning & control difficult 2 2

10 A mix of process & Product Used for fabrication & assembly
Layout Types – Hybrid A mix of process & Product Used for fabrication & assembly Used in situations like flexible mfg systems (FMS) Group Technology cell (GT) One Worker Multiple Machines (OWMM) cell 2 2

11 Layout Types – Fixed position
Product is fixed in one place Key consideration is sequence of material usage & hence placement Used for massive product Ship building Building dams or bridges 2 2

12 Performance Criteria facing planner
Capital investment level Requirements for materials handling Ease of stock – picking Working environment & ‘atmosphere Ease of equipment maintenance Employee attitudes Amount of flexibility needed Customer convenience & sales level 2 2

13 Goal--maximize customer contact and communication across sections
Office Layout Goal--maximize customer contact and communication across sections Current trend – partial glass separators between offices Issues Communication Work flow sequence Sharing of office equipment Fast throughput 37

14 Goal--maximize net profit per square foot of floor space
Retail Service Layout Goal--maximize net profit per square foot of floor space Servicescapes – the physical surroundings in which the service takes place & how the surroundings affect customers & employees Ambient Conditions Spatial Layout and Functionality Signs, Symbols, and Artifacts 37

15 Retail Service Layout Ambient Conditions – refers to background characteristics such as the noise level, music, lighting, temperature & scent Affect employee performance & morale as well as customers perceptions of the service, how long they stay, & how much money they spend Though primarily influenced by the design of the building, the layout within a building can also affect 37

16 Spatial Layout and Functionality
Retail Service Layout Spatial Layout and Functionality Planning the circulation path of the customers & grouping the merchandise Goal of circulation planning is to expose customers to as much of the merchandise as possible while placing any needed services along the path 37

17 Retail Service Layout Signs, symbols & artifacts – parts of the service that have social significance Are a characteristic of the design of the building although the orientation, location & size of many objects can carry special meaning E.g person seated closest to entrance, car salespeople having blackboards in their offices 37

18 Marks of a good layout for manufacturing & back-office operations
Production time predictable Little inter-stage storage of materials Open plant floors so everyone can see what is happening Bottleneck operations under control Workstations close together Orderly handling & storage of materials No unnecessary re-handling of materials Easily adjustable to changing conditions Straight-line flow pattern or adaptation 37

19 Marks of a good layout for face-to-face services
Adequate waiting facilities Easy communication with customers Easily maintained customer surveillance Easily understood service flow pattern Clear exit & entry points with adequate checkout facilities Depts & processes arranged so that customers see only what you want them to see Balance between waiting areas & service areas Minimum walking & material movement Lack of clutter High sales volume per square foot of facility 37

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