Plant LayoutUnderstanding Through Case Studies

Presented by: Abhisek Khatua

What is Plant Layout ?

“Plant layout is a plan of an optimum arrangementof facilities including:

Personnel,

operating equipment,

storage space,

material handling equipment and

all other Supporting services along with thedesign of best structure to contain all thesefacilities”.

Physical Arrangements

Organisation Structure

Customers Quality

Types of Plant Layout

Plant Layout

Product

Combination

Fixed Position

Group-Technol

ogy

Process

Principles of Plant Layout

Integration

Minimum Distance

Cubic Space Utilisation

Flow

Maximum Flexibility

Safety, Security & Satisfaction

Minimum Material Handling

TACO’S NEW FACTORY LAYOUT REDUCES INVENTORIES AND THROUGHPUT TIMES

TACO a brief Introduction:

Circular Pumps manufacturer located in Cranston, Rhode Island.

Circulator pumps are used in forced hot water heating systems to move the water through the pipes.

Makes both residential and industrial circulator pumps

Old Factory Layout Impact:

Factory Layout Process Layout Lot of Travelling Time Long Waiting Period

Factory Floor Crammed with Inventory

Delivery Time In Weeks & months

For Improvement:

Analysis: On the basis of various products being produced

Process Layout

Product Layout

3 main Bays in Factory ==== >>> 3 Major Product Lines

Reduced Work-in-Progress

Inventories by more than 30%

Reduced Throughput Time by

more than 50%

Products manufactured within a

day or an hour

Increased Output by more than

50% without any additional

space

Currently has major market

share

@Source: Taco

Layout Considerations in Services

1. Cost per Square Foot for retail locations usually is very expensive (than Manufacturing Space Cost).

2. Service Retail Operations : Designed to maximise Sales per Square Foot.

3. Reduced the area devoted to Back Office (Ex. Restaurants – Reduced space for Kitchen).

4. Customer presence in the Transformation Process.

5. Use of Servicescape : The Ambient Conditions

The Spatial Layout and Functionality

The Signs, Symbols, and Artifacts

@Source: 4Mary Jo Bitner, “Servicescapes: The Impact of Physical Surroundings on Customers and Employees,” The Journal of Marketing, April 1992, pp. 57–71.

McDonald and The Strategic Impact of Layout

==============================Now major Layout Redesign==============================

Redesigning of 32,000 outlets in 118 countries.

Three Separate Dinning Areas:

(a) Linger Zone with comfortable Chairs and Wi-Fi connections

(b) Grab and Go Zone with tall counters

(c) Flexible Zone for Kids and Families

Facility Layout is Source of Competitive Advantage

@Source: Heizer/Render Principles of Operations Management, 7e

Indoor Seating (1950)

Drive-Through Window (1970)

Adding Playing Areas (1980)

Redesigning of Kitchens (1990)

Self-Service Kiosks

McDonald’s Assembly Line

Savings of $100,000,000

per year in food costs

@Source: Heizer/Render Principles of Operations Management, 7e

KFC and Process Layout

New Layout:

Raw Material

Cook AssembleFinished Goods

Deliver

Old Layout:

Customer Place Order

Raw Material

Cook WIP Assemble Deliver

Customer Place Order

Result of KFC’s New Layout

1. Reduces Bottlenecks

2. Reduced Material Handling Cost

3. Effective Space Utilisation

4. Ease of Supervision

5. Appropriate Communication

6. Increase Morale

The Secrets of Apple’s Retail Success : Retail Layout

1. Apple never sold their Products directly.

2. Selling Products with Retails like Sears, CompUSA (Huge Failures).

3. 1st Retail Store: In a Mall in Tyson Corner, Virginia. (19th May, 2001)

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"GOOD ARTISTS BORROW, GREAT ARTISTS STEAL"

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More than 1 Million Visitors. (in 481 stores, in 18 Countries)

$ 7000 Earning per square foot, in Fifth Avenue Store : $ 35000 Earnings per square foot.

Fastest Growing retailer to reach $ 1 Billion.

Trade Marked Retail Layout

Unspoken Apple Mantra “This Place is Special”

@Source: Steve M. Chazin, www.marketingapple.com

Apple’s Retail Layout

1. Minimalistic Layout (free of clutter, cables, and adverts),

2. Bright Lights, high ceilings, and white spaces,

@Source: Kristen Gramigna, retailcustomerexperience.com

Apple Store Receives for Distinctive Design

and Layout

Glass Fronted, Rectangular –patterned

Cantilevered Shelving

Rectangular Tables arranged in a line in the

middle of the store parallel to the walls

Multi-Tiered shelving along with rear walls

@Source: www.wired.com , Apple Store Trademark

Apple Retail Store Layout Design

Recent Trends in Layout

Benihana’s of Tokyo, a chain of Japanese steak

houses. The kitchen moved to the front of the

house Customers participate in the food

preparation process.

Office layout: Open Office System (80% Open

and 20% Private)-Spontaneous Communication.

Modern Warehouses: Automated Storage and

Retrieval ( occupies on 20% of Traditionally

designed Garage) Ex: Parking Garage in

Wolfsburg, Germany.

@Source: Heizer/Render Principles of Operations Management, 7e

Conclusion

Determines Log Run Efficiency.

Strategic Implications regarding Competitive Priorities (regarding capacity, process, flexibility, cost,

quality, customer, image.

Effective and Efficient Layout will meet Firm’s competitive requirements.

Thank You