Operations Management Facility Planning

• Layout


  One of the key decisions that determines the long-run efficiency of operations
• Layout


  • Has strategic implications because it establishes an organization's competitive priorities in regard to capacity, processes, flexibility, and cost, as well as quality of work life, customer contact, and image
• Office Layout


  Grouping of workers, their equipment, and spaces to provide for comfort, safety, and movement of information
• Main distinction of office layouts

  The importance placed on the flow of information
• Balance three physical and social aspects of office layout

  • Proximity
  • Privacy
  • Permission
• Examples of trends on layout design

  • Deloitte & Touche's "hoteling programs" where consultants book offices for the day
  • Cisco Systems reducing square footage, reconfiguring space, creating movable, everything-on-wheels offices, and designing "get away from it all" innovation areas
• Retail layouts


  • Sales and profitability vary directly with customer exposure to products
• Five ideas for arrangement of stores


  • Locate the high-draw items around the periphery of the store
  • Use prominent locations for high-impulse and high-margin items
  • Distribute "power items" 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
  • Convey the mission of the store by carefully selecting the position of the lead-off department
• Servicescape


  The physical surroundings in which the service is delivered and how the surroundings have a humanistic effect on customers and employees
• Characteristics of good service layout

  • Ambient conditions
  • Spatial layout and functionality
  • Signs, symbols, and artifacts
• Management's task


  To maximize the utilization of the total "cube" of the warehouse
• Material handling costs


  All the costs related to the transaction, consisting of incoming transport, storage, and outgoing transport of the materials to be warehoused
• Important component of warehouse layout

  • The relationship between the receiving/unloading area and the shipping/loading area
• Cross-docking


  To avoid placing materials or supplies in storage by processing them as they are received, requiring tight scheduling and accurate inbound product identification
• Random stocking


  Locating stock wherever there is an open location, using automatic identification systems (AISs) like bar codes to allow accurate and rapid item identification
• Random stocking tasks

  • Maintaining a list of "open" locations
  • Maintaining accurate records of existing inventory and its locations
  • Sequencing items to minimize the travel time required to "pick" orders
  • Combining orders to reduce picking time
  • Assigning certain items or classes of items, such as high-usage items, to particular warehouse areas so that the total distance traveled within the warehouse is minimized
• Customizing


  A particularly useful way to generate competitive advantage in markets where products have multiple configurations, such as a warehouse being a place where computer components are put together, software loaded, and repairs made
• Facility design depends on

  type of supplies unloaded, what they are unloaded from, and where they are unloaded.
• The objective of warehouse layout

  find the optimum trade-off between handling cost and costs associated with warehouse space.
• Objective of Layout Design:

  •Higher utilization of space, equipment, and people

  •Improved flow of information, materials, and people

  •Improved employee morale and safer working conditions

  •Improved customer/client interaction

  •Flexibility
• The main objective of retail layout is

  to maximize profitability per square foot of floor space
• Fixed Position Layout


  The project remains in one place, and workers and equipment come to that one work area. Instead of materials, information or customers flowing through an operation, the recipient of the processing is stationary and the equipment, machinery, plant and people who do the processing move as necessary.
• Fixed Position Layoutfactors

  • There is limited space at virtually all sites
  • At different stages of a project, different materials are needed; therefore, different items become critical as the project develops
  • The volume of materials needed is dynamic. For example, the rate of use of steel panels for the hull of a ship changes as the project progresses
• Fixed Position Layoutexamples


  • Motorway construction
  • Open-heart surgery
  • High-class service restaurant
  • Shipbuilding
  • Mainframe computer maintenance
• Process Oriented Layout


  A product or small order is produced by moving it from one department to another in the sequence required for that product
• Process Oriented LayoutAdvantage

  • Flexibility in equipment and labor assignments
• Material Handling

  • The number of loads (or people) to be moved between two departments during some period of time
  • The distance-related costs of moving loads (or people) between departments
• Process Oriented LayoutSteps


  1. Construct a "from-to matrix"

  2. Determine the space requirement for each department

  3. Develop an initial schematic diagram

  4. Determine the cost of the current layout

  5. Improve the layout by trial and error to minimize cost by 10%

  6. Prepare a detailed plan
• Product-oriented layouts


  Organized around products or families of similar high-volume, low-variety products
• Assumptions for product oriented layout


  • Volume is adequate for high equipment utilization
  • Product demand is stable enough to justify high investment in specialized equipment
  • Product is standardized or approaching a phase of its life cycle that justifies investment in specialized equipment
  • Supplies of raw materials and components are adequate and of uniform quality (adequately standardized) to ensure that they will work with the specialized equipment
• Fabrication line


  Builds components, such as automobile tires or metal parts for a refrigerator, on a series of machines
• Assembly line


  Puts the fabricated parts together at a series of workstations
• Disadvantageof Process oriented Layout


  •Orders take more time to move through the system because of difficult scheduling, changing setups, and unique material handling.

  •General-purpose equipment requires high labor skills, and work-in-process inventories are higher because of imbalances in the production process.
• Cost is assumed to be a function of distance between departments. The objective can be expressed as follows:


  .

  
• Process Oriented Layout


  most efficient when making products with different requirements or when handling customers, patients, or clients with different needs.
• Process Oriented Layout


  the traditional way to support a product differentiation strategy.
• Proximity


  •Spaces should naturally bring people together.
• Privacy


  People must be able to control access to their conversations.
• Permission


  The culture should signal that nonwork interactions are encouraged.
• Trends on Layout Design

  1.Technology

  2.Creating dynamic needs for space and services