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Operations Management

Lesson 2Facility Management

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What you will learn in this unit: Facilities Management Location Decisions Layout Decisions Logistic Decisions Labour Decisions Technology Choice and Selection

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Facilities Management

Facilities management is the process of managing and improving capital investment of the organisation, these involves where to locate the operations, what are the layout to use, what logistic means that best for operations optimisation, who to engage to deliver the goods/services and what technologies to be utilised.

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FacilitiesManagemen

t

Location Layouts Logistic Labor Technology

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Location Decision

Location is the geographical positioning of an operation relative to the input resources, other operations or customers with which it interacts (Slack, 2001).

Importance of location•It have significant impact on cost •Impact on speed of service•Attracting labour•Availability of raw materials

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The location of operations

OperationSupply-side factors

Demand-side factors

Labour costs

Land costs

Energy costs

Transportation costs

Community factors

Labour skills

Suitability of site

Image

Convenience for customers

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Site Selection Factors

Historical – corporate towns Inherent Local Conditions Climate Culture Ethics Language

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Site Selection Factors

Staffing Labour Costs Social Laws Labour Competency Productivity Trade Unions Education Level Technological Sophistication Labour Mix

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Site Selection Factors

Infrastructure Family Services Communications Environmental Regulations Legal Framework Transportation Rental costs Living Costs Country Stability

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Site Selection Factors

Construction Land Cost Construction Labour Land Preparation Expansion Possibilities Zoning Regulations Environmental Regulations Materials Availability

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Site Selection Factors

Cash Flow Considerations Exchange Rates Repatriation of Funds Taxes Financial Aid

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Site Selection Factors

Proximity of Resources

Raw Materials Process & Utility Water Power Supply Suppliers & Subcontractors Convenience for Customers

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Layout Decision

Layout – deciding where to put all the facilities, machines, equipment & staff in an operation (Slack, 2001)

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Why is layout design important?

Require substantial investments of resources

Involve long term commitments – not easily changed

Impact on the cost & efficiency of short term operations

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The facilities layout decision procedure

Volume and variety

Process type

Basic layout type

Decision 1Decision 1

Decision 2Decision 2

Detailed designof layout

Decision 3Decision 3

Strategic performance

objectives

Project processJobbing processBatch processMass processContinuous process

Fixed position layoutProcess layoutCell layoutProduct layout

The physical position of all transforming resources

Flow of transformed resources

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Basic layout types

Basic layout types

Manufacturing process types

Serviceprocess types

Fixedposition layout

Project processes

Process layout

Cell layout

Product layout

Jobbing processes

Batch processes

Mass processes

Continuous processes

Professionalservices

Service shops

Mass services

Project processes

Volume Variety

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Fixed Position Layout Transformed resources remain stationary Transforming resources move as

necessary Effectiveness is governed by:- Scheduling of transforming resources Reliability of transforming resources • Eg’s – shipbuilding, construction projects,

some surgery, restaurant

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Process Layout Similar processes (or with similar needs) are

located together Utilisation of transforming resources is

improved Transformed resources move through the

operation according to their needs Different products different needs

different routes May be very complex Eg’s – supermarkets, some machine

manufacture

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Cell Layout Machines or services grouped into cells Cells determined by the process

requirements of the family of product/services they transform

Could be considered mini product layouts

Can simplify a functional/process layout Flexible Duplicates some resources

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Product Layout Locates the transforming resources

entirely for the convenience of the transformed resources

Transformed resources follow a specified route

Flow is clear, predictable, easy to control

Eg’s – car assembly, paper manufacture, self-service cafe

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Volume-variety characteristics

Fixedposition layout

Process layout

Cell layout

Product layout

Low VOLUME HighL

ow

VA

RIE

TY

Lo

w

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What makes a good layout Safety Length of flow Clarity of flow Staff comfort Management coordination Accessibility Space utilisation Long term flexibility

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Logistic Decisions

Logistic decision takes into consideration the flow of goods, information and financial resources therefore firms would have identify the necessary resources to support their operation.

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Public Logistics Internal or Channel (Outbound)

Logistics Information Logistics Supplier Logistics

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Labour Decisions

Labour decisions that focus on the human resources that help to ensure the operation process are optimise.

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Job analysis

The process of determining the requirements of the job

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Job Analysis The process of developing a detailed

description of the tasks and responsibilities involved in a job,

determining the relationship of a given job to other jobs, and

ascertaining the knowledge, skill and abilities necessary for an employee to perform the job successfully.

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Tangible outcomes of job analysis

Job description: A written description of a job, the types of duties

performed and the conditions under which these duties are performed

Person specification: Details the qualifications, experience and personal

qualities required of suitable job-holders

Job design:Concerns the satisfaction

of the job holder’sneeds

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Human engineering

Aims to identify and respond to worker needs in the performance of their jobs Adapts work environment and equipment to the person Can improve efficiency and create a more harmonious work environment

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Job design strategies

Job enlargement

Job rotation

Job enrichment

Self-managing work teams

Adjustments in work schedules

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Technology Decision

IT Technology Manufacturing technology Technology patents and

processes R&D technology Material technology