Engineering Production Planning 1

Facilities
What?
* requirements which are necessary to carry out
the conversion process located or available
within the plant or office
* include not only the buildings and spaces but
also the all kind of resources/equipment directly
or indirectly related to the conversion process
1
Facilities
* Main Components of Facilities Planning

where to locate – it can be plant, warehouse, etc.
size of the facility – structure, extent, etc.
what arrangement – layout
what required – furniture. Lighting, decorative
features, etc.
*These components are strongly interrelated
* Contribution of all these components are equally
important to run the conversion process
successfully 2
Location of Facilities
Why Selecting a Suitable Location is Vital?

easy access to required resources
easy access to the target market
assistance from controlling bodies
security concerns
minimum disturbances
sound infrastructure facilities
availability of all kind of transportation
facilities
3
Facilities Decisions
Framework for Facilities Planning

forecasting demand
measuring facility capacity
determining facility needs
generating alternatives
evaluating alternatives
facilities decision
4
Crucial Questions to be Answered

how much capacity is needed ?
when is the capacity is needed ?
where should the capacity located ?
These Questions will give
an aggregate measure
product-mix effect
operation policies (hrs./week, etc.)
sustained and peak capacity 5
Cost involved – Tangible Costs

cost of land, building, equipment, etc.
transportation costs
utilities costs
taxes and insurances
labour costs
material costs, etc.
6
Cost involved – non cost factors (Intangible)

availability of labour
labour and union relationship
community attitudes
government regulations
quality of life (climate, schools, recreations,
etc.)
environmental impacts
corporate stratergy
7
Ex; Location of a Bakery

Factors Considered and Weight Allocated
availability of labour - 15
labour and union relationship – 5
community attitudes – 5
government regulations – 5
quality of life – 10
corporate stratergy (annual ROI) – 60
8
Arrangement of Facility
Size of the Facility

required to consider current and future
needs
Structure of the Facility
once the size of the facility decided
structure can be finalized
Layout of the Facility
where and how machines are fixing and
how other resources are stationing
9
Location Decision
• Location decision models use costs and

preferences to reach location decisions.
* Transportation models (TMs) use costs,
• Scoring models use combinations of costs and
preferences.
• Breakeven analysis use to select facility and
equipment.
• Plant, equipment, and tooling decisions take by
engineering, production or operation. Finance, etc.
10
Factors Affecting Location Decision
1. Process inputs
closeness to sources is an important factor
* transportation costs affect profit margins.
2. Process outputs
close to customers is a competitive advantage
* lower transport costs for shipping finished
goods
* ability to satisfy customers’ needs and
* respond rapidly to competitive pricing
11
3. Process requirements
availability of essential resources such as
water, energy, and labor skills
4. Personal preferences
decision makers preferences
such decisions may override economic
advantages
12
5. Governmental issues
* such as tax, tariff, trade, and legal factors
* trade agreements and country laws
6. Site and plant availabilities
* interaction between the location and the
available facilities
13
Facility Selection using Scoring Model
Steps involved
Step 1: all factors that affect the location are identified.
Step 2: each factor is assigned a weight that gives the
relative ranking of various factors.
Step 3: alternative locations that have been under
discussion are then listed.
Step 4: each alternative is evaluated and is given a
score on a ten point scale
Step 5: total score for each location is calculated by
multiplying the weight of each factor by the
points it earned 14
Facility Selection – Transportation Model
Shipping (Transportation and Distribution) Cost

One Supplier / Two Factories / One market Situation
Factory A
Supplier Market
Factory B
15
Facility Selection Breakeven Analysis
Variable (Direct) Costs

costs of input resources directly attributable to the product.
called direct costs - paid out on a per-unit of output basis.
labor and materials are some
Total variable costs, TVC = C*Q, C – Rate, Q – Quantity
Fixed (Indirect) Costs
cost irrespective of quantity produced
administrative and supervisory costs, etc.
called as overhead costs – these costs can not be
assigned to product
16
Mass / Continuous Production Systems
Features
produce standardized products for a fixed demand
standard set of process and operation sequence
ensures continuous production of output.
less work in process (wip) inventory
high rate of production
high product quality
high capital investment in machinery/equipment.
large volume of small variety of output is produced.
e.g. oil refineries, cement manufacturing and sugar
factory etc. 17
Job / Unit Production Systems
Features
produce as per customer's specifications.
production of large number of batches/orders.
comprises of a small lot of identical products
different from other batches
comparatively smaller investment in machines and
equipment
flexible
can be adapted to changes in product design and
order size without much inconvenience.
18
Batch/Intermittent Production Systems
Features
different products in small quantities
similar products in small quantity.
specific order or to meet a continuous demand.
only once or repeatedly at irregular time intervals
goods may be produced partly for inventory and
partly for customer's orders.
components are made for inventory but they are
combined differently for different customers.
automobile plants, printing presses, electrical
19
goods plant are examples of this type of
Type of Manufacturing Processes
Jobbing manufacturing process

Batch manufacturing process
Mass or flow manufacturing process
Process type manufacturing process
20
Jobbing Manufacturing Processes
used to produce one or few units of the products as

per the requirement and specification of the customer.
production is to meet the delivery schedule and costs
are fixed prior to the contract made with the customer.
21
Batch Manufacturing Processes
used to produce limited quantities of each of

the different types of products in the form of
batches.
batches of different products are manufactured
on same set of machines.
different batches/products are produced
separately one after the other.
22
Mass / Flow Manufacturing Processes
used to produce a large quantity of same product

stocked for sale.
Machines/equipment are arranged according to the
sequence of operations
ensures very high rate of production
line arrangement can produce only one type of
product
different line arrangement is needed for a different
product
23
Process type Manufacturing Processes
used to produce products which need a particular

process/definite sequence of operations.
E.g. petroleum. In this, production run is conducted for

an indefinite period.
24
Objectives of Layout Design
* Productive movement of materials, workers, etc.

* Meaningful work flow, less travel distances, etc.
* Maximum utilization of available space
* Enhancing safety and satisfaction of users
* Flexibility to meet future requirements
* Achieving the overall operational objectives
25
Important Factors in Layout Design
Types of Products Going to be Produced (P)

different product designs or types
made in the plant
Quantity to be Produced (Q)
number of units of a given part or
products that the facility produces
Work Systems and the Methods
Measurement, and Management of Work
26
Basic Types of Layout
Process layout
Product layout
Group Layout (Combination Layout)
Fixed-position layout
27
Process Type of Layout
* Equipment is arranged according to function

* Ideal for
low and medium production quantities and
medium to high product variety
* Different parts or products are processed in
different operations
* Produced in batches
* Each batch follows its own routing
* No common work flow followed by all work
units
28
Product Type of Layout
* Layout in which workstations and equipment are

located along the line of flow of the work units
* Suited to high production quantities and low
product variety
* Work units typically moved by powered conveyor
* At each workstation, a small amount of the total
work content is accomplished on each work unit
* Each station specializes in its task, thus achieving
high efficiency
29
Group Layout
* combination of both process and product layout.

• set of machinery/equipment grouped together
in a section so that each group is used to
perform similar operations to produce a family
of components.
* machines grouped in to cells.
* minimizes the cost of transport/equipment.
30
Fixed Position Layout
* Product remains in one location during

manufacturing/fabrication
product is large and heavy
ship industry, etc.
* Workers/equipment brought to the product
* Suited to
low production quantities and
high product variety
* Equipment is portable or mobile
31
PQRST Method
* P – Product – Type of products

* Q – Quantity – how many of each product
* R – Routing – parts and products are moving
throughout the manufacturing
process
* S – Supporting Services – requirements to
carryout the manufacturing
process uninterruptedly
* T – time related issues - supply/delivery
schedules 32

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Facilities

* Main Components of Facilities Planning

Why Selecting a Suitable Location is Vital?

Framework for Facilities Planning

Crucial Questions to be Answered

Cost involved – Tangible Costs

Cost involved – non cost factors (Intangible)

Ex; Location of a Bakery

Size of the Facility

• Location decision models use costs and

Shipping (Transportation and Distribution) Cost

Variable (Direct) Costs

Jobbing manufacturing process

used to produce one or few units of the products as

used to produce limited quantities of each of

used to produce a large quantity of same product

used to produce products which need a particular

E.g. petroleum. In this, production run is conducted for

* Productive movement of materials, workers, etc.

Types of Products Going to be Produced (P)

* Equipment is arranged according to function

* Layout in which workstations and equipment are

* combination of both process and product layout.

* Product remains in one location during

* P – Product – Type of products

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