Operations Management: Layout Strategy

Operations
Management
Layout Strategy
1
What is Facility Layout

Location
or arrangement of everything
within & around buildings

Determines
long-run efficiency of
operations
Helps
achieve a strategy that
supports differentiation, low cost or

quick response
2
Strategic Importance of
Layout
Proper layout enables:
Higher
utilization of space, equipment and
people
Improved
flow of information, materials, or
people
Improved
employee morale and safer working
conditions
Improved
customer/client interaction
Flexibility
to change--use small, movable or
modular equipment; etc

3
Layout Strategies
Office
layout
positions workers, their equipment, and

spaces/offices to provide for movement
of communication and information
Retail/service layout
allocates shelf space and responds to

customer behavior
Warehouse layout
addresses trade-offs between space

and material handling
4
Seven Layout Strategies

Fixed-position
layout
large bulky projects such as ships and

buildings
Process-oriented
layout
deals with low-volume, high-variety

production (job shop, intermittent
production)
Product-oriented layout
seeks the best personnel and machine use in

repetitive or continuous production, line
balancing
5
Office Layout
Design
positions people,
equipment, & offices for
maximum people and
information flow, comfort and
safety
Relationship chart used
Examples
Banks
Software company
Office Layout Floor Plan
Finance
Accounting
Fin.
Manager
Acct.
Brand X
Retail/Service Layout
Design
maximizes product
exposure to customers
Decision variables
Store flow pattern
Allocation of (shelf) space to products
Retail Layouts Some Rules of Thumb

Locate
high-draw items around the

periphery of the store
Use prominent locations such as the
first or last aisle for high-impulse and
high margin items
Distribute power items (items that
may dominate a shopping trip) to both
sides of an aisle, and disperse them to
increase the viewing of other items
Use end aisle locations because they
have a very high exposure rate
9
A Good Service Layout

Considers
Ambient
conditions - background
characteristics such as lighting, sound,

smell, and temperature.
Spatial
layout and functionality - which
involve customer circulation path planning

Signs,
Symbols, and Artifacts -
characteristics of building design that

carry significance
10
Warehouse Layout
Design
balances between space

utilization & handling cost
Similar
to process layout
Items moved between dock & various

storage areas
Optimum
layout depends on
Variety
of items stored
Number
of items picked
11
Fixed-Position Layout
Design
is for stationary project
Workers
and equipment come to site
Complicating
factors
Limited space at site
House, shipyard etc.
12
Process-Oriented Layout
Design
places departments with large
flows of material or people together

Department
areas having similar
processes located in close proximity
e.g., All x-ray machines in same area
Supports
process-focused strategy i.e.
product differentiation stategy

13
Emergency Room Layout

Triage room
Patient A broken leg
ry
E.R. Admissions
Su
rge
Patient B heart
problems
Labs
Ra
dio
log
y
E.R. beds
Pharmacy
Billing/exit
14
Product-Oriented Layout
Facility
organized around product

Design minimizes line imbalance
Delay between work stations
Types:
Fabrication line; assembly line
15
Steps in Developing a
Process-Oriented Layout
1
2
3
4
5
6
Construct a from-to matrix

Determine space requirements for each
department
Develop an initial schematic diagram
Determine the cost of this layout
By trial-and-error (or more sophisticated
means), try to improve the initial layout
Prepare a detailed plan that evaluates
factors in addition to transportation cost
Cost of Process-Oriented
Layout
n
Minimize cost X ij C ij
i 1 j1
where n 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
Interdepartmental Flow
of Parts
1
2
3
4
5
1
2
3
4
5
6
50
100
20
30
50
10
20
100
50
0
0
Graph Showing Number
100
of Weekly Loads
1
50
30
20
50
10
50
20
100
Possible Layout 1
Room 1
Room 2
Room 2
Assembly
Printing
Machine Shop
Department
Department
Department
(1)
(2)
(3)
Receiving
Shipping
Testing
Department
Department
Department
(4)
Room 4
(5)
Room 5
60
(6)
Room 6
40
Graph Showing Number
30
of Weekly Loads
2 2
2
1
50
100
20
50
20
100
10
4
50
Possible Layout 3
Room 1
Room 2
Painting
Assembly
Machine Shop
Department
Department
Department
(2)
(1)
Room 2
(3)
Receiving
Shipping
Testing
Department
Department
Department
(4)
Room 4
(5)
Room 5
60
(6)
Room 6
40
Assembly Line Balancing

Analysis
of production lines
Nearly equally divides work between
workstations while meeting required
output
Objectives
Maximize efficiency
Minimize number of
work stations

The General Procedure
Determine cycle time by taking the

demand (or production rate) per day and
dividing it into the productive time
available per day
Calculate the theoretical minimum number
of work stations by dividing total task time
by cycle time
Perform the line balance and assign
specific assembly tasks to each work
station

Steps
1.
2.
3.
4.
5.
6.
7.
8.
Determine tasks (operations)

Determine sequence
Draw precedence diagram
Estimate task times
Calculate cycle time
Calculate number of work stations
Assign tasks
Calculate efficiency
Precedence Diagram
Example
10
Min.
A
11
C
4
5
3
D
12
11

Equations
Cycle time
Minimum
number of
work
stations
Efficiency
Production time available

Demand per day
Task times
Cycle time
Task times
(Actual
* (Cycle time)
number of
work stations)
Cycle time calc.

On
the basis of precedence diagram and

activity times given above, the firm
determines that there are 480
productive minutes of work available per
day. Furthermore, production schedule
requires that 40 units be completed as
output from the assembly line each day.
Cycle time:480/40=12 minutes per unit
Min no. of workstations:66/12=5.5 or 6
Six Station Solution

5
C
10
11
3
I
12
11

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Operations

What is Facility Layout

within & around buildings

achieve a strategy that

supports differentiation, low cost or

utilization of space, equipment and

flow of information, materials, or

employee morale and safer working

to change--use small, movable or

modular equipment; etc

positions workers, their equipment, and

allocates shelf space and responds to

addresses trade-offs between space

Seven Layout Strategies

large bulky projects such as ships and

deals with low-volume, high-variety

seeks the best personnel and machine use in

Office Layout Floor Plan

Retail Layouts Some Rules of Thumb

high-draw items around the

A Good Service Layout

characteristics such as lighting, sound,

layout and functionality - which

involve customer circulation path planning

Symbols, and Artifacts -

characteristics of building design that

balances between space

Items moved between dock & various

is for stationary project

and equipment come to site

Limited space at site

House, shipyard etc.

places departments with large

flows of material or people together

areas having similar

processes located in close proximity

e.g., All x-ray machines in same area

process-focused strategy i.e.

product differentiation stategy

Emergency Room Layout

Patient A broken leg

organized around product

Delay between work stations

Fabrication line; assembly line

Construct a from-to matrix

where n total number of work centers

Assembly Line Balancing

Assembly Line Balancing

Determine cycle time by taking the

Assembly Line Balancing

Determine tasks (operations)

Assembly Line Balancing

Production time available

Cycle time calc.

the basis of precedence diagram and

Six Station Solution

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