Manufacturing Processes

Facilty LayoutDr. Ron Tibben-LembkeLayout TypesProject or Fixed-position layoutProcess-oriented layoutProduct-oriented layout Office layoutWarehouse layoutRetail/service layout

2Project or Fixed-PositionDesign is for stationary project Workers & equipment come to siteComplicating factorsLimited space at siteChanging material needsExamplesShip buildingHighway construction3Process-Oriented LayoutDesign places departments with large flows of material or people togetherDept. areas have similar processese.g., All x-ray machines in same areaUsed with process-focused processesExamplesHospitalsMachine shops4Process-Oriented Layout

OfficeTool RoomDrill PressesTable Saws

1995 Corel Corp. 1995 Corel Corp.5Process Layout+ Allows specialization - focus on one skill+ Allows economies of scale - worker can watch several machines at once+ High level of product flexibility-- Encourages large lot sizes-- Difficult to incorporate into JIT-- Makes cross-training difficult6Process-Oriented Layout Steps Construct from-to-matrixDetermine space needs for each dept.Develop initial schematic diagramDetermine layout cost, Xij CijBy trial-and-error, improve initial layoutPrepare detailed plan Includes factors besides cost7Process-Oriented ExampleYou work in facilities engineering. You want to find the cost of this layout. The cost of moving 1 load between adjacent dept. is $1. The cost between nonadjacent dept. is $2.60 ft.40 ft.Dept. 1Dept. 2Dept. 3Dept. 4Dept. 5Dept. 6There are 6! or 720 possibilities! Clearly, we cant look at them all.8

From-to-Matrix5123456DepartmentDept.12346Number of Trips920100503050501020Schematic Diagram & CostDept.Dept.Cost13$20012$5016$4042$5043$4045$5025$1023$3036$100Total Cost$5701236451001020305010050501020Schematic Diagram & CostDept.Dept.Cost12$5013$10016$2042$5043$4045$5025$1023$6036$100Total Cost$48021364510011Product-Oriented LayoutFacility organized around productDesign minimizes line imbalanceDelay between work stationsTypes: Fabrication line; assembly lineExamplesAuto assembly lineBreweryPaper manufacturing.12Cellular Layout (Work Cells)Special case of process-oriented layoutConsists of different machines brought together to make a productMay be temporary or permanentExample: Assembly line set up to produce 3000 identical parts in a job shop13Work Cell Floor Plan

OfficeTool RoomWork CellSawsDrills14Work Cell AdvantagesReduces:InventoryFloor spaceDirect labor costsIncreases:Equipment utilizationEmployee participationQuality15Work Cell Layout+ Facilitates cross-training+ Can easily adjust production volumes+ Easy to incorporate into JIT-- Requires higher volumes to justify-- May require more capital for equipment16Office Layout Example17Relationship Chart123Ordinary closeness: President (1) & costing (2)Absolutely necessary: President (1) & secretary (4) 4I = Important; U = Unimportant1 PresidentO2 CostingUAA3 EngineeringIO4 Presidents Secretary18Relationship ChartAOEOUUUUUUIOIIIOUUUUUUUOUUIIUUEUIUEUUAUAIIUUEU342187659101234567891019

Warehouse LayoutDesign balances space (cube) utilization & handling costSimilar to process layoutItems moved between dock & various storage areasOptimum layout depends onVariety of items storedNo. items picked

1995 Corel Corp.23Warehouse FlowReceivingShipping

24Warehouse LayoutTry to organize storage in such a way that order pickerscan move through the product in a logical and timely manner.25

Warehouse LayoutFastest near the frontFastest within easy reachBulk storage vs. Single item pickingSerpentine vs. oval picking orderRestocking: frequency, safety stock28Cross-DockingTransferring goods from incoming trucks at receiving docks to outgoing trucks at shipping docksAvoids placing goods into storage

In-comingOutgoing 1984-1994 T/Maker Co. 1995 Corel Corp.

29Retail/Service LayoutDesign maximizes product exposure to customers, profitability per square footDecision variablesStore flow patternAllocation of (shelf) space to products TypesGrid designFree-flow design

Video30

Grid DesignOfficeCartsCheck-outGrocery StoreMeatBreadMilk31

Free-Flow DesignFeatureDisplay TableTrans.CounterApparel Store32

Retail Store Flow GuidelinesPrisoner aisles make you enter store in a particular route, and pass by certain displaysOften contain less profitable (for the store) brandsDecompression Zone people walk past first rows of items before settling into shopping mode.37Retail Store Flow GuidelinesBakery, coffee shop, restaurant spread aromas by entrance to stimulate taste budsSiren song of the Starbucks (Safeway)Food samplers throughout store do same

38Retail Store Flow GuidelinesFrequently purchased items at far sides of stores so you have to go through entire store (produce or meat).Profitable sections like produce placed where you keep running into themMilkMeatProduce

39Retail Store Flow GuidelinesMajor items in middle of aisles so you have to walk down into middle of aisle (Cereal, peanut butter)Power items on both sides of aisle so you have to look at both sidesCerealPeanutButter

40Retail Store Flow GuidelinesQuality of produce section important in customer decisions about which stores to visit, so produce is often prominently displayed upon entrancePeople like to see what theyre looking for, not read signsCerealPeanutButterproduce41Retail Flow GuidelinesEnd caps for high-visibility sale itemsLarge quantities of inventory serve as psychic stockIf there is a lot of it, it must be on saleStimulates sales

1995 Corel Corp.42Retail Flow GuidelinesEliminate cross-over aisles: less wasted floor space, you have to look at more items,the more time you spend in the store, the more you will buy.43

Shelf Space PlanogramComputerized tool for shelf-space managementGenerated from stores scanner data on salesOften supplied by manufacturerExample: P&G

2 ft.5 facings

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VO-544Shelf PlacementCompanies prefer to be at eye-level or at child-reaching levelClose to leading brands or high-draw items: snack foods next to the peanut butter or across from the cereal:Lots of kids visit the areaSlotting FeesManufacturer pays retailer to get a product into a store35,000 new grocery products per yearGrocery stores often stock 30,000 itemsImpossible to evaluate all new products to choose the best new onesSlotting fees guarantee grocer profits on a product, help balance risk of trying unknown product.Grocery is a narrow margin business, slotting fees can represent a significant revenue source.Slotting FeesSenate Small Business Committee held hearings on them in 2000.Industry refused to cooperate with GAO.Growers of produce (not just brand names) now getting involved and complaining.Small businesses claim they cant afford the big payments big companies can make.Advocates say small companies can put their money where their mouths are just like anyone elsePerimeterItemsPeople follow perimeter patternSale items on end everyone seesHalf of a stores profit comes from items on the perimeterBreakfast cereal brings in the most dollars per square footManufacturer incentives increase profitability of soft drinksAnchors at ends of a section: milk and butter at opposite ends of dairy case

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