facilities layout
DESCRIPTION
Facilities LayoutTRANSCRIPT
Facilities Layout
Facilities Layout
Layout: the configuration of departments, work centers, and equipment, with particular emphasis on movement of work (customers or materials) through the system
• Product layouts
• Process layouts
• Fixed-Position layout
Objective of Layout Design
Facilitate attainment of product or service quality
Use workers and space efficiently
Minimize unnecessary material handling costs
Eliminate unnecessary movement of workers or materials
Minimize production time or customer service time
Design for safety
Importance of Layout Decisions
Requires substantial investments of money and effort
Involves long-term commitments
Has significant impact on cost and efficiency of short-term operations
The Need for Layout Decisions
Inefficient operations
Changes in the designof products or services
The introduction of newproducts or services
Accidents
Safety hazards
The Need for Layout Design (Cont’d)
6-6
Changes inenvironmentalor other legalrequirements
Changes in volume ofoutput or mix of
products
Changes in methodsand equipment
Morale problems
Basic Layout Types
Product layouts
Process layouts
Fixed-Position layout
Basic Layout Types
Product layout Layout that uses standardized processing
operations to achieve smooth, rapid, high-volume flow
Process layoutLayout that can handle varied processing
requirementsFixed Position layout
Layout in which the product or project remains stationary, and workers, materials, and equipment are moved as needed
Product Layout
Raw materialsor customer
Finished item
Station 2
Station 2
Station 3
Station 3
Station 4
Station 4
Material and/or labor
Station 1
Material and/or labor
Material and/or labor
Material and/or labor
Used for Repetitive Processing
Product Layout
Work Station 1
Work Station 2
Work Station 3
Product Layout(sequential)
Used for Repetitive Processing
Advantages of Product Layout
High rate of outputLow unit costLabor specializationLow material handling costHigh utilization of labor and equipmentEstablished routing and scheduling
Disadvantages of Product Layout
Creates dull, repetitive jobsPoorly skilled workers may not maintain
equipment or quality of outputFairly inflexible to changes in volumeHighly susceptible to shutdownsNeeds preventive maintenanceIndividual incentive plans are impractical
A U-Shaped Production Line
1 2 3 4
5
6
78910
In
Out
Workers
Process Layout
Dept. A
Dept. B Dept. D
Dept. C
Dept. F
Dept. E
Advantages of Process Layouts
Can handle a variety of processing requirements
Not particularly vulnerable to equipment failures
Equipment used is less costlyPossible to use individual incentive plans
Disadvantages of Process Layouts
In-process inventory costs can be highChallenging routing and schedulingEquipment utilization rates are lowComplexities often reduce span of
supervisionSpecial attention for each product or customer
Fixed Position Layouts
Fixed Position Layout: Layout in which the product or project remains stationary, and workers, materials, and equipment are moved as needed.
Nature of the product dictates this type of layout Weight Size Bulk
Large construction projects
Functional vs. Cellular Layouts
Dimension Functional Cellular
Number of moves between departments
many few
Travel distances longer shorter
Travel paths variable fixed
Job waiting times greater shorter
Throughput time higher lower
Amount of work in process
higher lower
Supervision difficulty higher lower
Scheduling complexity higher lower
Equipment utilization lower higher
Design Product Layouts: Line Balancing
Line Balancing is the process of assigning tasks to workstations in such a way that the workstations have approximately equal time requirements.
Cycle Time
Cycle time is the maximum time allowed at each workstation tocomplete its set of tasks on a unit.
Determine Maximum Output
D
OT = timecycle = CT
rateoutput Desired= D
dayper timeoperating OT
CT
OT = rateOutput
D
OT = timecycle = CT
rateoutput Desired= D
dayper timeoperating OT
CT
OT = rateOutput
Determine the Minimum Number of Workstations Required
task timeof sum = t
CT
t)( =N
Precedence Diagram
Precedence diagram: Tool used in line balancing to display elemental tasks and sequence requirements
A Simple Precedence Diagrama b
c d e
0.1 min.
0.7 min.
1.0 min.
0.5 min. 0.2 min.
Calculate Percent Idle Time
Percent idle time = Idle time per cycle
(N)(CT)
Efficiency = 1 – Percent idle time
Using information contained in each of the following, do each of the following:
1.Draw a precedence dia.
2.Assuming an 8 hour workday. Compute the cycle time needed to obtain an output of 400 units per day
3.Determine the minimum number of workstations required
Task Immediate follower
Task time in Minutes
A B .2
B E .2
C D .8
D F .6
E F .3
F G 1
G H .4
H end .3
Precedence Diagram
c d
a c e
f g h
0.2 0.2 0.3
0.8 0.6
1.0 0.4 0.3
e
e
a c e g h i
b d f
. 3 min . 4 min . 2 min . 1 min . 5 min . 3 min
. 6 min 1.2 min .6 min
Station 1 Station 2 Station 3 Station 4
a b ef
d
g h
c
Parallel Workstations
Parallel Workstations are used to achieve a smooth flow of production. These are beneficial for bottleneck operations which would otherwise disrupt the flow of product as it moves down the line.
The bottleneck may be the result of parallel or very long tasks. Parallel workstations increases the work flow and provide flexibility
Bottleneck Workstation
1 min.2 min.1 min.1 min. 30/hr. 30/hr. 30/hr. 30/hr.
Bottleneck
Parallel Workstations
1 min.
2 min.
1 min.1 min. 60/hr.
30/hr. 30/hr.
60/hr.
2 min.
30/hr.30/hr.
Parallel Workstations
Cases
Case Study 1: ‘Professor’ Lalu scripts Indian Railway’s Turnaround
Case Study 2: Honda’s Mixed Model Assembly Lines
Johnson’s Rule
A technique for minimizing completion time for a group of jobs to be processed on two machines
Johnson’s Rule Conditions• Job time must be known and constant
• Jobs must follow same two-step sequence
• All units must be completed at the first work center before moving to second
Johnson’s Rule Optimum Sequence
1.List the jobs and their times at each work center
2.Select the job with the shortest time
3.Eliminate the job from further consideration
4.Repeat steps 2 and 3 until all jobs have been scheduled
Example
Time on machine A
Time on machine B
Job 1 10 2
Job 2 5 7
Job 3 4 10
Job 4 12 8
Job 5 9 6
Problems
1. The time required to complete each of the 8 jobs in a 2 machine flow shop are shown in the table that follows on the next slide. Each job must follow the same sequence. Beginning with machine A and moving to machine B.
A.Determine a sequence that will minimize a Makespan time
B.Construct a chart of resulting sequence and find machine B’s idle time
Job Machine A Machine B
A 16 5
B 3 13
C 9 6
D 8 7
E 2 14
F 12 4
G 18 14
H 20 11
Time in Hours
2. Precision machining provides custom machining for its customers. The company presently uses a first come first served sequencing rule for customer jobs. Because the company wants to finish customer jobs faster, it is considering 2 other rules
: shortest processing time and critical ratio. The company thinks that these criteria are important in selecting a sequencing rule: average flow time, average number of jobs in the system, and average job lateness. Study precision’s situation and recommend a sequencing rule.
Pl see the Table on next page
Job Sequence Production time(hrs)
Time to promised delivery ( hrs)
A 2 4
B 5 18
C 3 8
D 4 4
E 6 20
f 4 24
Case
6-46
a. Draw a precedence diagramb. Assuming that 55 minutes per hour are productive, compute
the cycle time required to obtain 50 units per hourc. Determine the minimum number of workstationsd. Assign tasks to workstationse. Find idle time and percent efficiency
4. Determine the placement of departments for a newly designed facility that will minimize total transportation costs using data in the following tables. Assume that reverse distances are the same. The locations are shown in the grid. Use a cost of $1 trip yard
Location A Location B Location C
Location D
4 contd….Distance between
location yards
To A B C D
From
A - 40 80 70
B - 40 50
C - 60
D -
Number of trips per dayBetween departments
To 1 2 3 4
From
1 - 10 20 80
2 - 40 90
3 - 55
4 -
5
Five departments are to be assigned to locations B-F in the grid (For technical reasons deptt. 6 must be assigned to location A). Transportation costs is $2 per foot. The objective is to minimize total transportation cost. Information on interdepartmental work flows and distances between locations is shown in the following tables. Assign departments with the greatest interdepartmental work flow first.
See related tables in the next slides
From To A B C D E F
A - 50 100 50 80 130
B - 50 90 40 70
C - 140 60 50
D - 50 120
E - 50
F -
Distance between locations (feet)
From To 1 2 3 4 5 6
1 - 125 62 64 25 50
2 - 10 17 26 54
3 - 2 0 20
4 - 13 2
5 - 5
6 -
Number of trips per day between centers
ADept 6 B
D
C
E F
MRP and ERP Problems
How does the purpose of ERP differ from MRP - II
If seasonal variations are present, is their incorporation into MRP fairly simple or fairly difficult. Explain briefly
What is the difference between planned order receipts and scheduled receipts
Briefly describe MRP-II and closed loop MRP
What is the major limitation of MRP
What are the major requirements for an effective MRP
How is safety stock included in MRP
Problem
E
M (3) I (2)
N (4) VR (2) P
Given the following production schedule in units and the production standards for labor and machine time for this product, determine the labor and machine capacity requirements for each week. Then compute the percent utilization of labor and machines in each week if labor capacity is 200 hours per week and machine capacity is 250 hours per week.
Production Schedule:Week 1 2 3 4 .Quantity 200 300 100 150 Standard Times .Labor .5 hour/unitMachine 1.0 hour/unit
Problem
Develop a Material Requirements plan for component H. Lead times for the end item and each component except B are 1 week. The LT for B is 3 weeks. Sixty units of A are required at the start of week 8. There are currently 15 units of B on hand and 130 units of E on hand, and 50 units of H are in production and will be completed by the start of week 2.
Z
A C (4) B (2)
D (2) E E (2) F D (3) G (2)
D
Problem
Balance system: Distributing the workload evenly among work stations
Work assigned to each work station must be less than or equal to the cycle time
Cycle time is set equal to the takt time
Takt time is the cycle time needed to match customer demand for final product
Using Closeness Ratings to Develop Service Facility Layouts
Typical Closeness Ratings
Closeness Meaning
Rating of Rating
1 Necessary 2 Very
Important 3 Important 4 Slightly
Important 5 Unimportant 6 Undesirable
Example: AG Advertising
Using Closeness Ratings
AG Advertising is moving into a new office suite having seven large, roughly equal size rooms, one for each department of the firm. Lisa, the manager, must now assign each department to a room. She has developed a grid of closeness ratings (on the next slide) for the 21 unique pairs of departments.
, one for each department of the firm. Lisa, the manager, must now assign each department to a room. She has developed a grid of closeness ratings (on the next slide) for the 21 unique pairs of departments.
Example: AG Advertising
55
66
44
44
22
3333
55
44
11
2266
2244
3333
116655
1122
A
B
C
D
E
F
G
Example: AG Advertising
Unassigned Rooms of Office Suite
• Layout Satisfying All Pairings of Departments with 1 Closeness Ratings
CR = 1 B – D B – F C – G
Example: AG Advertising
BB DD
FF CC GG
CR = 1
B-DB-FC-G
Trying to satisfying all pairings of departments with 6 closeness ratings, we see that Dept. C needs to be moved
BB DD
FF GG CC
CR = 1
B-DB-FC-G
CR = 6
A-DB-CB-G
Layout Satisfying All Pairings of Departments with 6 Closeness Ratings (note that we swapped Dept. D and Dept. F)
BB FF AA
DD EE GG CC
CR = 1
B-DB-FC-G
CR = 6
A-DB-CB-G
Procedure for setting Takt time
Takt time is often set for a work shift. The procedure for obtaining the takt time is:
1. Determine the net time available per shift by subtracting any non productive time from total shift time
2. If there is more than one shift per day, multiply the net time per shift by the number of shifts to obtain the net available time per day
3. Compute takt time by dividing the net available time by demand
Given the following information, compute the takt time: Total time per shift is 480 minutes per day, and there are 2 shifts per day. There are 40 minutes rest breaks and a 30 minutes lunch break per shift.
Daily demand is 80 units.
Problem
1. Compute net available time per shift:
Total time 480 minutes
Rest breaks -40 minutes
Lunch -30 minutes
= 410 minutes per shift
2. Compute the net available per day
410 minutes per shift * 2 shifts / day
= 820 minutes per day
3. Compute the takt time = Net time available per day / daily demand =
820 min per day / 80 units per day = 10.25 minutes per cycle
Usage at each work center is 300 parts per day, and a standard container holds 25 parts. It takes an average of .12 day for a container to complete a circuit from the time a Kanban card is received until the container is returned empty. Compute the number of Kanban cards required if X = .20
N = ?
D = 300 parts per day
T = .12 day
C = 25 parts per container
X = .20
N = 300 (.12)(1+.20) / 25 = 1.728 = 2
Determine the number of containers needed for a work station that uses 100 parts per hour if the time for a container to complete a cycle (move, wait, energy, wait, return) is equal to 90 minutes and a standard container holds 84 parts. An inefficiency factor of .10 is currently being used
Housekeeping
Maintaining a workplace that is clean and free of unnecessary materials.
What are 5 important S
Sort
Straighten
Sweep
Standardize
Self – Discipline
Autonomation and Jidoka
Capacity Planning
Capacity is the upper limit or ceiling on the load that an operating unit can handle.
Capacity also includes Equipment Space Employee skills
The basic questions in capacity handling are: What kind of capacity is needed? How much is needed When it is needed
Importance of Capacity Decisions
Impacts ability to meet future demandsAffects operating costsMajor determinant of initial costs Involves long-term commitmentAffects competitivenessAffects ease of managementGlobalization adds complexity Impacts long range planning
Capacity
Design capacitymaximum output rate or service capacity anoperation, process, or facility is designed for
Effective capacityDesign capacity minus allowances such aspersonal time, maintenance, and scrap
Actual outputrate of output actually achieved--cannotexceed effective capacity
Efficiency and Utilization
Determinants of Effective Capacity
FacilitiesProducts and Service FactorsProcess FactorsHuman FactorsPolicy FactorsOperational FactorsSupply Chain FactorsExternal Factors
Strategy Formulation
Capacity strategy for long-term demand Demand patterns Growth rate and variability Facilities Cost of building and operating Technological changes Rate and direction of technology changes Behavior of competitors Availability of capital and other inputs
Key Decisions of Capacity Planning
1. Amount of capacity needed Capacity cushion (100% - Utilization)
2. Timing of changes
3. Need to maintain balance
4. Extent of flexibility of facilities
Steps for Capacity Planning
1.Estimate future capacity requirements
2.Evaluate existing capacity
3. Identify alternatives
4. Conduct financial analysis
5.Assess key qualitative issues
6.Select one alternative
7. Implement alternative chosen
8.Monitor results
Forecasting Capacity Requirements
Long-term vs. short-term capacity needsLong-term relates to overall level of capacity such
as facility size, trends, and cyclesShort-term relates to variations from seasonal,
random, and irregular fluctuations in demand
Calculating ProcessingRequirements
If annual capacity is 2000 hours, then we need three machines to handle the required volume: 5,800 hours/2,000 hours = 2.90 machines
Planning Service Capacity
Need to be near customersCapacity and location are closely tied
Inability to store services Capacity must be matched with timing of demand
Degree of volatility of demandPeak demand periods
Developing Capacity Alternatives
1.Design flexibility into systems
2.Take stage of life cycle into account
3.Take a “big picture” approach to capacity
changes
4.Prepare to deal with capacity “chunks”
5.Attempt to smooth out capacity requirements
6.Identify the optimal operating level
Bottleneck Operation
Bottleneck Operation
Economies of Scale
Economies of scale•If the output rate is less than the optimal level, increasing output rate results in decreasing average unit costs
Diseconomies of scale• If the output rate is more than the optimal level, increasing the output rate results in increasing average unit costs
Optimal Rate of Output
Evaluating Alternatives
Cost-volume analysisBreak-even point
Financial analysisCash FlowPresent Value
Decision theory
Waiting-line analysis
Cost Volume analysis
TC = FC + VC
VC = Q *v (Variable cost p.u.)
TR = R*Q
P = TR – TC= R*Q – (FC + v *Q)
Re arranging terms, we have
P = Q (R – v) – FC
R-v = Difference between revenue per unit and the contribution Margin
Q = (P + FC) / (R-v), QBEP = FC / (R-v)
Assumptions of Cost Volume Analysis
1. One product is involved
2.Everything produced can be sold
3.Variable cost per unit is the same regardless of volume
4.Fixed costs do not change with volume
5.Revenue per unit constant with volume
6.Revenue per unit exceeds variable cost per unit
Financial Analysis
Cash Flow - the difference between cash received from sales and other sources, and cash outflow for labor, material, overhead, and taxes.
Present Value - the sum, in current value, of all future cash flows of an investment proposal.
Decision TheoryHelpful tool for financial comparison of alternatives under conditions of risk or uncertainty
Suited to capacity decisions
Waiting Line Analysis
Useful for designing or modifying service systems
Waiting-lines occur across a wide variety of service systems
Waiting-lines are caused by bottlenecks in the process
Helps managers plan capacity level that will be cost-effective by balancing the cost of having customers wait in line with the cost of additional capacity