Strategic Facilities Planning

Strategic facilities planning
The science and art of employing the resources of a firm
to achieve its business objectives
Goals
Vision
Mission
Long Term Objectives
Strategies
Annual objectives
Policies
Procedures
Action plan
How activities tangible of fixed assets best support achieving the activities
objectives.
The more aggregate a facilities planning mistake, the more costly it will be, the less
likely it will be changed, and the longer it will affect the operations by Hicks
Every element of the organization must support the objectives of the firm.
Developing FP strategies:
Team-based approach
Multidimensional Aspects
Impact of changes (Flexibility)
Not driven by profit only
What if Question (uncertainty envelop)
Functional strategies
Strategic Facilities Planning

Characteristics
Long time horizon
Less certainty
Less structured
More end oriented
Poorly defined information
Trends to have irreversible impact
Focus on the whole
As noted by skinner When companies fail to recognize the relationship

between manufacturing decisions and corporate strategy, they may become
saddled with seriously noncompetitive production systems that are expensive
and time-consuming to change.
Feasibility analysis
Lease versus own analysis
Buy/build/expand/renovate analysis
Merger/acquisition facility study
Analysis of highest and best use
Consolidation study
Decentralization study
Space optimization plan (restacking plan)
Project estimating and scheduling
Stay/move analysis
Developing facilities planning strategies
Facilities Planning Improvement
Dwight D. Eisenhower said, The plan in nothing, but

planning is everything.
Skinner, Manufacturing affects corporate strategy, and

corporate strategy affects manufacturing. Even an
apparently routine operating area such as a production
scheduling system, strategic considerations should
outweigh technical and conventional industrial engineering
factors invoked in the name of productivity.
Developing Facilities Planning Strategies
The process of effectively translating objectives into actions

can take place only if the power of the individuals inside a
organization is unleashed.
It is important to recognize that each functional strategy is

multidimensional
The Model of Success is effective because it is lateral

approach rather than a hierarchical one.
A number of internal functional areas tend to have a

significant impact on Facilities planning, including
marketing, product development, manufacturing,
production and inventory control, human resources,
and finance. Marketing decisions affect the location of
facilities and the handling system design
Product development & design decisions affect

processing & materials requirements, which in turn
affect layout & material handling.
Changes in component shapes, product complexity,

number of new part numbers, sizes introduced,
stability of product design, and the number of products
introduced affect the handling, storage, and control of
materials
Decisions concerning the degree of vertical integration,

types and levels of automation, types and levels of
control over tooling and work-in process, plant sizes,
and general-purpose versus special-purpose
equipment can affect the location and design of
manufacturing and support facilities.
Close coordination is required in developing facilities

plans to support manufacturing and distribution.
Manufacturing/facilities planning and
distribution/facilities planning interfaces are especially
important.
As the manufacturing plan addresses automatic

load/unload of machines, robotics, group technology,
transfer lines, flexible manufacturing systems, numerically
controlled machines, just-in-time and computer-integrated
manufacturing, alternative storage systems for tooling and
work-in-process, real-time inventory control, shop floor
control, and waste handling/removal systems, the facilities
plan must support changes in manufacturing technology

Long Range
1.
2.
3.
Number, location, and sizes of warehouses and/or

distribution centers
Centralized versus decentralized storage of supplies,
raw materials, work-in-process, and finished goods for
single and multi-building sites, as well as single and
multisite companies
Acquisition of existing facilities versus design of

modern factories and distribution centers of the
future

Long Range
4.
Flexibility required because of market and

technological uncertainties
5.
Interface between storage & manufacturing
6.
Level of vertical integration, including "subcontract

versus manufacture' decisions

Long Range
7.
Control systems, including material control and

equipment control, as well as level of distributed
processing
8.
Movement of material between buildings and between

sites, both inbound and outbound

Long Range
9.
Changes in customers and suppliers' technology as

well as a firm's own manufacturing technology and
material movement, protection, storage, and control
technology
10.
Design-to-cost goals for facilities
Examples of Inadequate Planning
A textile firm installed a large high-rise AS/RS for one

of its divisions. The amount and size of the product to
be stored subsequently changed. Other changes in
technology were projected. The system became
obsolete before it was operational.
A manufacturer of automotive equipment acquired the

land for a new manufacturing plant. The manufacturing
team designed the layout, and the architect began
designing the facility before the movement, protection,
storage, and control system was designed.
An established brick-and-mortar retailer began

accepting orders through its Web site. The volume of
orders received during the holiday season peak could
not be processed by its distribution center.
Summary
Determines how an activity's tangible fixed assets

should contribute to meeting the activity's objectives
Consists of facilities location and facilities design is

part art and part science
Can be approached using the engineering design

process
Summary
Is a continuous process and should be viewed from a

life-cycle perspective
Represents one of the most significant opportunities

for cost reduction and productivity improvement

Strategic Facilities Planning

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