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Facility Layout, Capacity
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Facility Layout
Minimize material-handling costs
Utilize space efficiently
Utilize laor efficiently
!liminate ottlenec"s
#acilitate communication andinteraction
$educe manufacturing cycle time $educe customer ser%ice time
!liminate &asted or redundantmo%ement
'ncrease capacity
#acilitate entry( e)it( and placementof material( products( and people
'ncorporate safety and securitymeasures
Promote product and ser%ice *uality
!ncourage proper maintenanceacti%ities
Pro%ide a %isual control of acti%ities
Pro%ide fle)iility to adapt tochanging conditions
Arrangement of areas within a facility to:
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!asic Layouts
Product layouts
arrange acti%ities in line according to se*uence ofoperations for a particular product or ser%ice
Process layoutsgroup similar acti%ities together according to process
or function they perform
#i)ed-position layouts
are used for pro+ects in &hich product cannot emo%ed
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Product Layout
,ource .dapt/ de ,te%enson 1( enedetti 31( 42006( p
208
rays 3ashier esserts ,alads
Main
3ourse egetale rin"s
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Manu#acturing Process Layout
L
L
L
L
L
L
L
L
L
LM
M
M
M
D
D
D
D
D
D
D
D
G
G
G
G
G
G
A A AReceiving and
Shipping Assembly
Painting Department
Lathe Department Milling Department Drilling Department
Grinding Department
P
P
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Process Layout in %er&ices
Women’slingerie
Women’sdresses
Women’ssportswear
Shoes
Cosmeticsand ewelry
!ntry anddisplay area
"o#sewares
Children’sdepartment
Men’sdepartment
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'mergency (oom Layout
S u r g e r y
R a d i o l o g y
E.R. beds Pharmacy Billing/exit
E.R.Triage
roomE.R. Admissions
Patient ! - erratic
pacema)er
Patient * -
+ro)en leg
Hallway
: 200; y Prentice
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Comparison o# Product and Process Layouts
Description
Type of process
Product
Demand Volume Equipment
Description
Type of process
Product
Demand Volume Equipment
Sequentialarrangement of
activities Continuous, massproduction, mainlyassembly
Standardized, made
to stock Stable High Special purpose
Process
Functionalgrouping of
activities Intermittent, jobshop, batchproduction, mainlyfabrication
Varied, made to
order Fluctuating Low General purpose
Product
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Comparison o# Product and Process Layouts
Workers Inventory
Storage space Material handling Aisles Scheduling Layout decision
Goal
Advantage
Workers
Inventory
Storage space
Material handling Aisles Scheduling
Layout decision
Goal
Advantage
Limited skills
Low in-process, highfinished goods
Small
Fixed path (conveyor) Narrow Part of balancing /Line
Line balancing
Equalize work at eachstation
Efficiency
Process
Varied skills
High in-process, lowfinished goods
Large
Variable path (forklift) Wide Dynamic / Orders
Machine location
Minimize materialhandling cost
Flexibility
Product
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Fied-Position Layouts
ypical of pro+ects
!*uipment( &or"ers( materials( other resources roughtto the site
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Cellular Layouts
'dentify families of parts &ith similar flo& paths
?roup machines into cells ased on part families
.rrange cells so material mo%ement is minimized
@ocate large shared machines at point of use
Manufacturing cell: « Layout in which machines arearranged in a cell that can process items that have similar
processing requirements ».
Operations Management, 3rd Canadian Edition, page 206
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Original Process Layout
CA $ Raw materials
Assembly
%
&
'
(
)
* +
,
-
%.
%%
%&
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(e&ised Cellular Layout
'
*
-
Assembly
%&
(
, %.
)
+
%%
%&
A $ C
Raw materials
Cell % Cell & Cell '
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/ey0/ey0
SS 1 Saw1 Saw
LL 1 Lathe1 Lathe
"M"M 1 "ori2ontal milling1 "ori2ontal milling
machinemachine
3M3M 1 3ertical milling machine1 3ertical milling machine
GG 1 Grinder 1 Grinder
Paths o4 threePaths o4 threewor5ers movingwor5ers movingwithin cellwithin cell
MaterialMaterial
movementmovement
6n6n 7#t7#t
Wor5er %Wor5er %
Wor5er &Wor5er &
Wor5er 'Wor5er '
Direction o4 part movement within cellDirection o4 part movement within cell
S
L
"M
3M
G
3M
L
8inalinspection
8inishedpart
A Manufacturing Cellwith Worker PathsSource: J.T. Black, “Cellular Manufacturing
Systems Reduce Setup Time, Make Small Lot
Production conomical.! Industrial
Engineering "#o$em%er &'()*.
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*d&antages and .isad&antages
o# Cellular Layouts
Advantages
$educed materialhandling and transittime
$educed setup time
$educed &or"-in-process in%entory
etter use of humanresources
!asier to control
!asier to automate
Disadvantages
!)panded training andscheduling of &or"ers
'ncreased capitalin%estment
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l o &
3 o l # m e
< ' ? <
< ' ? <
3 a r i e t y
l o &
Proect
MassRepetitive
9ob Shop
$atch
Contin#o#s
Product Process Layout
8i:ed Process Cell#lar Prod#ct
: 200A Michel 3loutier
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(etail Layouts - %ome (ules o# /um+
@ocate high-dra& items around the periphery of the store
Use prominent locations such as the first or last aisle forhigh-impulse and high margin items
$emo%e crosso%er aisles that allo& customers theopportunity to mo%e et&een aisles
istriute &hat are "no&n in the trade as Bpo&er itemsC4items that may dominate a shopping trip6 to oth sides of
an aisle( and disperse them to increase the %ie&ing ofother items
Use end aisle locations ecause they ha%e a %ery highe)posure rate
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%tore Layout - 1it .airy, !read, ig .ra1er
3tems in Corners
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(etail %tore %el# %pace Planogram
& 4t& 4t;;
)) 4acings4acings
3 7
P ! R >
3 7
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Managing
Capacity
Human Resources
#um%er + learning
Resources
Material and macinery
-uality and uantity
rocesses
he asic *uestions hat "ind of capacity is neededF
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.ctual Output=tili2ation esign 3apacity=!44iciency
.ctual Output
!ffecti%e 3apacity=
esign3apacity
!ffecti%e3apacity
.ctualOutput
>hree distinct meas#res0
>wo ratios #sed0
?ap G Planned and controlled4e) meals( set-ups6
?ap G Unplanned anduncontrolled4e) rea"s( stoc"-outs6
(elated Per#ormance Measures
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Measuring Capacity - 'amples
$#siness 6np#ts 7#tp#ts .utomoile industry Man-hours =umer of cars per &or"ing
Machine-hours shift
,teel Mill ,ize of o%ens onnes of steel per day
Oil refinery ,ize of the refinery arrels of fuel
Per day
#arming =umer of acresushels of grain per acre( peryear(
=umer of animals @itres of mil" per day
$estaurant =umer of tales =umer of meals ser%ed
,eating capacity Per day
heatre =umer of seats =umer of tic"ets sold
Per sho&
$etail sales ,*uare metres of floor space $e%enue generated
Per day
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.eterminants o# '##ecti&e Capacity
1 #acilities
21 Products or ser%ices 4product mi)6
H1 Processes 4learning cur%es6
;1
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7perations 0 $alanced Process7perations 0 $alanced Process Prolems are caused &hen there is a gap et&een the
capacity of machines or the comple)ity of tas"s1
. system is alanced &hen the output of each step supplies
the e)act %olume of input re*uired y the follo&ing step1Other&ise( there &ill appear a bottlenec51
he capacity of the ottlenec" determines the capacity of theentire system1
Mold
0 min1
3ut
0 min1
Paint
20 min1
.ssemle
5 min1
Where is the bottlenec5 in the 4ollowing e:ample?
HIhr AIhr AIhr HIhr
.eterminants o# '##ecti&e Capacity
. t i i C it ( i t
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Long
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.etermining Capacity (e4uirements 6en
When? 0>hree options
@ead strategy 3apacity israised efore it ecomesnecessary O%er-capacity
.%erage strategy 3apacityis added &hen re*uired1
@ag strategy 3apacity isadded after it has ecomenecessary1 Under-capacity
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Jou can increase the e)isting capacity y changing thethe &ay you manage your capacity1
Use o%ertime
Use more shifts or more personnel
'mpro%e the ottlenec"
,ucontract
.etermining Capacity (e4uirements o1
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.e&eloping Capacity *lternati&es
1 esign fle)iility into systems
21 ifferentiate et&een ne& and mature products orser%ices
H1 a"e a Big pictureC approach to capacity changes
;1 Prepare to deal &ith capacity Bchun"sC51 .ttempt to smooth out capacity re*uirements
A1 Use capacity cushion
71 'dentify the optimal operating le%el
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%ome strategies to manage te demand le&el
o# ser&ices
Price$educed price during the lo& demand periods to mo%e the
demand from the pea" periods1
$eser%ations I .ppointment ,ystems
.pplicale &hen the customer attaches a rather large importanceto the ser%ice and that the alternati%es are limited1
.llo&s to put the demand Kon standyK and to stailize it1
Offer to the customer a certain guarantee to recei%e the ser%ice atthe desired time1
he prolems of Bno sho&C customers are sometimes mitigatedy the o%eroo"ing1
aiting lines
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!rea) '&en *nalysis
( )
vr
FC Q
vQ FC r QC ! "
r Q!
vQ#C
#C FC C
$E" −
=
×+−×=−=
×=
×=
+=
profit
ee$en $olum %reak
outputof $olume
unit perre$enue
unit percost$aria%le
Re$enueTotal
Cost/aria%leTotal
Cost0i1edTotal
CostTotal
=
=
=
=
=
=
=
=
=
"
Q
Q
r
v
!
#C
FC
C
$E"
=oteUnit 3ost G 3 I LProfit margin G 4P I 36
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!rea) '&en Cart
$E" 2
$E" Q
#i)ed cost
ariale cost
otal cost line
otal re%enue line
Pro4itrea"e%en pointotal cost G otal re%enue
3ol#me #nitsperiodB
C o s t i n D o
l l a r s
Loss
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!rea)-'&en Pro+lem 1it %tep Fied Costs
#antity
8 C E 3 C
1 > C
8 C E 3 C
1 > C
8 C E 3
C 1
> C
Step 4i:ed costs and variable costs;
% machine
& machines
' machines
F
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One product is in%ol%ed
!%erything produced can e sold
ariale cost per unit is the same regardless of
%olume#i)ed costs do not change &ith %olume
$e%enue per unit constant &ith %olume
$e%enue per unit e)ceeds %ariale cost per unit
*ssumptions o# !rea) '&en *nalysis
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'ample
. manager &ants to add a ne& production line1 hefi)ed costs are A000 per month1 he cost of ra&material( laor( and energy to produce one unit areestimated at 21 he product sells for 7 per unit1
Luestions1 etermine the profit rea"-e%en point1
21 etermine the 4monthly6 profit 4or loss6 if you sell 000 unitsper month1
H1
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'ample
,olution
6rea"e%en P G 0 G r L - % L - #3
r L G % L #3
7(00 Iu L G 2(00 Iu L A 000
47(00Iu - 2(00 Iu6 L G A 000
L G A 000 I 47(00Iu - 2(00 Iu6 G 200 units
26#or 000 units( &e ha%e the follo&ing re%enu
$ G r L G 7(00 Iu 000 uG 7 000 and the follo&ing costs
3 G % L #3 G 2(00 Iu 000 u A 000 G 8 000
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'ample
,olution
H6#or a profit le%el of ; 000
$ - 3 G ; 000
$ G 3 ; 000 G 4% L 3#6 ; 000
G 42(00 Iu L A 000 6 ; 000 r L G 42(00 Iu L A 000 6 ; 000
7(00 Iu L G 2(00 Iu L 0 000
5(00 Iu L G 0 000
L G 2 000 units
Profit Margin G Profit I 3
G ; 000 I 42(00 2 000 A 0006 G ;0 N
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'ample
,olution
;6 #or 000 units( &e ha%e the follo&ing total cost
3 G 3 #3
G 2(00 Iu 000 u A 000 G 8 000
e ha%e a profit margin of 25NQ hence
Profit G 25N R 8 000 G 2 000
Profit G L R r S 3
2 000 G 000 R r - 8 000
r G 0 Iu
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